"It was eating us alive from storage costs and support costs," explained CIO Carol Dewitt in a phone interview.
But change is seldom easy. Implementing a new e-mail system was seen as a significant disruption to employees and to the company's business. "We kept postponing and procrastinating until we got to the point where we were having lots of issues with the system," said Dewitt.
Finally, something had to be done and the company decided to consider cloud-based options, including Google Apps.
There were concerns about security, at least initially. BI-LO has pharmacies, so it has to maintain HIPAA compliance. It's a tier one credit card merchant, so it has to maintain PCI compliance. And the company tries to maintain SOX compliance, even though it's a privately-held company.
"We went through rigorous testing and evaluation and we found out that Google was actually more secure than we were," said Dewitt. "We just thought we were secure."
Dewitt says there were also concerns that Google Apps might represent too much of a change. But the prospect of having access to applications like Docs and Sites proved enough to overcome those reservations. Gmail would save money for BI-LO, on the order of $200,000, and the company might be able to derive some benefit from other Google services.
Those benefits only became clear after BI-LO, with the assistance of Cloud Sherpas, a Google reseller, turned on Google Apps and migrated data for 1,500 corporate employees over the course of about three months. Now, says Dewitt, communication and collaboration have gotten much easier.
Dewitt says the company only trained a few power users but found usage soaring almost as soon as Google Apps became available.
"All of a sudden the adoption rate went crazy," she said. "I was just astounded at how quickly people stopped using desktop office productivity tools and started using Docs, just because it made their lives easier. They could share their information and track the changes. And it was that easy. No training. They just started using it."
Blame the consumerization of IT. BI-LOs users learned how to use Google Apps and similar Web applications in their personal lives. According to an internal company survey, 30% of employees already used Gmail at home and another 25% used a different Web-based e-mail service, like Windows Live Hotmail or Yahoo Mail. That familiarity translated into prior training -- training the company didn't have to pay for -- and pre-existing affinity for the cloud.
Google also made the transition easier by creating Docs in Office's image.
"It's so close to Microsoft, it was not that hard for them to do that transition," said Dewitt.
Microsoft may still dominate large enterprise accounts, but its popularity appears to be shakier among smaller organizations like BI-LO. Office 2003 is still being used at BI-LO but its future looks bleak. "I don't have any plans to upgrade [Office 2003], except for a small group of people," she said.
Thus does an observation made last year by Dave Girouard, president of Google's enterprise group, seem less like wishful prophecy and more like inevitable destiny: "I think all companies will have Office; they just won't have as much of it," he said. "Office will become something like Photoshop, something that a few users need. It's not really the right tool for most people."
Excel remains perhaps the greatest anchor for Microsoft. It's used widely and deeply and, for some, fanatically. But at BI-LO, Dewitt says that most people only use a fraction of Excel's capabilities. For most of her users, the spreadsheets in Docs are enough and bring the added benefit of mobility.
"You can work on projects from home," said Dewitt. "You're traveling and if you need to access something, you don't need to lug your laptop with you. We find that people are using other mobile devices. That's been our biggest excitement; it's given people the freedom to use other devices. iPads are prevalent here. We actually supply them to our executive committee."
In fact for Dewitt, the most significant problem with Google Apps is that it's too appealing.
"Our big issue is keeping people from using it too much," said Dewitt. "They like to create their own little sites. And then you find information that's pertinent or important to the company, you don't know where it is anymore because they weren't thinking in terms of the broader picture. So we've had educate people about what's appropriate and what's not. But the good thing with Google is they give you tools so you know who did what."