Over the past few years, Software-as-a-Service (SaaS) has played an increasingly significant role in the way businesses approach email. The on-demand versus on-premise debate has raged on throughout the IT industry, leaving opinion divided: issues over cost, reliability and control being at the core.
Forrester Consulting recently published a study looking at the benefits of second generation SaaS, and in particular the total economic impact of Unified Email Management. Using the research, this article will examine the true cost of email to businesses and highlight how the next generation of Unified Email Management will provide businesses with substantial cost savings.
The last decade saw levels of email traffic explode as it quickly became the de-facto communication method of choice for businesses – and it’s still growing. Last year email traffic was up 21% and the boom in social media is likely to boost it still further.
Email has meant huge increases in the speed with which businesses can communicate, share documents, action items and co-ordinate activity across the globe.
Email has been part of our lives for so long that it is now very much taken for granted. Only when servers go down do users appreciate how essential it is to their business and how reliant they are on it to keep things running smoothly.
In itself email is a relatively simple application. However the sheer volume of data that now passes in and out of an average company means that the cost of running email is as increasingly sizeable piece of the IT pie that is only likely to grow as organisations conduct more and more of their business over the internet.
Added in to the mix is mobile email which – according to some estimates – is likely to increase dramatically as mobile messaging revenues rise to $233 billion by 2014 from $150 billion in 2009.
In general the business tends to view email as simply flowing to-and-from the organisation, with little understanding of the complexity involved. Behind the scenes IT departments are spending vast amounts of time safeguarding email from spam and malware, maintaining servers and increasingly implementing and managing data retention policies.
This is further complicated by the rapidly evolving ways in which people are choosing to access their email and the fact that many people now use their inbox – both personal and professional – as an informal filing system.
Evolution of email architecture
Email infrastructure tends to evolve in an organic fashion. As new threats or regulatory requirements come into play, IT departments very rarely step back to analyse the total cost of running email to the business. Understanding how much current email systems really cost the business can uncover considerable opportunity to both reduce overheads and provide a better service to users.
Breaking out the costs of a typical mail solution can be sobering. Whilst initial capital outlay can be quite significant in itself, it is the ongoing operational spend or the ‘hidden costs’ which mount up and cost companies cash which could be put to better use elsewhere. In fact, Gartner2 estimates that the annual budget to own and manage traditional "on-premise" software applications can be up to four times the initial purchase price.
Email – the traditional options
Until recently there were only two approaches to email; on-premise and SaaS. Supporters of the different models were constantly pitting the advantages of each against each other, with those in favour of on-premise arguing the case for fully deployed and controllable on-site technology, against those in favour of enhanced agility and the ability to outsource responsibility for maintenance and upkeep.
However, second generation email management in the form of a hybrid SaaS and on-premise model is now being developed, encapsulating the advantages of both models as well as a few additional ones of its own. The hybrid model has already shown it can reduce costs and take much of the pain away from the management of what is an increasingly complex environment.
Email management specialists Mimecast recently commissioned Forrester Consulting to conduct independent research into the hidden costs of email3. Using Forrester’s Total Economic Impact (TEI) framework4, the research investigated the TEI of Unified Email Management (UEM) against on-premise email systems at five $1 billion global business services firms with 5,000 users. The research highlighted that the second generation UEM model can help eliminate many of these so called ‘hidden costs’ of on-premise deployments.
Battling hidden email costs with Unified Email Management
There are many hidden costs in email management, which businesses all too often overlook. Some of the areas where on-premise solutions incur these costs quite heavily are hardware replication, archiving infrastructure, legacy systems and internal IT help desk support costs.
Up until now many businesses have decided to continue to favour the on-premise model, purely because they are more familiar with it (and therefore consider it less risky) and believe it offers more depth and breadth of services than SaaS. This coupled with the difficulty in accurately measuring outgoings means on-premise can look like the safest option. In the research conducted by Forrester, however, it was highlighted that the total cost for these businesses to adopt UEM over a five year period would be $1,235,465 compared to $3,010,698 for deployment of an on-premise solution - a total cost saving of $1,775,233.
1. Costs of on premise archiving
Using the Forrester TEI framework, the report highlights that by deploying UEM, customers were able to avoid traditional costs associated with refreshing existing on-premise email archiving equipment. By avoiding these costs, plus the associated internal and external expenditure for planning, integrating, maintaining and operating the solution, customers were able to save $1,052,565 over a five year period.
As a result of UEM, the composite company investigated by Forrester saved $458,860 over a five year period as a result of not having to replicate services between numerous email sites. In addition, costs usually incurred as a result of installing hardware and software, maintaining and upgrading the network, as well as integration, migration and ongoing operating costs were also avoided.
Archiving Infrastructure is another costly aspect of on-premise technology.
3. Legacy System Cost and IT Desk Productivity Gains
The costs associated with maintaining legacy systems are well documented. Not only in many cases were the systems expensive to buy in the first place, but they are also expensive to replace or configure with new technologies. Through deployment of UEM technology, however, the composite company investigated in the study avoided costs which would have been incurred for replacing their legacy email antivirus gateway and bridgehead routing servers, saving them a total of $32,270.
In addition, enhanced email capabilities as a result of UEM meant that IT departments were able to retrieve lost, deleted or archived emails over a period of ten years in less than two seconds. Not only did this ensure compliance with regulation but also enabled them to focus their energies on activity more beneficial to the company. As a result of UEM, in terms of man hours, IT departments saved $7,774 per year totalling $38,720 over a five year period.
Looking beyond the cost benefits
Compared to hybrid SaaS, the cost of running on-premise email is high. But it isn’t solely about cost. This new UEM hybrid model also combines the benefits of both on-premise and SaaS, bringing a very powerful email technology to the market.UEM offers easy installation, 99.999% uptime, flexibility for workers and seamless integration with the operator’s Microsoft Exchange and Outlook ensuring minimal impact on staff. Furthermore, not only does this second generation model allow IT managers to retain complete control of their systems, but also provides them with a 24/7 pro-active support hotline, which is not only available to assist, but also has the ability to monitor and make companies aware of any issues they may not yet be aware of.
Forrester’s research has proven that Unified Email Management can deliver significant cost savings to businesses over a five year period in the form of increased end user and IT productivity, IT cost savings, and IT cost avoidance. Specifically, Forrester found that customers were not just avoiding costs associated with initial implementations but also those that occur later on during the software ownership life cycle. Thus as a result of UEM, companies would not have to deal with software upgrades, server refreshes and scaling storage requirements costs.
In addition, better email features saw a decline in the number of help desk calls from end users and that the users were spending less time each week managing their spam. This allowed IT staff to be re-allocated to IT tasks which could add value to the business instead of acting in an administrative capacity.
Ultimately, developments in second generation SaaS are occurring all the time and the market is moving rapidly to adopt SaaS solutions. SaaS based archiving grew at more than twice the rate of traditional on-premise solutions in 2008 according to Gartner.
Peter Bauer is CEO of Mimecast.