The company will credit some customers for 15 days of service, which would amount to almost 4% of the $50 per user per year Google charges.
Google's recent Gmail outage was certainly an inconvenience to customers, but the bigger blow was dealt to the Internet company's credibility as a hosted e-mail provider.
Google touts its Web mail as a better alternative to Microsoft's Exchange server and other on-premises e-mail systems. So a 2-1/2-hour outage like the one experienced by paying businesses, as well as consumers using the free service, on Tuesday are an embarrassment.
"It's damaging to their credibility, and it puts in a tough position those folks that made a strategic bet in moving off of Exchange," Sheri McLeish, analyst for Forrester Research, told InformationWeek on Wednesday.
The latest outage was the sixth for Gmail in the last eight months. But despite what appears to be a less-than-stellar performance, the service is no worse in terms of reliability than most other hosted services or Exchange software managed by internal IT staff, McLeish said.
What makes outages worse for Google is the amount of media attention the company receives, which results in a public relations nightmare. "They're going to have to work even harder" to reverse the damage, McLeish said.
A Google spokesman acknowledged that the attention deals Google a black eye. "These are events that give some people pause," he told InformationWeek
Nevertheless, Gmail is more reliable than Exchange and other on-premises software, he claimed, pointing out that four of the last six outages affected very few users.
On average, all the downtime over the last 12 months amounts to about 10 to 15 minutes a month, the spokesman said. "We think at the end of the day, if you actually look at the reliability of cloud computing and stack it up against on-premises software or doing it yourself, you'd find that cloud computing and Google in particular are actually more reliable."
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