My first reaction was "WTF". But really it does make a ton of sense. I'll bet this deal, more than any other, scares the crap out of Balmer. If Google can get big organizations living inside the browser they're going to win the whole game.

Who said anything about living in the browser? Google provides my email service too and I hardly ever use the web interface.

Presumably this is a gateway drug for Google Docs.

The professionally acceptable term is "candy"

They have a web interface?

I still can't believe I can't do substring searches in gmail. I have to remember if the word was plural or not, or misspelled?? I wonder if the city council realized this when they voted. Seems like a major productivity drag to me.

I can search to my heart's content because Google allows IMAP access. I only use the web interface when I'm on someone else's machine.

I know of a larger organization (60,000+ employees) that has dumped Exchange for gmail. You just aren't reading about it in the press.

I was on site at one of my clients, a top investment bank, and was surprised to see the guy I was visiting was using Google Apps for his work email. Turns out they were piloting it as a potential replacement for Lotus Notes (yikes). I don't think they actually decided to go with it, but the fact that a big firm would even consider a hosted solution for something like email -- especially in the financial sector, where there's constant obsession over security and regulatory compliance -- rocked my world a bit.

What is the current cost of LAs email system? How much is LA supposed to save by switching? How long are the terms of the deal?

Since the assumption is that MS costs more, I thought I'd dig up some links to prove/disprove that. I learned that MS actually provides hosted Exchange services, which is more of an apples-to-apples comparison with Gmail: http://www.microsoft.com/online/buy.mspx

From that link, there was a "Microsoft Online Services Cost Estimator" (http://www.microsoft.com/online/estimator/default.aspx). I input 30,000 users for Exchange and it estimated $228,000/month. If we assume that the $7.25 million was for 5 years, then Gmail for 30,000 users costs only $120,833/month, which is theoretically $1.3 million/year less than MS hosted Exchange.

For some context on how much of a big deal this is or isn't, according to the LA city budget (http://budget.lacity.org/), their total IT budget is about $100 million/year.

It's so nice to see someone with actual numbers. Keep it up!

And what happens if Google loses interest in this product?

<Edit> My first line comes across as snarky, and I apologize.

But it still concerns me about relying on on-line services when I have read so many articles about one company or another either losing information, selling the product to someone else who has a different agenda, or deciding to abandon a product (among other actions).

That's why you should only trust services that let you export your data.

Fortunately, both GMail and Google Docs can do so, as noted recently in another thread.

This is a good point. As much as I like google, I've been bitten by the "google discontinues service xyz" problem a couple times in the past.

Not services that you had a 5 year SLA agreement for.

I live in LA and this is the best use of tax money I've seen in a while =)

$241 per account, that's some expensive email.

Compared to what? Consider the alternative - the cost of buying, running, supporting, and maintaining Exchange servers.

The paid version of Google Apps costs $50/user/year, so for a multi-year contract, $241 isn't too bad. I'd be surprised if they could pay less than that with anyone else.

(That's all assuming that LA is getting Google Apps, and not just email.)

Not compared to the cost of exchange admins, project managers, licenses, production servers, QA servers, test servers, power, cooling, load balancers, web servers for OWA, etc.

spam filters....

So gmail will let the city of LA do litigation holds on e-mail, right?!??