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Measuring Economic Impact Of Using Cloud-Based Services: Google Apps
By Bill Ives
Expert Author
Article Date: 2011-04-19
This post picks up on the theme from yesterday's post. In May 2010, Google commissioned Forrester to examine the total economic impact and expected return on investment (ROI) enterprises may realize by switching from legacy email and productivity solutions to Google Apps. The report is now out. As most of you know, Google Apps is a cloud-based messaging and collaboration platform that includes mail, calendaring, IM, as well as Web-based collaborative documents, spreadsheets, presentations, and sites. I have used it on several projects and it seems to work fine as a free SaaS alternative. This is especially true for efforts where a commercial cloud-based collaboration tool is not available for whatever reason.
I was interested in the report, not just for what is might say about Google apps but for any light it could shed on switching to cloud-based collaboration, productivity, and messaging tools. Forrester conducted a combination of executive interviews and two surveys targeted at both IT and end user groups.
The results were impressive as ninety-three percent of respondents saw positive, tangible IT and user impacts that drove concrete ROI. They also found that users familiar with cloud-based personal email transitioned more smoothly to using Google Apps at work. The business user productivity gains were even greater than IT cost savings. The research suggested that end users were able to use Gmail more efficiently than their previous email solution and collaborate more effectively with Google Docs and Google Sites than with traditional office software.
I have used Gmail a bit and it seams straight forward but not necessarily easier than other email systems. I did not need any training but then that can be said for other systems the first time I used them. However, if you are talking about the use of documents in a collaborative way, then I can see that the use of Google Docs is easier than traditional office software.
They certainly found some impressive numbers in the ROI. The three-year results of switching to Google Apps from traditional infrastructure included a "risk-adjusted" ROI of 307% with a payback (break-even) within seven months. Looking more closely at the details within these results, the IT saving included reduced spend on licenses and infrastructure, as well as reduced IT administrator time spent on system maintenance, upkeep, patching, and upgrades. The totals were savings between 38% and 56%. These seem consistent with the claims for cloud-based saving.
The user benefits included productivity gains around email search, spam filtering, archiving, organization of email, as well as improved response time within the messaging environment. In the collaboration space improved efficiency in terms of sharing and editing documents across teams and within teams, the ability to incorporate feedback more quickly, more efficient face-to-face and virtual meetings, as well pushing more timely and relevant information to distributed teams. There was also improved efficiency in interacting with external partners and suppliers. However, remember the comparisons were with traditional enterprise apps, not against the other enterprise 2.0 offerings. Google provided the customers to interview but Forrester maintained editorial control over the report.
I think the findings are an endorsement of using cloud-based apps. Since the comparisons were not between various cloud-based app providers it is hard to say if they are specific to Google apps. However, they do look good.
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About the Author:
Dr. Bill Ives is an independent consultant and writer who has worked with Fortune 100 companies in business uses of emerging technologies for over 20 years. For several years he led the Knowledge Management Practice for a large consulting firm.. Now he primarily helps companies with their business blogs. He is also the VP of Social Media and blogger for TVissimo, a new TV schedule search engine. Prior to consulting, Dr. Ives was a Research Associate at Harvard University exploring the effects of media on cognition. He obtained his Ph. D. in Educational Psychology from the University of Toronto. Bill can be reached at his blog: Portals and KM. He also writes for the FastForward blog and the AppGap blog.
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