The move is one of the strongest endorsements of cloud computing seen so far in New Zealand outside of the education sector where some universities have also adopted Google Apps.
However, most of the cost savings aren't from the cost of software licences, says the Postal Services Group's (PSG) general manager of business capability, Tracy Voice. Infrastructure savings are the major factor.
PSG has signed a three-year agreement with Google partner Fronde which will see Google Apps rolled out to 2100 staff, the entire workforce including management.
Voice says issues such as security and corporate governance have been addressed as part of a proof-of-concept project that has been going on for up to 10 weeks. Applications to be used include Gmail, instant messaging, video chat, Google Docs and ISite, Google's intranet-like service.
These will replace Microsoft's Outlook, Exchange and probably SharePoint, Voice says.
"We've done quite a bit of due diligence on security," she says.
Voice says NZ Post's legal people were involved and she is satisfied Google will provide a "robust, secure environment".
She says using Google will boost mail box capacity from 50MB to 25GB and this, combined with Google's search technology, will ease document archiving and retrieval headaches.
Voice says Microsoft also pitched for the deal with its cloud-based Exchange/Outlook combination.
Postal Services Group CEO Peter Fenton says the organisation wanted to give its people productivity tools that supported a high performance business culture and made it easier for people to work collaboratively and flexibly.
He says the increased mailbox capacity will free employees from having to constantly manage email back-ups.
"Google Apps simplifies document sharing within a secure environment, either internally or to people working remotely. This will increase our ability to work collaboratively," Fenton says.
The agreement means Postal Services Group moves to a variable cost model so that IT costs can be more closely linked to business activity. Moving to web-based tools also means people can work securely from anywhere at anytime, Fenton says.
Microsoft New Zealand managing director Kevin Ackhurst says, while he acknowledges NZ Post operates in a challenging sector and continues to seek ways to effectively manage its costs and profitability, "we do not comment on what the organisation may or may not be doing with other vendors".
"Cloud computing is becoming increasingly prevalent among business in New Zealand and Microsoft delivers technologies that offer greater choice and flexibility, for IT and end-users," he says.
"The recent introduction of Microsoft Online Services makes a range of leading Microsoft technologies available in the cloud including Microsoft Exchange and Microsoft SharePoint."
Voice says the biggest challenge of the project, which will cost $1 million in fees over three years, was bandwidth. However, this turned out to be caused by badly configured, locked down browsers.
"Today's announcement is further proof of the cloud computing revolution -- mature technology delivered the right way by a fast moving and important local channel partner," Google's head of enterprise for Southeast Asia, Richard Suhr, says in a statement.
Fronde CEO Ian Clarke says the deal is important for Fronde and Google, and an endorsement of their belief that cloud computing will drive the next major change in IT.