Email Archiving Grows in Popularity, But Apps Are Still Limited

The market for email archiving products is expected to more than double to $1.5B by 2011, says Osterman Research

December 20, 2008

5 Min Read
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Emails started out as a quick and easy way to communicate with a co-worker, customer, or client, but the messages rapidly evolved into a vital corporate communications and productivity tool. As the number of messages grew, companies found they needed tools to monitor and manage their flow. While the market for such products took flight quickly, a clear understanding of customers' needs was lacking. As a result, corporations now find themselves with a wide range of products with varying abilities to fulfill the challenge of managing, storing, protecting, searching, indexing and preserving emails.

The market for email archiving products is expected to show dramatic growth. Osterman Research estimates that companies will spend $609 million on these products this year and that spending will more than double to $1.5 billion in 2011. "Awareness about the need for email archiving systems has been moving from large enterprises to small and medium businesses," says Michael Osterman, a principal analyst with the research firm.

Companies purchase these tools for a variety of reasons. One is the growing volume of messages. It is not unusual for an executive to receive hundreds of emails and respond to 50 or more messages during the day. In many cases, they contain important information that users may need to find and reference a few days, a couple of months, or even a year or two later. Email archiving tools provide users with a simple way to find vital data or retrieve it if it is inadvertently deleted.

In addition, email systems themselves are often not up to the task. "The personal folders used with Exchange are very inefficient and can take up a lot of storage space," says Ralf Mueller, IT manager at Ivaco International Inc., a Canadian manufacturing company that moved to an archiving system from MessageSolution Inc. in 2007.

E-discovery is a third factor driving adoption. Various laws, such as the U.S. Federal Rules of Civil Procedure, require companies to retain electronic records for long periods of time. Not only do companies have to keep such records for up to seven years in some cases, but also they need to be able to access them and produce a subset of them quickly in response to litigation or other legal requests.With product demand rising, a variety of vendors have moved into the email archiving market. ArcMail Technology , Barracuda Networks Inc. , CA Inc. (Nasdaq: CA), C2C Systems , CommVault Systems Inc. , EMC Corp. (NYSE: EMC), Google (Nasdaq: GOOG), MessageSolution, Mimosa Systems Inc. , Proofpoint Inc. , Privacy NETworks , and Symantec Corp. (Nasdaq: SYMC) are some of the vendors pushing product innovation.

One issue is how well the archiving systems support different email systems. Most applications are designed to work with Microsoft Exchange, which is far and away the most popular email system. In general, archiving systems offer fewer functions and features that work with other email systems.

The number of archiving systems that work with IBM Corp. (NYSE: IBM)'s Domino and Novell Inc. (Nasdaq: NOVL)'s GroupWise, for example, have increased, but are still not widespread, according to Carolyn DiCenzo, a vice president at research firm Gartner Inc. In some cases, companies with those systems are forced to fall back upon least common denominator functionality, such as support at the Simple Mail Transfer Protocol gateway level, rather than take advantage of the full feature set that's available for Exchange.

This limitation is becoming more important because users now desire more than generic indexing and search features. Companies are looking for ways to manage messages based on their value, according to DiCenzo. This desire can seem a bit nebulous, but increasingly, they want to create archives where information is categorized by topic or content or users' job functions. Ideally, all messages would be placed in specially designed folders that identify their value, so it becomes simpler to find vital information.

Better programming tools are needed to support such functions. Email suppliers need to provide more robust application programming interfaces within their products. This has been taking place. Microsoft Corp. (Nasdaq: MSFT) added envelope journaling function to its system, which provides more granular retention features. The archiving vendors can then build upon these features.Companies expect their archives to grow to hundreds of terabytes because everybody keeps sending more emails and companies are keeping them longer for both business and legal reasons. Yet, systems need to be able to move files around based on a variety of factors. The chances that a stored email will be looked at decreases greatly as time passes, so messages more than 90 days old can be archived on slower and cheaper storage. Year-old email can be moved to an even slower and less expensive form of storage, like tape.

Delivering better integration is another item near the top of vendors' to-do lists. Corporations often find themselves with a hodgepodge of archiving options -- one for email, one for files, one for images, etc. Rather than autonomous systems, businesses would like to deploy one system that works with all of their data.

Another downside is these products can be quite expensive. Pricing typically starts near $50,000 and can quickly move past the $100,000 mark.

Like other software market segments, there also has been growing interest in using services to help lower costs. "Small and medium businesses are becoming more interested in email archiving services," says Osterman, whose firm expects these services to account for about two thirds of total market revenue in 2011 compared to about one third in 2008.

The email archiving market has moved from an interesting idea to accepted technology in short order. Even though deployment is growing, there are many new companies entering the market with products or additions to existing products, so the market is expected to see significant changes in product design and capabilities in the coming years.0

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