MES Perspective: SaaS E-mail Isn't For Everyone


"There's been more change in the last year-and-a-half for e-mail than there has been in the last 19 years," Cain said Monday. "Most organizations over time will be moving away from local storage and e-mail."

Matt Cain At The Midsize Enterprise Summit

"What are the market dynamics that make in-the-cloud e-mail a viable option?" he asked.

For one, Cain said that there are more Software-as-a-Service e-mail vendors to choose from than ever before, including corporate giants such as Cisco Systems and Microsoft. And lately, even Google has gotten into the game, Cain said, although he added that the search engine giant only supports about a million paid corporate e-mail accounts.

"They have pretty good experience running large-scale e-mail services," Cain said. "The precedent is there. The question is, 'Can this model translate to the business world?' "

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Cain said that hosted e-mail services are becoming increasingly attractive to smaller organizations, which don't have the resources or IT staff to manage a complex e-mail infrastructure. "They just can't afford to have a Notes or Exchange or GroupWise specialist on staff," he said. "These guys are designing their e-mail systems to run so they don't have to touch these systems at all."

Cain also said that migrating to the cloud prevented what he termed the "tyranny of the upgrade," in which businesses are pressured to spend valuable time and resources revamping their entire e-mail infrastructure for an upgrade that will likely not result in significant added value for the company.

"With every new version of Notes and new version of Exchange, the vendors are excited. Customers are moaning and groaning, no one wants a new upgrade," Cain said, adding that with cloud-based services, "Those upgrades occur but you don't care so much because it's outside the organization."

Inevitably, price becomes an important factor as well, Cain said. For smaller organizations, SaaS e-mail greatly reduces the need for IT staff, provides an affordable and predictable monthly bill and reduces bandwidth, which can translate to big savings in energy costs. "It's low-cost power. Take the lowest-cost power in the country and you build your server data structure right next to that power plant."

But that cuts both ways. While smaller companies with limited or no IT staff might welcome a regularly scheduled bill for e-mail services, cloud-based services that charge on a per-user, per-month basis will offer negligible cost savings for larger customers. Meanwhile, cloud-based e-mail service providers often tag on hidden costs -- such as an additional 50 percent per user for e-mail access on mobile devices -- that often serve to further drive up costs for some larger end-user customers.

While the cloud-based model works for generic mailboxes or smaller businesses with limited e-mail requirements, the hosted model becomes more complicated for highly available e-mail systems -- when end users have to migrate all their contacts and complex calendar and archiving systems to the cloud.

The hosted model also becomes more complicated for highly regulated e-mail systems that serve larger customers that have to adhere to stringent regulatory compliance mandates, such as HIPAA and Sarbanes-Oxley. Often, regulatory compliance mandates either don't take cloud-based e-mail services into account or severely restrict outsourced data storage and communication.

"Where we start to breathe a little bit is when we talk about a generic environment," Cain said. "The more generic the infrastructure, the easier it is to go into the cloud."

However, while cloud e-mail services currently are more attractive to the smaller customers, Cain said that would likely change as companies such as Google and Microsoft continue to compete for the enterprise business with their hosted e-mail services.

"It's these small organizations that have moved to this hosted model," Cain said. "Over time, the economics are going to work for higher [employee] numbers."