Clint Boulton here. Much ado about the cloud. Is this a big win for a Google or one little step on a long, winding road to catch Microsoft?

They were blowing almost $1000 a year PER EMPLOYEE on Exchange, and Exchange isn't even a very good product! This is really astounding. No wonder MSFT never innovates; there are plenty of companies drinking their Kool Aid and using their software in spite of much better, much cheaper alternatives. Kudos to Serena for switching!

I find it hard to believe that a company was spending $1000/yr on Exchange. The hardware for 800 users, with clustering and COOP (Exchange 2007 SCR), plenty of disks, etc. is $9000 * 2, at most! That's $18k.

The software is $400 for the Windows OS x2 and $3500 for the Exchange Server and $65 per user CAL for Exchange and Windows together. That's not per year, that's flat. Software Assurance saves about 30% over 3 years. Totalling the software that's $73,000 and would last 3-4 years (Exchange 2000, 2003, 2007). That's $91 per user. Divide that over 3 years (or 4 if they release Exchange 14 in 2011 instead of 10) and you have $30 on the software. Yes, there are periphery costs for the network equipment, desktops, etc required for this. ...but that would be needed for them to use their dev applications even if they use Linux or MAC on the desktop.

You might need a a part-time admin (between one and four can take care of desktops, servers, network switches, firewalls, security, etc). With one admin SOLELY dedicated (Exchange doesn't need it most of the time) at $90k and you are still at $163,000 for Exchange. That's $203/user with $12/user for years 2 and 3 and maybe 4.

...and, realistically, someone may wait 5 years to upgrade so that's $50.20/user over 5 years to run Exchange.

Let's compare apples to apples. Exchange hosting with companies like Mi8 is between $4 and $8 per year. That's $48 a year for hosted Exchange. Microsoft is also releasing a competitive product to Google's product and that will likely be priced similarly.

...and Microsoft's hosted products allow you to work offline when the cloud is down. When the cloud comes back up everything sends/recieves and the local documents can be uploaded.

Bob
VMS and Ultrix by Birth; Windows by the grace of God

Has anything vetted these numbers? We support both solutions for clients and I can't for the life of me find any scenario where 800 exchange accounts could possible cost $1,000+ per account per year. If Serena was actually paying this amount then the real criticism needs to be laid at their feet.

Michael:

That's Serena's story -- they are factoring CALs, SA, and other costs for Exchange.

How on earth are they calculating $1M for 800 Exchange users?

Clint: 800 CALs at retail pricing is $67 x 800 = $53,600. Exchange Enterprise Edition is $3,999. Let's assume they have two servers: $7,998. Let's also throw in the Software Assurance CAL of $35 x 800 = $28K. Two beefy servers at $10K each = $20K. Two full time Exchange administrators at $100K/year = $200K. Total = $309,598/year. And I'm factoring on the high side with the server cost and salaries. Perhaps I've missed something VERY big? There's more than $670,000 difference to cover.

Something just doesn't add up.

800 users x $50/user = $40,000. I don't see how Google costs 250K either.

Sounds like BS. Either someone left a zero off the cal count or this is a gimmick.

750 rounded up == 1MG

there's no question that they have their numbers wrong. The clue here in in the last sentence "It's become each of the users' preferences rather than anything we're dictating"

the scenario probably played out begining with a few power users fighting IT to have mailboxes larger than 1Gig - and then gave up becuase they either couldnt send or recieve important messages due to mailbox quota's.

They were forced to use a personal account (gmail) and you can complete the rest of the story from here...

Here is how we factored our costs, basic Exchange costs (CALs, SAs and the like) paired with Postini is around $500k. That's not our full costs though, we had to take into account all the extras that come with it.

We already incurred the $40k for Postini. However, where the costs really start adding up is in storage and disaster recovery (particularly when you consider we have DR plans for 18 countries). So when you take unified messaging, storage, DR and admin costs which come to $500k and add the original $500k we were looking at $1million USD per year as a total.

In this economy, or frankly any economy we simply can't justify this expense. We would rather spend our time and money on our core strength which is developing software for the application development community.

Kyle Arteaga
VP, Corporate Communications
Serena Software

Hello Kyle. We will provide 800 hosted exchange mailboxes with better than postini spam filtering *and* 500mb per user (40gb)for $115,200 per year complete. That is $10/month. This includes 7x24 support and the CAL cost for outlook.

Michael McGhee
Anexeon, Microsoft Gold Partner
michael@anexeon.com

you guys are assuming they only have one location (they have 29+ locations in 14 countries) and two servers, you don't take into account the size of their data, the real hardware they use is probably a lot more than 7k as someone suggested. They aren't running it all on basic disks. Add in a FC SAN, anti-virus, anti-spam, archiving, backup, retrieval technologies. oh, and bump up your salary estimates by 40% to account for benefits. don't forget to add 25% to all licensing costs per year for software assurance. how about the server room, rack, and cooling/electricity/facility costs? how about 24/7 4 hour warranty service for everything. Outlook isn't free either.

they will still expend significant labor on the admin, care and feeding of google apps even if all is done through a browser.

Sun Fire X4240 - $9,732.18:

2 Quad-Core AMD Opteron - Model 2347 HE, 1.9 GHz Processors
32 GB DDR2-667 Single-Rank Memory
16 x 146 GB 10000 rpm SAS Disks
SAS RAID PCIe HBA
1 DVD+/-RW Drive
4 x 10/100/1000 Ethernet Ports
5 USB 2.0 Ports
6 PCIe Slots
2 Power Supply Units
Sun Integrated Lights Out Manager (ILOM)
Java Enterprise System Software Preinstalled
Solaris 10 Operating System Preinstalled
3 Year Warranty – Next Business Day

A pair of these should easily be able to handle 800 users.

Here is how we factored our costs, basic Exchange costs (CALs, SAs and the like) paired with Postini is around $500k. That's not our full costs though, we had to take into account all the extras that come with it.

We already incurred the $40k for Postini. However, where the costs really start adding up is in storage and disaster recovery (particularly when you consider we have DR plans for 18 countries). So when you take unified messaging, storage, DR and admin costs which come to $500k and add the original $500k we were looking at $1million USD per year as a total.

In this economy, or frankly any economy we simply can't justify this expense. We would rather spend our time and money on our core strength which is developing software for the application development community.

Kyle Arteaga
VP, Corporate Communications
Serena Software

Congrats! You have just handed Google your valuable IP. They will search it, index it and bombard you with ads in your corporate email right rail (hopefully not).

GAPE doesn't run ads on the right rail - you only see that if you use the free version. That's what the $50 a year buys the customer.

Serena's stated costs for Exchange are completely ridiculous. I have a small IT consulting firm and amongst my other soup-to-nuts duties for my clients I personally support about 500 Exchange mailboxes on 25 servers in as many offices. Exchange related costs including installation, ongoing support, software licensing and hardware are maybe, just maybe $75 per employee per year. Probably less.

Did Serena even bother to consider hosted Exchange services such as the one offered by Intermedia? Including SharePoint you're looking at around $120/user/year with 4 gigs of storage per mailbox. That's ~$100K/yr and has all of the advantages of an outsourced solution such as multiple data centers, enterprise disaster recovery, etc. that GMail offers. Plus they could continue to use SharePoint and lower their internal costs by not having to support the infrastructure associated with it as well.

I can't see why you'd be spending $500K on Exchange for 800 users. About the only way I can think of is if you're deploying an Exchange server in each of the 18 countries. Which seems like excessive overkill (I worked at a company that had ~6,000 employees across the world and we hadn't deployed 18 Exchange servers). And if you've deployed this many servers you already have DR in place. So where is the additional $500K coming from? Is it possible you could give us more specifics?

the fact that the VP Communications (read "marketing" here) is commenting on this is all you need to know.

the figures are likely quoted at the extreme (ie: maximum) end of hardware/software/support costs to max it up and make it look negative towards the incumbant solution.

lets see the reference/case study come out of google in a few months and the ROI/TCO detail being highly favourable toward the google app approach.

this is just the standard approach to marketing products/services/solutions, MS have been doing it for years and now others are catching up to MS' "great" approach to marketing...

We have about 200 mailbox's at Rally Software and we have completed our conversion over to Google (Gape). It's not for the faint of heart but the productivity improvements and cost savings are dramatic.

We usually try to get press for things that help or are valuable to our customers. This is just a PR move. I bet they don't move all their users over.

Just to clarify - I am busy doing the migration from Exchange to GAPE for our company - and storage capacity it is 25GB PER MAILBOX. Think some of you misunderstood.