Email in the SMB Segment

The Future of Email in the Small and Medium Business Segment

Introduction

Email was the original internet “killer application” and remains as one of the most important business applications in the modern office. The ubiquitous use of email has lead to the situation where email is considered both a commodity and a utility. In this role, email suffers from considerable cost pressure as a commodity and serves as a platform for many complex business functions, such as customer relationship management (CRM).

Two independent forces are forcing all businesses regardless of size to reconsider their current operational footprint for email. The first is compliance with Federal Rules of Civil Procedure (FRCP) or more commonly known as eDiscovery. These new rules contain specific requirements regarding document retention, including email messages, for use in the civil litigation. The second force is the industry-led consolidation of communication technologies whereby telephone, instant messaging, wireless phones and email are converging to common platforms.

In this research paper, we analyze the changes occurring in the small and medium business segment and make recommendations that maximize business value for the small and medium business owner.

How is email changing?

Email service, one of the original internet applications, is an indispensable part of any modern office. From a technology point of view it is relatively mature. Over the last few years issues in email have focused primarily on cost of delivery and email security, either in the form of spam or viruses. Other issues such as mailbox size have been somewhat insignificant as email has benefited from the Moore’s Law effects associated with the decreasing costs of disks and storage. Email providers have focused primarily on cost effectiveness, security services and operational effectiveness as market differentiators.

Two new market forces are now changing the use and cost of email. The first comes under the header of messaging convergence, which is getting all your messages “anywhere, anytime.” The second big market change is the expanded use of email archiving to meet federal regulations for document discovery in civil litigation.

Messaging Convergence

In the enterprise market segment, you cannot turn around without seeing titans like Microsoft, Cisco or Google touting Unified Messaging or Unified Communications. The vendors want to merge voice, email, instant messaging and cellular communications into a single platform. The theory is that the cost of synergy outweighs the cost of change. The battle in this arena is early and it is still very unclear who will be the dominant player and, more importantly for this white paper, how email will be impacted.

eDiscovery and Archiving

Archiving has the most straightforward affect on email. To respond to discovery requirements, there are three primary ways to comply with document discovery:

1. Rigid document retention rules, such as delete after six months
2. Save everything and buy storage or archiving systems to accommodate the data
3. Employ selective archiving with an archiving system

There are pros and cons to each approach, but most people prefer the second option because it is the most user friendly.

In the enterprise market space, the “infinite” archive as a document repository is mostly a factor of money and scale. In the small-to-medium segment, many companies operate in a POP3 environment which makes archiving impossible. In response to this business condition, many email vendors are now providing archiving service as added option for their POP clients.

Considerations for Change

Do you have to make a change in your email system? The answer is mostly likely “yes” even if you are happy with your service, especially the price. The simple answer is the FRCP regulations cannot be ignored. What other factors are important if you have to make a change? In this section we will deal with important and perhaps urgent issues that you should consider as you evaluate changes to your email service.

Archiving

As stated above, new FRCP regulations necessitate your consideration of how to handle document retention. The first, and most important, step is a call to your corporate attorney with a frank discussion of what risks you practically have for litigation. Drawing the line of how many documents (emails) to save and archive is highly subjective and somewhat a matter of philosophy. The ever decreasing costs of storage have typically lured people into saving documents rather than destroying.

Large corporations with permanent legal staff also push for specific archiving systems that aid in the preservation of documents identified during the course of litigation. This topic should be discussed thoroughly with your attorney. The simplest approach is to save everything with a generous destruction window, such as seven years.

POP3

Many companies in the SMB segment use a POP service because it is the simplest and cheapest way for a hosting provider to email connectivity. Using an IMAP service, where the email stays on the server, has typically been reserved for larger corporations.

The decision to abandon POP versus a server-based email system is largely interconnected to two issues: what type of email client (like Outlook) do you want to use and what is your archiving strategy?

The cost of Hosted Exchange, for example, is not getting extremely cheap and a small company can enjoy all the features of a server-based email system for the same costs of a POP server a few years ago.

Calendars

If you use group calendaring, then odds are likely you are already using a server-based email system like Exchange. If you want to use group calendaring, you need a server-based email system (and thus will abandon POP).

Smart Phones

Smart Phones are providing large productivity gains in the modern office and are becoming near ubiquitous. Blackberries and iPhones can be integrated deeply into the email system.

Convergence

Unified Communications is definitely in the future for all email users. Aggressive, early adopters in the SMB space may consider a UC platform, but waiting for some maturity and vendor shake-out is the best option for now.

Options and Recommendations

The recommendations below assume an office size of 20 people and that smart phones are essential. Other factors will be considered below.

All recommended designs assume a hosted vendor solution. Except under extraordinary circumstances, groupware-style email installations under 1,000 users are better suited for a hosted solution rather than an internally provided solution.

Technical Design

The most important factors in selecting an email service are the use of group calendaring and “tight” smart phone integration. If your organization uses group calendars, groupware mail services, like Lotus Domino or Exchange are required. If you want your smart phone to synchronize all your email, folders and contacts, you also will require a groupware email service. Almost all email services will synchronize incoming email with a smartphone but outgoing email and contacts either cannot be done or require a third party application. Although native email client synchronization may not be possible with non-groupware services, most smart phones have web browsers that provide real-time access to the user’s mailbox.

The next key element of the technical design is the selection of an archiving option. In this area, the market has clearly spoken. Most vendors are offering two types of archiving. The first is the “unlimited” or extremely large mailbox option. The second is an unlimited archiving service, which normally comes with simple litigation tools like search and tagging.

A final consideration in a technical design is a company’s commitment to or comfort with a particular vendor’s products. For example, if a company is comfortable with Microsoft Office and Outlook, one will probably lean towards using an Exchange-based service.

Vendor Recommendations

The cost of non-converged email service is very cost-effective, especially if you want a non-groupware email service. For example, Rackspace Hosting provides fully hosted Exchange Email service with Blackberry integration for $22.50 per user per month, but offers IMAP non-Exchange hosted email for $1 per user per month and that includes Blackberry integration!

Groupware solutions

In this section, I will assume that the hosted groupware solution is Exchange. For companies needing groupware with smartphone integration, the recommended solutions are as follows:

Vendor	Email	Smart Phone	Archiving	Specifications
Rackspace Hosting	$12.50	$10	$3	2 GB mailbox
Microsoft	$14.00	$10	$4.50	5 GB mailbox
Intermedia	$11.95	$10	$49 for first 2 GB $5/GB thereafter	4GB mailbox
SherWeb	$8.95	$9.95	$45 for first 3 GB $5/GB thereafter	3 GB mailbox

Non-groupware solutions

If your company is comfortable with the restrictions of a non-groupware solution, there are some very compelling offerings. There are as follows:

Vendor	Email	Smart Phone	Archiving	Specifications
Rackspace Hosting	$1.00	$0	$3	10 GB mailbox
Smarsh	$12.00	n/a	$0	unlimited
Google	$50/year	n/a	$45/year	25 GB mailbox

Archiving solutions

If your company only needs archiving, several vendors provide a standalone service.

Vendor	Archiving
Google	$45/user/year
Smarsh	$48/user/year
Microsoft	$54/user/year

If a company has its own POP or IMAP email server, there are appliances available that perform archiving. One such example is the Barracuda archiving appliance. The smallest appliance holds 250 GB of email for approximately $2,000. Over a three-year period and an office of 20 people, the cost averages $2.77 per user per month.

Final Thoughts

The current direction for the SMB definitely should not include Unified Messaging except for the early adopters. When should most companies consider UM and are there other factors that should be included in an email change process. As for UM by 2011 or 2012, wider spread integration will emerge that unify these technologies for the SMB market.

I still believe that totally online office application suites are also in the early adopter phase. One other major area, however, that SMB companies should evaluate when switching email is shared storage or office tools like SharePoint. SharePoint, in fact, is quickly becoming a leading seller for Microsoft and may eventually become an equal partner to its Office suite of products.