Microsoft unfazed by Google NZ Post win

Microsoft New Zealand has put a brave face on the revelation that the Postal Service Group (PSG) of NZ Post is moving to Google Apps, hoping to save NZ$2 million over three years.

They'll continue to use our technology on the desktop, as well as some servers

Microsoft NZ chief Kevin Ackhurst

As part of a three-year deal, PSG will replace a raft of Microsoft products with Google Apps, such as email, calendaring, collaboration, text and video instant messaging, as well as document creation.

Kevin Ackhurst, Microsoft New Zealand's managing director, said there was no competitive tender for the PSG deal. He'd like to see more detail on how the figures stack up, especially once training and migration costs have been factored in.

However, speaking to ZDNet.com.au today, Ackhurst did not dispute that PSG would save money under the deal and noted Microsoft probably couldn't have saved PSG NZ$2 million over three years. He believed PSG was an interesting case, as the division of NZ Post had financial issues due to its business changing and has to cut costs.

Ackhurst was keen to point out that the Google deal didn't mean Microsoft was out of PSG or other parts of NZ Post. "They'll continue to use our technology on the desktop, as well as some servers," Ackhurst said. He added NZ Post subsidiary Kiwibank wasn't affected by the deal and remained an important reference site for Microsoft.

An increase in mailbox size under the deal mystified Ackhurst, who said it was a "purely admin issue". According to Ackhurst, Exchange mailboxes were only limited by available disk space and could certainly provide capacity in the hundreds of gigabyte range.

Conceding that Google at present had an advantage over Microsoft, as the latter's cloud computing offerings were some 10 months away from being released, Ackhurst remains bullish that products like the web-based version of Office and hosted Exchange will be of higher quality and more reliable than those of the Mountain View competitor.

He also noted that Google didn't have any data centres in New Zealand or close by, whereas Microsoft serves the country from its Singapore facility. Ackhurst said Microsoft was continuously monitoring its services for issues such as availability and latency, but wouldn't be drawn on whether the company is considering locating datacentres closer to its New Zealand customers.

Integrator Fronde, a New Zealand Google partner, said 2100 PSG staff as well as a small number of NZ Post Group workers would use Google Apps under the deal. Postini, bought by Google two years ago, will provide spam filtering and email archiving for a decade.

A Fronde spokesperson claimed Google Apps made it easier for PSG staff to work more creatively, collaboratively and flexibly. He pointed to the mailbox increase from 50MB to 25GB as one advantage of Google Apps, saying the increased capacity freed employees from having to constantly manage email back ups.

Commenting on the PSG win, Google spokesperson Annie Baxter said that Gmail opened the door into enterprises for the search engine giant.

"Many companies start the conversation with us because of issues with mail," Baxter says. "Maybe they're having storage issues, maybe it's spam that's bothering them, maybe they're having trouble scaling their existing solution, or it's becoming prohibitively expensive as they grow."

Once Google has explained the benefits of Gmail to potential customers, the conversation invariably turns to the rest of the Google Apps suite, Baxter said.

The collaborative nature of products like Google Docs and Spreadsheets has many companies really excited, according to Baxter, as the whole way of working wasn't available to them before. Collaboration was a key feature that really appealed to NZ Post PSG, she claimed.

According to Baxter, data from Google Apps is stored in multiple, secure Google sites, sometimes across a number of countries. She said that Google has no plans for a datacentre in New Zealand.

Ackhurst also questioned the apparent uncertainty around privacy and legal issues for customer data being stored overseas for the deal, claiming Microsoft would've given a clear answer straight away.

Asked how storing data in different jurisdictions might affect NZ Post, Baxter said that just like any law-abiding company, Google complied with US laws and legal processes. She said that "we have a track record of advocating on behalf of user privacy in the face of law enforcement requests (including but not limited to US Dept of Justice subpoenas)". Google looked at each request to be sure it adhered to both the letter and the spirit of the law before complying, Baxter said.