Google came out with an interesting proposition today for Microsoft Office users with enterprise agreements: Switch to Docs right now and Google will waive the Google Apps licensing fees until the contract with Microsoft runs out.
As an added bonus, Google will also cover some of the deployment costs and connect the company to a Google for Work partner. All told, it is an offer that could save the company some 70 percent, a statement that Google asterisked with the small-print disclaimer that this savings scenario involves a basic Microsoft Enterprise Agreement with no dependencies and that savings are not guaranteed.
A Lower Total Cost of Ownership
Google does make a convincing case with the savings math [PDF].
It sketches out a Total Cost of Ownership comparison between Google Apps for Work and Microsoft's productivity and collaboration tools. By its calculations, a positive cash flow from the investment – that is, the point at which the savings generated by implement Google At Work outweigh the investment — can be achieved in Year 1.
So that's the offer, made via a blog post published by Rich Rao, head of global sales at Google Apps for Work, although to be fair in his post he never cites Microsoft by name. And to be sure, there are enough Lotus notes users still in operation that the offer, with the competitor's name carefully omitted, could apply to them as well.
Rao quickly got to the hard sell in his post, zeroing in on Docs, calling it a "productivity powerhouse" with "unmatched collaboration tools" that includes "nifty new stuff" such as Voice Typing and Explore.
And indeed there is a lot to like about Docs, especially after the recent upgrades Rao referenced, plus other enhancements.
The Hold of an Enterprise Agreement
But what about the offer overall? Before we get too excited — free licensing fees! deployment costs are offset! — keep in mind this is only for companies with pre-existing enterprise agreements.
Think about it through that prism and you realize it Google's offer only makes sense in one very specific scenario, according to Rob Helm, managing vice president
of Directions on Microsoft.
That would be an organization that, despite the investment it has made with an enterprise agreement with Microsoft, has decided that Google For Work is what it really, really wants, he told CMSWire. "That company could get a less expensive migration as the result of this offer."
But how many companies fall in this category, Helm wondered? True, Google for Work is gaining traction and cloud productivity platforms in general are attracting a surprising array of traditionally-minded companies.
But an enterprise agreement with any software vendor is serious stuff, Helm said, and voiding it could have far-reaching ramifications.
Plus there is the commitment the company has likely made in training and establishing collaboration protocols and executive buy in. "No one abandons an enterprise agreement and all the accompany work that went into it for fun," Helm said.
If the company is replacing Microsoft with Google at Works it will have to redo training and these processes. It will also have to figure out its responsibilities under the software assurance rights that the enterprise agreement also offers but are now void, Helms said.
It is a lot of money and effort for a change of heart. "It is hard to imagine an example of what kind of company fits this model," Helm said.
Money on the Table
The short answer would be: one that does the math and realizes how much money is on the table. Perhaps it is not as much money as Google is claiming, but it could well be enough for a company to consider the offer, enterprise agreement or not. Emphasis on could. But first it has to start doing the calculations.
This is probably why Google takes such pains to highlight the TCO advantages it says that its platform delivers. It did it this morning and has promoted other studies as well, such as the one Forrester Research did at Google's behest earlier this summer.
The longer answer to Helm's question would be the mythical company Forrester created to illustrate the immense cost savings a migration could deliver. This company, a global B2B multinational services provider with 10,000 employees and $4 billion in annual revenue, would generate $17.1 million in risk-adjusted benefits using the Google Apps for Work suite on an enterprise level for three years. With total costs of $4.2 million, the company would have a risk-adjusted ROI of 304 percent.
Okay, so maybe the company doesn't meet all the qualifications to get a 301 percent ROI. I can think of plenty of fiscally-minded companies that would be happy with, say, 100 percent.
Right, so the link to Google's new offer you are about to start scanning for can be found here.