Web & communication software

Microsoft's Exchange a Casualty of Bank's Cloud Move to Google Apps

Seeking to transform the way its staff communicates and collaborates worldwide, Banco Bilbao Vizcaya Argentaria (BBVA) will roll out Google Apps to its 110,000 employees, shedding along the way various legacy email systems, including Microsoft Exchange, a bank executive said in an interview.

When completed, the implementation will be the largest ever for Google Apps, and a vivid example of the challenge Microsoft faces in trying to hang on to customers as they move to cloud-based collaboration and communication suites.

BBVA decided that in order to increase operational efficiency and innovation, it needed to boost collaboration among its staff at its Spain home base and in more than 26 international territories in which it operates.

In seeking a software tool to support that goal, the bank concluded that it should implement a suite designed from the ground up for cloud-based collaboration. After evaluating several options, it settled on Google Apps, because it fulfilled the bank's collaboration requirements and seemed the most mature, secure and reliable.

As a consequence, the bank is discarding Exchange, which was the email system for the about 35,000 employees in BBVA's Spain offices, as well as various other email systems from other vendors used in BBVA offices around the world.

BBVA executive Carmen Lopez Herranz points out that the project that culminated with the adoption of Google Apps was never motivated by a desire or a need to specifically switch to a different email platform.

"What we wanted to do was to change the way we work. We never approached this as a project to change our email systems. That was a consequence of the solution that we decided to adopt," said Lopez Herranz, who is director of BBVA's global innovation.

Also interesting is that cutting costs wasn't one of the project's goals. When saving money is a requirement, Microsoft is often at a disadvantage against vendors like Google.

Microsoft also offers a cloud-based collaboration and communication suite, Office 365, that competes directly with Google Apps, and so do other vendors, including IBM Lotus. But, in the eyes of the BBVA decision makers, Google emerged as a solid cloud computing player and Apps as a stable, trustworthy suite.

"Google is a company whose business is based on providing cloud services," she said, referring to Google's consumer online applications, like its search engine. "And we view Google Apps as a mature, very complete suite that best meets our requirements."

Of course, just as there are companies like BBVA that choose Google Apps, there are others that will and do prefer Office 365. But the question is to what extent Microsoft will see its long-standing base of on-premise Exchange, SharePoint, Office and Outlook get eroded by customers who opt to jump to Google Apps when they decide to move to a cloud-based collaboration and communication suite.

At least publicly, Microsoft officials express little concern about the Google Apps threat, saying that they are extremely satisfied with sales both of Office 365 and of the on-premise versions of Exchange, SharePoint and Office.

Asked for comment about the BBVA deal specifically, Microsoft said in a statement; "After almost five years in the market, Google needs to build credibility with the enterprise audience and [the BBVA] announcement is an effort to do that. As Google's past history has shown, winning customers is one thing, keeping them is another. Productivity is our wheelhouse and our results show it."

Office 365 is on track to be one of the fastest growing products in Microsoft history, while the on-premise Office 2010 has become the fastest-selling consumer version of Office ever, according to Microsoft. More than 80 million people use Microsoft cloud productivity services, including Office 365, its predecessor BPOS, Office Web Apps and Live@edu, the company said in the statement.

Still, the BBVA deal isn't an ordinary one.

"The Google Apps/BBVA deal is significant for two reasons: one, it demonstrates that very large companies now feel comfortable going to Google for mission critical services such as email; and two, it shows Google is penetrating new industries such as banking, which, up until now, have been resistant to the appeal of Google," said Gartner analyst Matthew Cain via email. "I have to imagine there is no joy in Redmond today."

Unlike other Google Apps customers that adopt the suite mostly for Gmail, BBVA intends to also heavily use the other suite components, especially Docs for collaborative editing of documents, the Sites website builder, the Talk IM chat application and the Groups discussion forum service, on which BBVA is building an enterprise social network.

"An interesting challenge for an organization as big as ours is to bring employees closer together, so that they are a click away from each other, no matter where they are physically located," Lopez Herranz said.

By making the work environment a highly collaborative one, BBVA expects that its staff will be able to make better, faster decisions, be more innovative by working more in groups and less individually and be speedier when developing and marketing new products.

BBVA expects to complete the Google Apps rollout before the end of the year.

Juan Carlos Perez covers search, social media, online advertising, e-commerce, web application development, enterprise cloud collaboration suites and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.

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