Email Gets More Outsourced Options

Email proliferation and compliance requirements are driving hosted options

December 15, 2006

3 Min Read
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A slew of newcomers are using promises of compliance to push email management services, in a trend that could mean growth in outsourced options.

Recent announcements include MX Logic, a four-year-old firm based in Colo., which today unveiled MX Logic Message Archiving, a nationwide Web-based email service based on technology from ContentFast. (See MX Logic Adds Archiving Service.)

Aimed at SMB customers, the new service is being rolled out in the first quarter of 2007, but MX Logic is engaged in a trial offering with 30 accounts. For a monthly subscription fee of $13 per user, a company can host all email offsite, using a secure Web connection that requires no on-site hardware or software.

But the key functions include surveillance of outgoing messages and compliance archiving. This more full-featured service will bring the cost to $16 per user.

In news last week, Austin, Texas-based MessageOne announced EMS Archive, a suite of hosted services that includes archiving, legal discovery, and compliance control for corporate email. Based on proprietary technology, the service starts at about $3 per mailbox per month.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!.)Bottom line? If services function as promised, expect to see outsourcing grow in popularity as an email management option.

Mary Jander, Site Editor, Byte and Switch

  • Fortiva Inc.

  • FrontBridge Technologies Inc.

  • Iron Mountain Inc. (NYSE: IRM)

  • MessageLabs Ltd.

  • MessageOne

  • Postini Inc.

  • Zantaz Inc.

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