January 13, 2005
The Whys And Hows Of E-Mail Outsourcing
It's not yet a landslide, but many companies are switching from in-house e-mail to outside services.
A recent study by Palo Alto, California-based Radicati group (see Radicati Sees Growth In Exchange 2003-Based Hosted E-Mail Market) identified a strong impact by the release of Exchange Server 2003 on email outsourcing. The infrastructure changes in Exchange Server 2003 make it a better platform for providers and offer easier connectivity for users.
But these aren't the only reasons why companies are junking their own servers in favor of an outsourced solution. The overriding factor seems to be, in a nutshell, IT manpower.
Simply setting up and managing daily operations for a mail server isn't overly taxing for most IT departments. But as the number of users grows, the time needed to handle mailbox management, message archiving, and other administrative tasks can begin to eat into a full-time IT position in a hurry. Add the need to maintain antivirus and antispam protection, and many IT managers simply run out of time to effectively manage the email system.
That's the situation Margaret Carson, IT Director for Poore Brothers, Inc., found herself in. "Our message system consumed one fulltime person, and with 250 users, it just wasn't feasible to continue," said Carson. To avoid the need to add staff to manage antivirus and antispam solutions, the company migrated from Exchange Server to , a hosted Exchange Server provider. Although outsourcing proved more expensive than hosting in-house, the advantage was clear. "It was simply better from an IT standpoint," said Carson, who explained that except for a few initial hiccups, the company's outsourcing experience has been a good and productive one.
Chris Adams, who wears Senior Accountant and IT Administrator hats for Monroe Litho, Inc., cites similar reasons for outsourcing. The commercial printing company, with a staff of about 80 and a traveling sales force, has the same message and collaboration needs as most mid-sized companies, but lacked the IT staff to provide for those needs. "We get by with what knowledge we have here and by outsourcing to various companies for very big projects," said Adams. "Due to the fact that we don't really have any considerable expertise in the IT field, we don't feel comfortable running our own email server."
Monroe recently moved away from a hosted Exchange Server provider to , which offers its own custom solution. BlueTie provides messaging, calendar sharing, tasks, and other collaboration features, including instant messaging. "It provides us with a professional and functional way to quickly communicate with each other within the company without using a commercial product such as AOL," said Adams.
Exchange Alternatives
Why the move by the company away from Exchange Server? The problem wasn't Exchange Server--it was the provider. Monroe struggled through several ownership changes at the provider and the ensuing chaos, finally throwing in the towel because of every company's nightmare: spam. "We experienced an astounding amount of SPAM at the time, and they couldn't offer any type of solution to help with this," said Adams.
The collaboration features provided by BlueTie have become an important factor for Monroe's users, but the management interface is at the top of Adams' list of favorite features. "With our previous email provider, it was such a hassle to do any enterprise management concerning our email, said Adams, "That meant for example that when we hired a new employee, I would usually have to leave a message with someone there, and wait days to receive an email communication as to when they were finally added. With BlueTie's enterprise management, anything I have to do is a snap. I can quickly and easily address any problems that one of our employees may be having, and adding a user is a quick and easy process."
Carrie Doty, the Practice Manager at CBH Consultants in Laguna Hills, CA, found BlueTie's collaboration features a plus as well, but cost was a major factor there. CBH Consultants maintains a business intelligence consulting practice, primarily using Cognos software, and employs 17 full-time consultants and 12 contractors. Doty estimates that the company's cost to run Exchange Server in-house would be five times greater than their cost for outsourcing to BlueTie when hardware, software, and IT staff time were factored into the equation.
The Exchange Solution
While many companies have turned to non-Exchange hosting services such as BlueTie, many others have outsourced to hosted Exchange Server providers like . The company's John Kula sees businesses making the transition for many of the same reasons. "Companies wish to get on the Exchange bandwagon and get Calendaring, Meeting Scheduling, Public Folders, Shared Contacts and Task Lists, and remote access," he said. "They have heard about increase productivity and communications and want to reap the benefits."
Kula sees the relatively low startup cost of outsourcing to be another major factor for most companies. Outsourcing avoids the cost of hardware, software, extensive deployment planning, and other costs associated with rolling out an in-house Exchange Server solution. "For companies without Exchange we typically see 400%-plus return on investment," said Kula. "Most companies fail to account for all the little things when they calculate ROIit's not only the hardware, software and productivity gains, but space, power, backups, etc. The trade off is that you do lose some control over your email."
"For companies that already have Exchange it's typically lower, though we have seen a lot of poorly architected systems out there. What typically happens is that a bad design evolves into a costly mess. I have seen companies running dozens of servers for less than a thousand users." Kula points out that in a properly designed system, one Exchange Server can easily handle two to four thousand users, with technologies to enable you to push capacity to as much as 10,000 users without adversely affecting the data stores.
With all of the interest on outsourcing, however, Kula frequently sees companies that want to move to an outsourced Exchange Server solution for the latest in messaging capabilities but which haven't made an infrastructure change in years. "Surprisingly, I get quite a few requests from companies that want to move to Exchange 2003 and Outlook 2003, but they are running mostly Windows 95 and Windows ME. There seems to be a lot of people that want to be on the bleeding edge of technology, but they have never bothered to upgrade their computers. Besides the huge security risk they have in their organization, I often have to turn away these companies because their experience will be far from enjoyable. Modern applications are very demanding on the computer and organizations can't expect productivity gains from a 266Mhz Pentium. Though explaining that is often difficult."
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