How to Use the Cloud to Cut Messaging Costs

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Given the huge amounts of time your customers' employees spend on e-mail, it's mission-critical to be sure any given messaging system is efficient and reliable. IT solution providers are increasingly recommending and implementing cloud-based solutions to help customers cut messaging costs. Here, the CEO of LiveOffice writes about how your customers can reap the benefits of moving messaging to the cloud. — Jennifer Bosavage, editor

Although the economy is slowly rebounding, many companies are still proceeding with caution and looking for cost savings wherever they can find them. The cloud has been an effective solution for many organizations, as it solves a number of problems in one fell swoop. It is also a great way to cut messaging costs.

An Osterman Research survey confirmed that e-mail is the single most used application for typical corporate users. The study found that typical users spend 134 minutes per day working in e-mail (28 percent of an eight-hour day). That's dramatically more time than is spent on the telephone, real-time communications tools or social media. Furthermore, typical users send a mean of 43 e-mails on a typical day and receive 123. Given this heavy reliance on e-mail, a reliable, cost-effective solution is imperative for most organizations, and running an on-premise system isn’t always the best way to cut costs.

Industry analysts agree that adoption of cloud-based e-mail is taking hold. According to Forrester, “Interest in cloud-based e-mail is rapidly rising. The promise of reducing operational costs and refocusing on their core competencies has many Forrester customers asking about the cloud.”

Longtime service providers are also onboard, expanding their offerings to include cloud-based services. Industry giants like Microsoft (BPOS and Office 365), Google (Google Apps) and Symantec (Enterprise have all introduced cloud offerings in the past two years as well as third-party providers like Intermedia (Hosted Exchange). Forrester adds perspective to the shift, noting, “Cloud-based services like those of Google and Microsoft are more than just an SMB solution – large organizations like GlaxoSmithKline are moving essential services to the cloud.” Even the federal government has embraced the cloud, with the GSA being the first to adopt cloud e-mail, which is expected to reduce costs by 50 percent during the next five years, and asking other agencies to follow suit.

Cloud-based e-mail saves organizations money in multiple ways. First, it turns a capital expense (for hardware and software) into a more balance sheet-friendly operating expense with a flat monthly rate (generally per mailbox). Next, it lets companies efficiently scale up or down by easily adding or removing users. Finally, it helps reduce organizations’ data center footprints.

Additionally, cloud-based e-mail offers intangible benefits. Companies can offload the management burden of messaging, allowing them to focus on strategic initiatives that drive their businesses forward, instead of the systems required to run them. That also saves them from having to add more resources, further affecting their bottom lines. Plus, many companies look to the cloud to take advantage of the latest technologies, which they may not be able to afford otherwise (e.g., Google Voice and Microsoft Lync Online). Cloud-based e-mail solutions also support improved collaboration for remote workers.

Forrester believes companies with fewer than 15,000 employees can almost always save money by moving all mailboxes to the cloud, and every firm can save as much as $63 per user, per year by moving occasional users. Cloud e-mail providers offer a per mailbox, per month pricing model, so ongoing costs are predictable, and solutions like the soon-to-be-released Microsoft Office 365 include more than just e-mail (Office Professional Plus, Exchange Online, SharePoint Online and Lync Online), offering even more value.

However, moving e-mail to the cloud is also complex. E-mail is the most critical application for companies, so the switch needs to be done flawlessly. It is also a potential new thing for end users, and as any IT professional knows, change isn’t always well received. In addition, cloud-e-mail platforms are still maturing.

Cloud-based archiving is a good way for organizations to save money on messaging today, while testing the cloud overall and taking a step toward cloud e-mail. First, they can stop allocating budgets for ever-growing storage in their messaging environments — many cloud archiving service providers offer unlimited storage. A cloud archive also helps companies address legal, compliance and retention needs without having to add and manage another expensive on-premise solution. Finally, archiving first reduces migration costs when organizations are ready to move their e-mail to the cloud. Finding and importing legacy data from various locations (e.g., backup tapes, PSTs, internal servers, etc.) into a new e-mail solution can be very arduous and expensive.

The per mailbox, per month pricing structure of cloud archiving solutions allows organizations to have a clear picture of their costs without fluctuation (other than adding and removing mailboxes). There are no upfront costs for hardware, software or licenses, and with a vendor managing and maintaining the system, companies don’t have to hire additional IT staff to run it.

Archiving in the cloud also has a positive impact on e-mail servers, since it allows organizations to run their messaging systems more efficiently. For example, we recommend that our clients with on-premise e-mail only keep six months of messages on their servers. This keeps the system running smoothly while everything else is safe and retrievable in the cloud archive. Ultimately, that saves time and resources, which leads to more tangible savings.

Cloud-based e-mail and related services are hot, and, according to ESG, cloud computing adoption is widespread: More than three-quarters (82 percent) of organizations have plans to leverage cloud-based services to some extent over the next five years. In addition, a Gartner forecast predicts that cloud computing services sales will surge to more than $148 billion by 2014.

No matter what reason companies have for moving some or all of their messaging to the cloud, or when they decide to do it, the savings are there for the taking.

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