The City of Wyoming looked at Google Apps as an email solution about a year ago. We ran the trial version for a month. We actually decided to go with Microsoft Exchange Online--which offered better services, a familiar format (we were already using Outlook to filter email through), as well as a cloud-based platform. There is a substantial cost-savings for small communities to invest in the cloud-based platform, and Microsoft in particular offered a competitive price, especially since you could bundle your retention in the subscription pricing.

For us, the document sharing wasn't as important because our organization isn't at in a place where those services would be properly utilized. From what I could tell, Google Docs does offer document sharing capabilities, but there are limitations on format and integration with Microsoft Office--Microsoft SharePoint offers a much better product but there pricing is still pretty high. As far as security goes, if you are a government entity, the servers (for both Microsoft and Google products) are within the continental US and is honestly as secure, if not more secure than an on sight server. As far as world-wide access, government email is public record, so our policy is never to send any confidential data over email, unless is can be encrypted or a password protected. I will say that the cloud-based computer system has greatly increased our efficiency in communications, and we have little to no email problems. I would recommend Microsoft Exchange Online to any small community who is looking to reap the benefits of an on-site exchange server at an affordable and maintenance free cost.

My city government (under 30k residents) just completed a switch last month, from Groupwise to Google. I wasn't involved in the cost analysis for the decision so I can't answer that question but I can tell you this: space was very limited in individual email accounts with Groupwise and now everyone has plenty of space. So far, I haven't heard about security issues (Google is obviously much more convenient to access remotely) and my understanding is that was addressed well ahead of time.
I think the biggest challenge has been change management. Some people simply do not handle change well and Gmail's interface is much different than the previous email provider. Our IT department did a good job of phasing the transition, including a lot of training, and assigning one person per department to become a Google expert. But even with the best education and outreach, there will be people resistant to change.
Google has so many great options -- Drive (yes, limited formatting options but super convenient to kick around a document quickly in real time), numerous apps, and integrated tools. Personally, I think it's great. (Note: I've used quite a few email systems over the years, both professionally and personally.)

Hi Roger,

I implemented this solution for Mission, KS about 2 years ago. For the most part it's worked very well at streamlining certain inter-office communications. We still have a few outstanding issues but personally, I think it's been an excellent for us. Security is fairly straightforward; treat it like a VPN connection and enforce complex passwords. The biggest hurdle for us was (and is) organizational culture. Feel free to contact me anytime if you'd like to talk about our implementation - 913-676-8368 or jrauch@missionks.org.