Enova International, a Chicago payday lender that offers consumers installment loans, cash advances and lines of credit, decided in November 2011 to move all of its email and other daily workflow tools to "the cloud."
One driver for this change was that the company's Microsoft Exchange environment ran optimally only for Windows users; Enova has many Mac OSX users. Enova’s chief technology officer, Fred Lee, began to look for other options, and Google Apps seemed like a natural choice. "We wanted something that was operating-system agnostic, so Gmail made a lot of sense," he says. Lee was also intrigued by no longer handling any maintenance of the e-mail platform, including managing Blackberry integrations with Exchange. "That caused a lot of headaches," he recalls. Lee was also excited about the ability for employees to access documents and e-mail from any device, over an Internet connection.
At the same time, a policy that encouraged high-tech tools had made it tricky for technology staff to manage the diversity of operating systems, email clients, mobile devices and other workaday applications at the company. All the servers in Enova's development environment are Linux-based, for example.
To manage all that cheaply, "I needed something that wasn't going to be tied to the OS," says Lee. So Lee proposed Enova outsource its four in-house email servers. The pitch was good for the simple math behind the idea. "The rough cost estimate for us to maintain those four servers was $30,000 annually, plus two IT engineers," Lee says. "That's just to run it. We're also talking about doing backups regularly - about 30 terabytes of data that we had to back up every month, which took almost 24 hours to do. Then there's the administration -- provisioning users and doing complex routing configurations to different domains we use.
"Not to mention the licensing costs," he said. "So including people's time, that's probably somewhere around $200,000 to $250,000 a year."
In the bigger picture, payday lenders have been under tremendous pressure to cut costs. Stateside regulation aimed at curbing high interest rates attached to payday loans has sent many overseas to seek growth. Enova's corporate parent, the Fort Worth, Texas, pawn shop operator Cash America International, planned to spin off Enova in a $500 million initial public offering (which Cash America canceled in July citing "volatile markets").
Management gave the green light to outsource Enova's email to Google, via the search engine giant's Google Apps for Business. "Now we don't have any email servers, there's no complex routing configurations and backing up is not my problem," Lee said. "I just pay the Google Apps per-user licensing fee, which is about $50,000 annually for around 600 users."
"The cost of Google Apps is $50 per user per year," said Michael Cohn, co-founder and senior vice president of marketing at Cloud Sherpas, the company Enova hired at Google's suggestion to manage outsourcing to Google Apps for Business. "There were a couple of add-ons that Enova has purchased on top of that base license so [$50,000] is an all-in number. But if you compare that to the cost of supporting a legacy system, the cost difference is substantial."
About half of the staff remains on Outlook for email versus using Gmail in a browser. "But over time people have been switching to using Gmail because of features it provides," Lee says. "Early on it was about 60/40 in favor of Outlook."
Enova also adopted single sign-on authentication called SecureAuth, so users need only use one user ID and password to log into Enova's system. And email archiving and spam filtering comes from Google's Postini. Cloud Sherpas, of Atlanta, migrated years of legacy email, contacts and calendars from Enova's on-premise Microsoft Exchange system to Google's servers. "We leverage migration tools that come from Google, some from third parties and custom scripts in some cases," Cohn said. The consultant also helped Enova train employees on how to use applications like Gmail and Google Docs.
Microsoft offers its own "cloud" solution called Office 365 and has overhauled its Webmail offering. Analysts have generally lauded Microsoft for its deft workflow functionalities and touted Google for its quick search capabilities. So time may only tell regarding which vendor provides the easiest, most reliable and cost efficient hosting, regardless of applications used in the enterprise. Still, the primary financial benefit of outsourcing workaday tasks to any vendor is to trim back-office costs, including time spent managing applications. "That was the main driver from a CTO perspective," Lee said. So perhaps that's where decision-makers should focus their analyses. Lee makes it no secret that he's a Google fan. He's been a "power user" since Google launched Gmail back "when you had to get a beta invite to use it," he says. "It was better than Hotmail at not sending me spam." That echoes an oft-heard complaint of Microsoft's Hotmail service. But all Webmail is "spammy." And Office.com, aimed at changing such views, has been warmly received. The Web seems to be the new battleground for workflow dominance.
CASEFILE
FINANCIAL INSTITUTION: Enova
PROBLEM: How to cut costs in a tough market?
SOLUTION: Put email in the cloud.
