What Is E-Mail Worth To Your Company? - InformationWeek

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9/11/2009
01:01 PM
Fredric Paul
Fredric Paul
Commentary
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What Is E-Mail Worth To Your Company?

These days, small businesses have a wide range of e-mail options, ranging from on-premise Microsoft Exchange servers to cloud-based Web mail -- and everything in between. And prices range as widely as the technology, from free on up.

These days, small businesses have a wide range of e-mail options, ranging from on-premise Microsoft Exchange servers to cloud-based Web mail -- and everything in between. And prices range as widely as the technology, from free on up.Earlier this summer, I had a chance to talk about e-mail with Jonathan McCormick, chief operating office for Intermedia, which claims to be the largest provider of hosted Exchange e-mail to small businesses.

Intermedia is a premium provider of hosted Exchange e-mail, offering features like a control panel, enterprise-class admin features, compliant arrchiving, company disclaimers automatically added to outgoing messages, and remote wipes of Blackberries -- as well as 24 x 7 support with average hold times of less than a minute and uptime measured by five 9s.

For that, though, Intermedia charges a bit more than other providers, $2-3 per user per month more. It may not sound like much, McCormick told me, but when you're talking about a $10/month base level, that's a 20% - 30% increase.

Some companies refuse to pay a premium, McCormmick says, choosing cheaper appraoaches, or just less-expensive hosted Exchange providers. But sometimes they change their minds after unhappy experiences, either with the hassles and expense of managing their own Exchange servers, or with the quality and service of cheaper technologies.

For small business, McCormick says, the buyer is the owner, and e-mail is increasingly their primary means of communication, now more so than the telephone. They have to balance the importance of that communication with the associated expenses.

Tech companies, for example, tend to appreciate what a pain it is running an Exchange server, McCormick said, and they know the value of the premium features. Choosing a hosted Exchange provider is not just about cost, McCormick said. It's also about data protection etc. If your hard drives fail, you could lose years of data. But their expectations are high.

In other cases, he explained, "We have to educate them on the value -- not just of us versus the competition -- but the value of a SaaS approach to e-mail."

There are currently some 200 million Exchange seats, but only a couple million of those are hosted Exchange servers. That may change as Microsoft rolls out its own hosted Exchange services (Microsoft Exchange Online), and preps Exchange 2010 for release next summer.

These developments are both a threat and an opporutnity for third-party Exchange hosts like Intermedia. McCormick called Microsoft a "frenemy," saying Redmond is "doing it to compete with Google, not us, and not for revenue... it's really too small to impact them." In addition, he pointed out that Microsoft won't support non-Microsoft products -- like the Blackberry, which opens opportunity for other providers. The biggest difference, though, is that "Microsoft wants to grow, and grow gigantically, so it needs a cookie-cutter approach" and will have to provide "a Google level of service."

Bottom line, there's going to continue to be a wide range of e-mail offerings at a wide range of prices. And SMBs will have to do their due diligence to find the right technology for them at the best possible price.

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