San Francisco is upgrading its e-mail system to a Microsoft cloud-based service to reduce IT costs and improve the city's response to disasters.

The switch to Microsoft Exchange Online will occur over 12 months within 60 departments--starting with smaller departments before rolling out to departments dealing with public safety and eventually reaching the city's 23,000 employees.

Jon Walton, chief information officer for the City and County of San Francisco, made the Microsoft contract announcement during a press conference today.

First, the city will upgrade its e-mail system from seven different systems, including Lotus Notes, into one cloud-based system. In the future, there are other Microsoft options Walton would like to explore such as SharePoint, videoconferencing, and instant messaging--features that are available through Microsoft's Business Productivity Online Services. However, the initial contract with Microsoft includes only cloud-based e-mail and archiving.

Recently, Microsoft's cloud-based customers suffered an e-mail outage. E-mail outages have happened before, but this time the outage affected the city for only four hours, Walton said. "The Microsoft outage showed us we made the right decision" in picking Microsoft after considering using competitors such as Google and Lotus Notes, Walton said.

Others, such as the U.S. Department of Agriculture, have made the move to Microsoft cloud services. In December, the USDA announced that its 120,000 employees will use Microsoft's Exchange Online to replace its 21 different e-mail and communication services. Similar services from rival Google meet the requirements of the Federal Information Security Management Act and include the use of segregated data centers.

As far as security, "we were impressed by [Microsoft's] security solutions," Walton said. "Microsoft has clients that require more security than the city does." The cloud-based initiative will cost the city $1.2 million per year.