Should Your Email Live In The Cloud?

Tedschadler by Ted Schadler

Should your email live in the cloud?

Colleague Chris Voce and I have written a pair of reports to answer that question from the perspectives of an information and knowledge management professional and an infrastructure and operations professional. For many firms, the answer is "yes," certainly for some users or some email support services.

The first report tackles the issues of cost. It turns out that most companies have no idea what their fully loaded email costs are (and most low-ball the estimates). But once you add in staffing costs; server and desktop software licenses; upgrades and support fees; archiving and filtering costs; mobile support; hardware, storage, and power costs; and financing costs, email's a big ticket item, as much as $36 per user per month for a 15,000 person company offering BlackBerry support.

Some findings from this cost analysis:

  • A mobile-less information worker can cost $25 per user per month or a whopping $300 per user per year. In a 10,000-person company doing message archiving, that's an annual budget line item of $3 million.
  • When you compare the fully loaded costs of on-premise email to the cloud-based alternatives, the cloud service wins for many worker segments in companies (or divisions) of 15,000 users or less.
  • Microsoft's new online service (fully loaded with desktop costs and full offline Outlook support) comes in at just over $20 per user per month, 20% less than the fully loaded on-premise cost. Other cloud-based providers will gladly compete for your business on price.
  • Google's online-only version of email+other stuff has a fully loaded cost of $8.47 per user per month. [2:45pm Jan 6: As Alex Anglin points out in his comment, Gmail supports IMAP and POP, so it does work with offline email clients, including the BlackBerry and iPhone, I should add.]
  • The market for cloud-based email services is heating up. We are tracking 42 vendors that provide cloud services, either full mailboxes or email management, message filtering, message archiving, or email continuity services.

Chris's report on infrastructure and operations has the details on the hurdles to overcome, the key integration points, and which email workloads to move to the cloud. In particular, email filtering and archiving are prime candidates to move out of the data center immediately.

And both reports lay out a strategy to segment and provision different worker groups to optimize the email spend:

  1. Mobile executives need the most services (and cost the most).
  2. Information workers without mobile devices are the bulk of the market today. Provision them for success with 1 gigabyte mailboxes.
  3. Occasional users that can get away with Web-only access and smaller mailboxes can be much cheaper to provision.

Chris & I are also doing a pair of teleconferences for Forrester members on January 26th and 28th to review the analysis. The registration should open up in a day or so. Please send me an email if you want the heads up once registration opens.

Our take is that particularly in these recessionary times, you can save money by segmenting your workers based on their email and collaboration needs, calculating your fully loaded email costs, and moving some or all of it to the cloud. Disagree? Have thoughts? Please comment.



re: Should Your Email Live In The Cloud?

Not to nitpick, but Gmail does allow for access via IMAP and POP, meaning that it will work with pretty much any e-mail client. I wouldn't consider it online-only.

re: Should Your Email Live In The Cloud?

A good point, Alex. I should have clarified the point. Gmail, like many other online email providers, supports the IMAP and POP protocols, which means that it does work with most email clients (offline, online, mobile, whatever).My key point, I guess, is that Google's design point for Google Apps is for connected workers, for example, for document authoring and viewing.I tweaked the point in the post. Thanks, Alex!

re: Should Your Email Live In The Cloud?

Ted,I just read this article and your paper on this topic and found it very informative. I work in a very regulated industry and would love to see more about what legal and regulatory challenges large global companies are facing when attempting to move their email into the cloud.

re: Should Your Email Live In The Cloud?

Great question, Andrew. I have not had a great deal of experience with the specific requirements in regulated industries beyond the need for archiving, eDiscovery, and information security. For those requirements, though, the service providers have the same set of capabilities as many corporate data centers.Archiving, for example, often requires an offsite copy, something that a service provider like USA.NET or Microsoft or Cap Gemini is already set up to to.But I'd love to hear from others in regulated industries. What barriers and issues are you running into? Please let me know via a comment or directly via email.

re: Should Your Email Live In The Cloud?

Ted,I am not so worried about archiving as I am European privacy laws. If you host your entire email on one data center in say the US or even on European company some EU countries may have issues. I can contact you directly but not sure of your email address.

re: Should Your Email Live In The Cloud?

Andrew: Great point and one that we do run into. My email is for any that wish to contact me directly.Regarding the privacy laws around personal information and business information, we see only one current solution: Make sure your provider has data centers in the countries that are most stringent (Germany in Europe, from what I understand) and privacy inspection rights to that architecture.I do know that Microsoft, for example, has a roadmap for international data centers, hence support, in 2009. USA.NET has global plans as well.