Microsoft Wins San Francisco Cloud Email DealMicrosoft Wins San Francisco Cloud Email Deal

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The city of San Francisco plans to consolidate seven separate email systems to Microsoft's hosted cloud-based email service over the next year.

The city is currently migrating 23,000 employees across 60 departments and agencies to Microsoft Exchange Online, SF CIO Jon Walton said in a news conference Wednesdy. Exchange Online is a cloud-based enterprise messaging platform that offers email, calendaring and collaboration features.

San Francisco will pay $1.2 million a year--or $6.50 per month, per user--for hosted email and archiving on the service, which will be hosted in Microsoft's data centers, Walton said. He said the cost savings of the deal is one of the ways the IT department is achieving a 20% cost reduction required by the city, which is experiencing budget cuts.

The various CIOs in city government considered several cloud-based email and collaboration services when they decided to make the move to the cloud, including ones from Google and IBM, Walton said. However, Microsoft's Hosted Exchange Online and its Business Productivity Online Suite--which offers cloud-based collaboration, worker productivity, and other solutions--fit more into the city's strategic long-term direction, he said.

"It was a unanimous [decision] of all of the CIOs in the city that this is the one we wanted to adopt," Walton said.

Currently, San Francisco has about 15,000 email inboxes leveraging Lotus Notes on two different systems, he said. The remainder of the 23,000 users in the migration are spread across five different on-premises Exchange systems.

While the initial contract is for Microsoft Exchange Online, Walton said the city is considering moving other on-premise applications to other aspects of BPOS in the future. Migration to the new cloud email system has already begun and will continue over the next year, he added, after which the city will consider its future cloud options.

State and local governments around the country are following the federal government's lead and leveraging the cloud for a variety of solutions to increase IT efficiencies and save money. Email seems to be the first application of choice for many government agencies to move to the cloud.

At the federal level, the General Services Administration and the Department of Agriculture are among agencies that have consolidated or are consolidating disparate email systems on a single one that is cloud-based, services U.S. CIO Vivek Kundra recently lauded as cost savings successes for the federal "cloud first" mandate. The initiative demands that federal agencies consider the cloud first when implementing new IT projects and also asked agencies to identify three existing systems they could move to the cloud.

The city of Los Angeles also has chosen to move its on-premise email to the cloud, choosing Microsoft rival Google for its migration.

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