Google Inc.'s Gmail service has stirred up interest in corporate email outsourcing. CIOs looking into Gmail will find that there are a variety of other email hosting services available, from those that function in the cloud to hybrid models that keep a company's email infrastructure on-premise but hand management and monitoring over to a vendor. And the price is right.
"It's taken off to where it's very cheap and effective to outsource email," said Ben Trowbridge, CEO at Dallas-based outsourcing advisory firm Alsbridge Inc. He also used to run an email outsourcing company.
Enterprise organizations have been somewhat slower than midmarket companies to adopt outsourced email due to the prevalence of legacy systems and concerns about handing over control of a mission-critical system like email.
But those views appear to be changing, as enterprises recognize that they can achieve some of the traditional benefits of outsourcing in a new sphere.
"You would characterize this in the past as more of an SMB kind of trend, but it's a very real trend for large organizations now," said Christopher Voce, an analyst at Cambridge, Mass.-based Forrester Research Inc.
Voce said a recent analysis of client inquiries from the past eight to 12 months pertaining to hosted email services indicated that 50% of clients wanted to know more about basic strategy, 41% sought advice on vendor evaluations, 35% asked about the costs of such models and 15% were specifically inquiring about Google's services.
While experts agree that it's important to thoroughly examine a provider's claims regarding uptime and delivery before handing over such an important business application, the email outsourcing approach works because specialty firms can oversee everyday monitoring and management of email systems at all hours, freeing up IT departments to focus their attentions elsewhere.
Hybrid services offer cloud alternative
That was certainly the consensus at Marine Resources Group (MRG), a Seattle-based holding company that oversees seven tug, barge and marine transportation companies and has a worldwide operation of more than 1,600 employees. Due to a series of mergers and acquisitions, MRG's companies were running three Microsoft Exchange Server 2003 systems, as well as four POP email programs.
"We have a very geographically dispersed workforce," said Craig Wheeler, director of system development and information services at MRG. "As part of our long-term strategy, we are rolling out new systems at the enterprise level that all of our operating companies will take advantage of."
In fall 2008, the company decided to collapse all of these legacy email systems into a Microsoft Exchange Server 2007 installation and was intrigued by Azaleos Corp.'s hybrid managed email outsourcing model.
"We wanted to retain control over the infrastructure, rather than be dependent on a data link to a third-party provider -- especially considering the integration of Exchange with other applications, like SAP," Wheeler said. "We still own the hardware and software and it runs on our premises, but they provide the 24/7 support and monitoring."
Scott Gode, vice president of product management and marketing at Seattle-based Azaleos, said there are many reasons customers prefer a hybrid model. In addition to uncertainty about completely offloading such a critical application into the cloud, there are regulatory requirements in certain industries requiring that certain information reside on-site.
"We're helping them roll out email into the cloud but not have to make it an all-or-nothing transition," Gode said.
Azaleos focuses on upper-midmarket to small-enterprise companies, and sees enterprise companies increasingly interested in email outsourcing, Gode said.
Other email outsourcing providers include USA.Net Inc., LiveOffice LLC and Apptix Inc., and telecoms like Verizon and AT&T and Oracle Corp. with its Beehive collaboration software, analysts say.
I would rather spend my scarce IT dollars on more strategic applications that can help us work with customers and give us a better presence in the market.
Craig Wheeler, director of system development and information services, Marine Resources Group
Azaleos offers its email hosting services on a monthly subscription model based on the number of users and how many services the company purchases. The standard package includes monitoring and managing Exchange, but clients can purchase additional services, such as antispam or antivirus protection, disaster recovery and business continuity archiving, filtering and more. Pricing starts at $10 per user per month and can drop even lower with volume discounting, Gode said.
MRG's Microsoft Exchange Server 2007 migration was completed this spring for its mainland companies; two of its companies in Hawaii will migrate shortly, Wheeler said.
The control his company maintains over its email operations -- while offloading the day-to-day oversight -- is comforting, he said.
"It's something I don't ever have to worry about -- I can go to sleep at night knowing that our email system is in good hands," he said. "There are so many things that can go wrong in an IT environment. Just knowing that email isn't going to be one of those things [provides] a certain comfort level that's nice to have."
Wheeler said he views email outsourcing less as a cost-cutting measure and more as a "cost-avoidance" approach. For about the cost of a full-time employee, he gets full-time coverage and predictable support.
"Email is critical, but very much a utility," he said. "I would rather spend my scarce IT dollars on more strategic applications that can help us work with customers and give us a better presence in the market."
Let us know what you think about the story; email Rachel Lebeaux, Associate Editor.