Research: SaaS E-Mail
SaaS E-Mail: User Insight and Buyer’s Guide
PLUS: Head-to-Head Guide to SaaS E-Mail Providers AND 10 Full RFI Responses
By Michael Biddick and Andrew Conry-Murray
E-mail is hot again. Major vendors, from Microsoft and Google to IBM and Cisco, are vying to provide this venerable communications application. While Microsoft Exchange is the on-premises champ, e-mail delivered as an online service resets the competition, as customers large and small look to reduce costs and eliminate operational headaches.
The competition has just started. Of the roughly 996 million business mailboxes worldwide, IDC estimates, only 2%—20 million—were software as a service in 2009. But when it comes time for companies to upgrade their e-mail, they must consider SaaS options. Glaxo SmithKline, Coca-Cola Enterprises, Panasonic, and the city of Los Angeles are among the jumbo accounts—tens of thousands of employees—that have moved their e-mail to the cloud. Although Microsoft is the e-mail market share leader on-premises, it’s betting that most customers will move to the cloud. “We’ll look back in five years and say, ‘Why would anyone run their own e-mail?’” says Tony Scott, CIO of Microsoft, whose 90,000 inboxes run on the vendor’s own SaaS environment. Stephen Elop, president of the Microsoft Business Division, says half of the company’s Exchange, SharePoint, and Dynamics CRM revenue will come from service-based products within four years.
E-mail can be divided into three categories: premises, hosted, and SaaS. SaaS is built on a multitenant architecture and delivered over the Internet. With a hosted service, the e-mail servers might reside on a customer premises and be managed remotely or operated off the customer premises, but each customer gets dedicated servers and storage.
SaaS e-mail’s market share doubled since 2007, IDC estimates. Fourteen percent of companies that use outsourcing have SaaS e-mail, our InformationWeek Analytics survey of 530 business technologists finds. What’s the draw to SaaS? First, companies can get substantial cost savings, as SaaS’s multitenant architecture allows for economies of scale. Second, companies don’t have to sacrifice features or availability to get those savings. Third, IT departments can employ fewer people by handing over time-consuming and costly maintenance to a provider, and they can focus some of those people on more strategic tasks. Fourth, some companies find that SaaS e-mail makes it easier to give employees the mobile access they’re demanding, such as from home PCs.
In the first half of our report, written by Andrew Conry-Murray, we look at these issues and explore what value companies get from implementing SaaS e-mail. In the second part of the report, written by Michael Biddick, we offer a buyer’s guide comparing vendor offerings, and offering advice on what factors to consider when assessing SaaS e-mail systems and providers.