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Email Gets More Outsourced Options: Page 2 of 3

Email archiving as a service is a model that's worked best for Iron Mountain and Zantaz, both of which presently dominate the market for email archiving services, according to the Radicati Group consultancy. (See Smoke Clears for Iron Mountain.) "The demand is there. There's obviously room for growth, but competition hasn't been there," says Radicati senior analyst Masha Khmartseva.

The Radicati Group has put the 2006 worldwide revenue figure for outsourced email archiving at $248 million; but by 2009, the firm predicts that figure will be $1.3 billion.

Besides the companies mentioned above, a host of other players have been aggressively pursuing the market, often using the newly minted Federal Rules of Civil Procedure (FRCP) changes as a rallying cry. (See FRCP Tip Sheet.) Among these are Frontbridge, MessageLabs (based on Fortiva technology), and Postini, to name just a few.

Indeed, it could be compliance that turns the key for this market. Up to now, there has been little financial reason to outsource email archiving rather than doing it in house. "It's not that much cheaper," Sasan Hamidi, CSO of Miami, Fla., travel firm Interval International told Byte and Switch earlier this year. (See Outsourcing Email Not an Easy Choice.) Hamidi says he chose to outsource because it would have cost him as much to hire extra personnel, which was ultimately more trouble.

The prospect of saving money in litigation searches, avoiding fines and lawsuits, could tip the scales in favor of outsourcing. For many firms, adding compliance and email security products on top of archiving could mean added cost and complexity, particularly given the costs of filtering software, which can be $25 per seat. (See Stop That Email!.)