Email Archiving And How To Sell It?

Posted by Howard Marks
November 30, 2009

Even with under 50 percent penetration, the Email archiving market is starting to shake out.  Two vendors are trying to build new identities for themselves, to establish new market niches and change from being the number 8 product in a 22 player field and be thought of as first, second or third in the market they define for themselves. Metalogix went the value route, reducing the price of their Professional Archive Manager for Exchange (PAM) to $15/user while releasing a new version. ZL Technologies decided to sue Gartner for continuing to put them in the niche category of their Magic Quadrant report.

Leaving aside just how much influence paying vendors has over market research from firms like Gartner, I don't understand the logic behind ZL's lawsuit. Their primary complaint seems to be that Gartner's rating model places too much importance on vendor scale.  As a small vendor, ZL therefore gets called a niche player. This sounds to me like the hundreds of engineers that never understood why their bosses bought the EMC solution when the one from Akbar and Jeff's Computer Hut was technically superior.

Big company CIOs, like Gartner's clients, don't like dealing with swarms of small vendors even if each makes the very best solution to their problems. They don't want to worry about vendors going out of business or not having the resources to deal with a big customer. They also want to deal with fewer vendors that have broader portfolios, Cisco and UCS amongst others. So Gartner's opinion that they're niche makes sense.

So regardless of whether Gartner is influenced by vendor clients or as transparent as we would all like, ZL just sounds small and whiny. If their product is as gee-whiz as they believe it to be, the thousands they're spending on lawyers could have been spent on PR and analysis. Fight whitepapers with whitepapers not lawsuits, which are likely to blow back on you.

Metalogix's new low price is part of an interesting strategy by their lead VC firm Insight Venture Partners to help them become a leader in technology markets by being the value player. They identify growing but crowded markets with high profit margins like email archiving. Then find a player with a product that's technically competitive not in the medals, buy the company and lower the price. They started with SolarWinds, who makes network management tools for a lot less than HP OpenView and now Metalogix.

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