San Francisco migrates to hosted Exchange

Microsoft beat out Google and IBM for the contract

The city and county of San Francisco have started a transition to using Microsoft's hosted e-mail service, choosing the software giant's service over Google and Lotus Notes.

Over the next year San Francisco will transition 23,000 users to the system and has had 300 pilot employees using the hosted service for the past five months.

San Francisco will pay Microsoft US$1.2 million a year or $6.50 per month per user, said Jon Walton, CIO for the City and County of San Francisco. "It's a significant cost savings to the city and was one of the key ways the department of technology was able to achieve the 20 percent budget reduction for this year which was a directive from the mayor," he said.

The city is currently operating seven e-mail systems, including two different Lotus Notes systems and five Exchange on-premise products. Maintaining those various systems was costly, in terms of supporting the hardware and software as well as management costs, he said.

Supporting multiple e-mail systems is common for governments, said Shawn McCarthy, an analyst from IDC. Often each department has its own e-mail system, making upgrading the software and maintaining patches inefficient, he said. "Having a common system across all agencies lets IT managers in government focus on what's their core mission," he said.

Moving to the cloud will also help San Francisco more easily use the latest technologies and better handle disaster situations, Walton said. His group hasn't been as disaster-ready as he would like and moving to the cloud means that e-mail should remain functioning even if there's a disaster in San Francisco, he said.

Microsoft beat out the competitors because San Francisco saw potential to expand its use, he said. "We have a strategic vision for the city of where we want to be over the next five years and the Exchange solution fit very well in terms of where we're going," he said. For instance, the city currently uses Office and Sharepoint and could migrate that software to Microsoft's cloud services as well, he said.

San Francisco is also interested in other Microsoft offerings like video conferencing, he said. "This creates for us a foundation, a core of a system that we can expand in the future," he said.

Rather than being alarmed by the outages that hit the hosted Exchange offering last week, Walton said the incident made him pleased to have chosen Microsoft. "I see what happened last week as demonstrating why I think we made the right decision," he said.

Microsoft kept San Francisco updated on the problem and ultimately e-mail was affected for four hours with none lost, he said.

"Frankly, this isn't the first e-mail outage the city has experienced in the past," he said. During the problems, San Francisco had just one point -- Microsoft -- to contact to find information about the problem, he said. That's an improvement over the current system where San Francisco might have to try to fix seven different systems, he said.

In addition, because San Francisco has a service level agreement with Microsoft, it will get a credit for the outage, he said.

San Francisco seems to have had a better experience with the outage than others, some of whom complained online about struggling to reach Microsoft support for help.

Walton doesn't expect to let go any workers due to the move to the hosted e-mail service. Instead, workers that previously maintained the many systems will be freed up to deliver better service to technology users, he said.

Microsoft and Google have been locked in a heated battle for government business and both have won notable contracts. They recently engaged in a war of words over important certifications required to serve some government agencies.

Nancy Gohring covers mobile phones and cloud computing for The IDG News Service. Follow Nancy on Twitter at @idgnancy. Nancy's e-mail address is

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Nancy Gohring

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