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  • Features - Written by on Tuesday, February 9, 2010 9:19 - 14 Comments

    Cloud email’s Australian thunderstorm

    On 11 January this year, Macquarie University issued a statement that left Australia’s IT industry in no doubt as to how the institution felt about its ageing in-house email systems.

    “We were spending a significant amount of money each year maintaining our own inferior email infrastructure that, despite our best efforts, was falling further and further behind staff expectations,” said the university’s vice chancellor Steven Schwartz. “That’s money we would much prefer to spend on better teaching and research facilities for our staff and students, or on scholarships enabling students from disadvantaged backgrounds to access a university education.”

    The net result of that stark evaluation? Macquarie is currently in the process of dumping its in-house Novell GroupWise email infrastructure and moving 6,000 staff to Google’s Gmail platform; a move that comes after the university already shifted some 68,000 students into Google’s cloud.

    Some may find such a switch dramatic and risky. After all, many questions abound about security, privacy and the degree to which cloud computing/vendor-hosted email platforms offer a sophisticated enough platform to be compared with a traditional email solution.

    And yet, Macquarie’s tale is a story that is becoming increasingly common in Australian organisations as many re-evaluate just what they want from an email platform, what they truly need or would settle for, and often most importantly, what they’re prepared to pay.

    The switchers
    Google’s marketing spiel for its cloud computing platform exhorts organisations to dump their legacy infrastructure and “Go Google” with the search giant’s Apps suite — Gmail, calendaring, messaging, an office suite, and web site creation and hosting.

    And in Australia (and over the river at our Kiwi neighbour), many organisations have done just that.

    In the corporate sector, AAPT revealed in November last year that it had decided to use Google Apps for its 1,300 staff, with the telco’s chief operating officer David Yuile saying the choice was towards a fundamentally new way of working. Just one month earlier it was home loan company Mortgage Choice making the switch, moving 1,000 users onto Gmail.

    In July the Postal Service Group of NZ Post shifted 2100 users over. And even the Commonwealth Bank of Australia has examined Google’s offering — as early as February 2007 — but ultimately found the product wanting.

    “Absolutely, we’re seeing it every day,” says Google’s Asia-Pacific head of market development Deepak Ramanathan, when asked if Google has swapped out any instances of the dominant corporate email platform, Microsoft Exchange, in non-educational Australian institutions. “We see that the line between the person at work and person at home is disappearing, and we see people demand the same web applications they use in their personal life at work, so this change is happening fast.”

    But it’s in the education sector that Gmail has really found its home.

    The NSW Department of Education and Training has migrated 1.3 million students to Gmail, dumping one of the world’s largest implementations of Microsoft Exchange to do so. Monash University and Adelaide University are other examples of institutions that have also pulled big numbers for the search giant, with 58,000 and 16,000 students apiece being shifted across.

    “Interest in the cloud in general and in Gmail in particular is certainly high in Australia,” says Ramanathan. “At a recent forum we arranged for CIOs from some of Australia’s largest businesses, it was clear that talk has shifted to when and how to migrate to the cloud, given that the event was easily fully subscribed … we were turning people away.”

    The flipside for the the search giant, of course, is that so far Google has not yet — that anyone knows of — managed to convert staff accounts in the tens of thousands at any Australian organisation, despite its success in the education sector. And even in that education sector, despite Google’s stunning success, it has had its progress limited by that most unlikely of cloud adversaries — Microsoft.

    If you were to make a list of Australian educational institutions who have recently migrated their student base to a cloud email platform, Microsoft’s Live@EDU system would be just as prominent on that list as Gmail — and probably even more so.

    Over the past several years, Edith Cowan University, Flinders University, TAFE South Australia, Curtin University, WA Central TAFE, Sydney University and the Australian Catholic University have all migrated their student bodies onto Live@EDU. And many of those institutions have picked Microsoft in the last 12 months.

    There is some degree of history repeating itself to be found in the massive wave of Microsoft migrations to cloud email platforms in Australia’s education sector. If you ask corporate workers what they think of Microsoft Outlook, many will reply that they dislike the software, but find it essential for daily use. And, of course, Microsoft has achieved dominance in that field — a 2009 survey by Australian analyst firm Longhaus found 53 percent of organisations surveyed used Outlook/Exchange as their primary email platform.

    It’s a similar situation when it comes to the migration to cloud email platforms in Australia’s education sector. A recent protest held by students at Sydney University, for example, focused on the fact that they didn’t like Microsoft’s Live@EDU platform. And the encroachment of Microsoft software into the University of NSW’s traditionally Linux-dominated School of Computer Science and Engineering has been met with open hostility.

    But increasingly, Australia’s education sector appears to have taken a strong slant towards Microsoft’s Live@EDU platform over the past twelve months, eclipsing Gmail’s early successes. Of course, the company’s hosted Exchange solution — the corporate equivalent of Live@EDU and part of Microsoft’s Business Productivity Online Suite — does not appear to be gaining as much headway on office desktops. But Microsoft’s strength in cloud email in general is now undisputable.

    The rationale
    If you’re an IT manager outside the education sector, you might very well be asking yourself why the universities and education departments have moved their students so strongly onto cloud email platforms, when mainstream government departments and private enterprises (with a few exceptions) have so far preferred to maintain their in-house systems.

    According to Steve Hodgkinson, the director of analyst firm Ovum’s government practice, it’s all about need.

    Universities, he points out, currently are compelled to make a strategic decision on email as their “severely outdated” student email platforms reach end of life. In 2010, he says, any forced decision on email infrastructure would need to closely examine the cloud alternatives due to their advantages compared with the legacy style of in-house platforms.

    “To be frank,” he says, “if you were making a strategic decision to change your email platform [in 2010], serious questions would have to be asked if you opted for an in-house solution. There would have to be a strong security driver.”

    In contrast, Hodgkinson says, not many government agencies and private enterprises are in the position of being forced to change their email platform. Usually, changes in email platforms come across through mergers and acquisitions — for example, a company using Lotus Notes shifting away from it as it merges with another company using Microsoft Exchange.

    “There’s no real case for idly entertaining the case of maybe changing the email system,” Hodgkinson says. “Your back’s got to be against the wall in some way to make you do that.”

    There is one case where organisations have an in-house email system and have their back against the wall anyway, he says: If an organisation is using Novell GroupWise, which is speedily getting left behind in a very competitive market. Hence Macquarie’s speedy switch.

    Another reason why organisations switch to cloud email platforms, according to Hodgkinson, is where they have a serious lack of in-house skills. “Don’t use cloud computing for things in your organisation that are already working fine,” he says. “Cloud computing creates new options for bits and pieces that are broken. Some organisations do have broken email systems … they have reached a point where they need to focus their energies on applications that add business value.”

    One final motivation for switching is also clear. Education CIOs agree that the sorts of financial arrangements that Microsoft and Google have offered IT chiefs to bring their thousands of students across to cloud email platforms have been just too good to pass up.

    The next step
    If you accept Hodgkinson’s argument, it’s easy to foresee a future — at least in the medium term — where most large Australian organisations outside the education sector will remain reluctant to switch to a cloud email platform. There’s simply no immediate need, and without that need, as the analyst says, “it’s not something many CIOs would consider lightly”.

    However, some argue the decision to migrate to cloud email systems won’t come as a big bang process, but more like a creeping vine.

    Longhaus managing director Peter Carr is able to give a number of examples where cloud email platforms — particularly consumer-grade offerings such as Hotmail, Yahoo Mail or the freely available Gmail — are speedily making their way into semi-official use in Australian organisations.

    Just last week it was revealed that Qantas was planning to dump its Lotus Notes/Domino staff email system for Microsoft Exchange/Outlook.

    However Carr says the far more interesting internal email migration was the decision some time ago to stop providing Qantas flight attendants with an official company email account. Instead, he says, the flight attendants simply provide Qantas’ HR staff with their own personal email address — “Hotmail or Gmail or something like that”. They are then paid an annual fee for their professional use of personal technology.

    The reason this system works, according to Carr, is the low volume of official company email Qantas flight attendants need to deal with — just work schedules and so on. Most other official company communications can go through the unions. Effectively, Qantas has outsourced part of its corporate email platform to Hotmail.

    It’s a similar situation in emerging nations such as exist in the Pacific Islands.

    Carr says many Governments in the Pacific Islands never got around to implementing their own in-house email systems as most westernised countries did in the 1990′s. The reason? Poor infrastructure and a lack of skills meant it was usually easier for public servants to sign up for a free email account from Hotmail or similar, and use it for normal government work.

    “You’ll find email servers over there, but they’ve probably got a pot plant sitting on them or something like that,” says Carr. “They’re actually just skipping the middle bit, saying: ‘Screw it, we’ll just go straight to cloud’.”

    When you extrapolate this phenomenon into different Australian sectors, you can predict some drastic shifts in employee behaviour when it comes to use of IT systems. For example, Carr highlights the fact that many nurses — essentially low-level public servants — enter the hospital system through doing unpaid practical work during their degree.

    “They don’t get paid, so they don’t need a corporate email account,” he says. “They basically show up to their shift. These students will have their own cloud-based email accounts” — Hotmail, Gmail and the like.

    As those students transition into professional employment, Carr points out, they will often work casually at multiple hospitals and for nursing agencies. This means they won’t need permanent corporate email accounts and could potentially spend much of their career simply using their personal Hotmail option instead.

    “You could probably come up with a list of 5-6 things, which show that it makes no sense for hospitals to come up with collaborative platform and email servers for their support staff,” he says. “It’s a massive cost to take out of the health system.”

    Once the business case expands past Qantas to the healthcare sector, Carr can imagine it going elsewhere. “How could they not employ similar policies in counter workers in things like service centres and so on?” he asks. The analyst calls this type of staff “boundary workers”, because they work on the edges of the corporate technology footprint.

    Applying Carr’s analysis to Australia’s education sector, it’s possible that it was so easy for so many institutions to switch to cloud-based solutions like Gmail and Live@EDU because for universities, students are more or less on the boundaries of the their IT infrastructure. They’re not specialised, high-end users. They just get a bulk service that is battened down to cope with potential security breaches and demand.

    But this same analogy raises questions about the future of staff email at Australia’s largest organisations. After all, Macquarie University was one institution that proved what worked on the boundaries would work at the centre as well.

    Or, to put it in more colloquial terms — what’s good for the goose might also be good … for the gander. It will be interesting to see just how many Australian employees are living the cloud full-time, this time next year.

    Image credit: Mek Kormik, Google, Microsoft (respectively)

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    1. Posted 09/02/2010 at 8:26 pm | Permalink |

      Brief comment: I think it says a lot that the Aussie universities didn't, can't or won't, design their own cloud to migrate to. I think this will severely hinder NBN's practical usage if we're going to be all relying on pipes to overseas destinations to do day to day processes. Can't recall the exact specs, but I suspect 1m people using 100mbit fibre to the US won't fit down the existing, or even planned, tubes. Left this as a quick comment as I've not had my coffee this morning, but I do believe it's something to contemplate.

    2. Posted 09/02/2010 at 10:02 pm | Permalink |

      Yes, probably Like NBN, should've been a National Interest project 15+ years ago. Boat's well left the harbour. Though there's probably a great opportunity to do it based upon quantum computing and networking if it's started within the next year or two.

    3. Posted 09/02/2010 at 10:35 pm | Permalink |

      What happened to Google's "portable datacenter in a shipping container" product?


    4. Posted 09/02/2010 at 11:21 pm | Permalink |


      There has been speculation about Google and an Australian datacentre for this. But I'm not sure where it's at at the moment.

      • Posted 09/02/2010 at 11:35 pm | Permalink |

        @Renai, @SHG: The other thought regarding any major cloud datacentre is what it'd do for the censorship. When the pollies realise ISP level DNS filtering doesn't work, and Google have a DC here would they go after that? I'd say pretty gosh darned likely (they're stupid enough to support the ISP filter to start with…)

    5. Posted 12/02/2010 at 8:35 pm | Permalink |

      We're a small hosted business email provider servicing mainly <50 users at a time looking for cheap (<$5) 'Exchange' type hosting, that is Calendars, Contacts, push email on iPhone, Blackberry etc.

      For us local hosting just got too hard and expensive. We moved to virtualised (Xen) USA based hosting more than a year ago now.

      But I agree with Pete, Google are loading up the 'pipes' here in Au and it'll all come unstuck unless they engage the ISP's to ensure the capacity is there.

    6. [...] we wonder, would Brooks think of the news that Qantas flight attendants are encouraged to use their own personal email — Gmail or Hotmail — for work-related [...]

    7. Posted 11/03/2011 at 2:32 am | Permalink |

      Gmail outage: http://tech.fortune.cnn.com/2011/02/28/gmail-outage-passes-24-hours-for-some/ and http://news.cnet.com/8301-1023_3-20037019-93.html

      Blog by Marie Scott from University of Virginia about the outage (they were affected):

      And this is also interesting: The Google Factor

    8. Posted 09/02/2010 at 9:25 pm | Permalink |

      Interesting point Pete. I think personally to expect the universities to design their own cloud email solutions is a little tough, especially when there are such good solutions globally. However, I'm not sure of the extent to which either Google or Microsoft offer cloud email solutions hosted in Australian datacentres. That would certainly be preferable in terms of expense, speed and security, compared to hosting the same data offshore.

    9. Posted 09/02/2010 at 10:37 pm | Permalink |

      @SHG: Both they (and Sun) came to the conclusion that there wasn't much market for them. From memory Sun no longer offer it as a product but will build to requirement. No idea about Google's.

    10. Posted 11/03/2010 at 1:01 am | Permalink |

      David, Pete and Renai, this is why the channel is so important to the success of SME within the Cloud arena. Google have no datacentres in australia, you lose control of your data fairly quickly, and it exists in a server in another part of the world.

      There are companies that are both local and relatively cheap in the perspective of how they operate. One is only new, the other has been around for a little while.

      Network Presence is based in Sydney – they have virtual servers and hosting services, and are aimed as the catalyst between SME and their end users – they provide the hosting infrastructure so you don’t have to. The company is run by two locals, Richard Siggs ran a very successful ISP in Canberra called Spirit Networks, his partner, Andrew Mclennan runs an ISP on the south coast called SCoastNet. They both came from a company I worked at, many years ago, Richard sub-let premises within the company, which provided him with a couple of benefits, firstly, it was secure, and secondly, he had access to our client base, it was a very effective symbiotic relationship. Have a look at their site for more info, http://www.networkpresence.com.au

      The relative newcomer is Cloud Central, and there is enough hype in the media about them at the moment, I won’t re-hash that info.

      The other thing that we have seen emerge due to email and the cloud is scanning and filtering companies, one who is based offshore, the other has a datacentre based in Perth. Scanning and filtering will be the new point of failure, both these companies are global, but having the ability to deal with australian traffic locally speaks volumes to the end users who are cagey about off shore data repositories and scanning facilities.

      Renai, the channel is of benefit to you from a technology perspective. I urge you to engage with the reseller community to see exactly what is going on at the coal face.

    11. Posted 12/03/2010 at 12:06 am | Permalink |

      Interesting points. I do think the channel is interesting, but I don’t really have the background to interact with it too much. And I have a feeling the channel is more about business than it is about technology — so maybe a little tangential for me.

      I must say that I do feel that the channel is not best positioned to provide cloud services as well. I see true cloud computing services as being hosted by people like Amazon and Google, not locally hosted versions — I’m not sure that is really “cloud”.

      However, I will keep an eye on the companies you mention here! :)

    12. Posted 12/03/2010 at 11:12 am | Permalink |

      Cloud to me means a separation between service and physical infrastructure. As a client you don’t worry about capacity and scaling. The capability of doing that is now within a lot of peoples grasp. You don’t have to be with google to make something that scales.

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