What Microsoft’s Minnesota win means for cloud

Minnesota says using BPOS in the cloud improves security

Microsoft’s Business Productivity Online Suite (BPOS) offering had a relatively good week this week, getting a shout-out at the company’s annual employee meeting at Safeco Field in Seattle and scoring a customer win in St. Paul, Minn., where that state chose BPOS as its new online platform to deliver unified communication and collaboration services to state government in the cloud.

Interestingly, the Minnesota win can be significant for Microsoft in allaying the concerns of many enterprises about moving IT to the cloud. Enterprises, more so than small-to-medium businesses, are reluctant to move to the cloud because of concerns about control over security, compliance with regulations and commingling of their data with that of other cloud clients. Minnesota, which as a government entity has significant security and compliance issues, assessed the situation and decided to go cloud.

“The agreement keeps the service management of our critical communications tools in state hands but leaves the costly application management to Microsoft's experts,” stated Tarek Tomes, assistant commissioner for customer and service management in Minnesota’s Office of Enterprise Technology (OET), in a statement on the office’s Web site. "The conversion to a hosted service allows us to meet critical business needs related to capacity, modernization and agility in the most efficient and effective manner."

As for security, the OET says BPOS applications will be housed in a dedicated Microsoft environment and delivered online through a direct connection to Minnesota's secure network. That would be “an instant upgrade” from the security the state provided before, said the state’s CIO, Gopal Khanna.

And the OET is a fairly substantial IT department, with a staff of 300, a budget of $600 million and a customer base of 33,000. It’s services extend not just to state agencies, but also to county and local governments and educational institutions. So other enterprises similar in size should take note.

Minnesota doesn’t have the glitz and glamour of Hollywood as evidenced by Google’s win over Microsoft about a year ago when it snatched the cloud office applications business of the City of Los Angeles. Under the $7.25 million five-year contract, L.A. will use Google Apps and Gmail to deliver office computing functionality to a 30,000-seat IT network. This was a PR coup for Google with the added twist that $1.5 million of the contract would be paid by the city from the 2006 settlement of a lawsuit against ... Microsoft.

Still, other numbers still favor Microsoft. Gartner numbers show Google has less than a 1 percent share of the enterprise e-mail market. Gartner gets that number from identifying 1 million to 2 million users of Google Apps Premier Edition. While Google promotes big customer wins like Los Angeles and Motorola’s wireless division (20,000 seats), most Google enterprise customers have only about 50 seats, gartner notes.

Google, though, may be able to quibble with Gartner’s analysis as it only counts enterprises with 100 or more seats (but would anything smaller be an enterprise?). Nonetheless, Google has a lot more work to do to catch up to Microsoft. Not that it won’t continue trying.

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Copyright © 2010 IDG Communications, Inc.

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