SEATTLE-Microsoft has snared Coca-Cola Enterprises as a customer for its dedicated hosted services, which will be phased in over the next few years.
Coca-Cola Enterprises is the world’s largest marketer, distributor and producer of bottled and canned liquid nonalcoholic refreshments, with some $20 billion in annual revenue.
It that has 74,000 employees, some 30,000 of whom are knowledge workers with access to desktops and laptops, with 15,000 true mobile workers. The other 30,000 work in the company’s plants.
The company introduced a global transformational agenda for itself at the end of 2006, with communication a key component of that, Esat Sezer, CIO for Coca-Cola, told eWEEK here at the 2008 SharePoint conference.
“How we collaborate between different regions and the various business units is a very important part of the transformation,” Sezer said.
As such, the company created an executive communications council, which Sezer co-chairs, whose goal is to leverage different technologies and find a way to adopt those in a manner that enables better communication and collaboration.
To that end, Coca-Cola Enterprises introduced live video broadcasting and audio on demand though its portals, but then realized that its technology framework required a refresh, which meant taking a new direction.
“At that time we had a variety of disparate legacy and inherited technologies, and pulling all of these together would have been a challenge. We probably owned every technology introduced in the last decade, and that was hard-wired and patched together, which certainly did not give us the ability to scale up,” Sezer said.
Company officials decided to migrate from largely IBM-based technologies, including Crossroads, WebSphere and Stellant, to Microsoft to simplify all this while getting the capabilities that would allow it to quickly scale up on the communications front and do unique customization.
Then came Microsoft’s software-plus-services concept, and “we saw the commitment from Microsoft to work with us to pull all this together. So we made that call and will begin the first part of the migration of our communication and collaboration capabilities, including e-mail, calendaring and conferencing, to Microsoft Online Services in the second half of this year,” Sezer said.
Coca-Cola Enterprises’ intranet portal will also be totally renewed with SharePoint, and document management and learning capabilities will be added on top of that, given the importance of training its large mobile work force.
The company plans to roll out these online services to more than 10,000 staff members during 2008 and hopes to reach many more in 2009.
Coca-Cola Enterprises will use Microsoft’s dedicated hosting model, which is for companies with more than 5,000 employees and which has been running for the past four years. It is in the prototype stage, and the infrastructure part is almost done, Sezer said.
Asked if he is concerned about possible outages, disruptions and bandwidth issues with these online services, Sezer said he has received assurances from Microsoft in this regard, noting that this would be an that issue regardless of whether or not Microsoft was hosting it.
“The basic question for me is whether I can run this infrastructure better than Microsoft can. Am I going to be able to know their product better than them? I might, but I’m hoping that’s not the case,” he said. “Time will tell, but my core business is not running a data center, and letting someone else do this frees up resources that can be used elsewhere. Is there a risk? Yes.”
Keith McCall, chief technology officer of Azaleos and a former Microsoft executive, said there are risks, warning that hosting is a costly proposition for companies of all sizes, but especially for those with more than 200 employees.
“We estimate that a 1,000-employee company with moderate e-mail usage that hosts their e-mail may incur an additional $3,000 or more per month just for bandwidth charges for their users and which is not included in the pricing of Microsoft’s services,” McCall said.
Microsoft will need to learn Research in Motion’s recent lesson: A network service interruption can occur at any time, and trusting companies putting all of their eggs in the hosted services basket can run the risk of significant productivity losses when, not if, e-mail goes down, he said.
But for Sezer, letting Microsoft handle those services allows him to put those resources into developing new capabilities and differentiated solutions.
Asked if Microsoft has provided guarantees against e-mail loss and any legal and regulatory issues that could arise from that, Sezer said, “We had a substantial legal engagement with Microsoft upfront, which was an extensive, difficult undertaking.”
This issue was addressed in a recent research report about hosted e-mail by Gartner analyst Matthew Cain, who said the market for e-mail hosting services is poised for explosive growth in the next few years, with 20 percent of enterprise market e-mail seats delivered via software as a service and similar models by 2012.
But there are four areas of common misunderstanding in hosted e-mail relationships: legal, security and integration, contract startup and cessation, and operations, he said. Cain recommended that customers clarify the legal aspects before signing the contract, including how discovery and preservation requests will be processed.