Email Archiving Services Trend Up

Managed email archiving services are growing in popularity as rapidly as standalone email archiving products, indicating that a growing number of users are willing to forgo perceived control over email archiving and get somebody else to do it.

According to analyst Laura DuBois of IDC, hosted services now comprise 40 percent of an overall email archiving market that reached $477 million in 2006 revenues. And while the ratio of services to email archiving products isn't clearly changing, spending on services will grow just as fast as product spending -- over 40 percent this year, IDC expects.

"Some users have compared services to products and find it economically more viable to go with the hosted approach," she says. The shorter implementation time, truly imperative when litigation looms, often tips the scales in favor of services, she notes. Still, she says companies like Zantaz that can offer both software and services probably stand the most to gain in the market.

Not long ago, it wasn't clear that choosing to outsource email was necessarily cheaper than doing it yourself. But a growing roster of suppliers, including Zantaz (recently sold to Autonomy for $375 million, Fortiva, LiveOffice, MessageOne, and MessageOne resellers IBM, Iron Mountain, and Sungard, all claim the tables are turning.

"On-premise solutions feature complexity of deployment and application," says Bryan Rollins, VP of product management at MessageOne, whose EMS Email Archive service offers email archiving and e-discovery. He lays out the following cost factors of on-premises solutions when selling his company's services:

"There can be lots of hidden costs," Rollins asserts. "People don't always think about the fact that they will need to upgrade their infrastructure, or pay three to five times the software costs in professional services to get it to work the way they want."

There are also costs associated with making email archiving mistakes and getting sued or audited.

All these costs, of course, need to be stacked against the services fees. MessageOne's service is billed as a monthly subscription, with the cost components including a per-user and a per-Gbyte fee for storage required to support the customer's email. Typically, both elements factor into $3 to $5 per user and roughly $5 per Gbyte at the high end. Options like security and e-discovery can add to the fees.

Some services are priced differently. In addition to OEMing MessageOne's EMS service, Iron Mountain offers its own Digital Records Center for Compliant Messaging, a service that manages and archives email, instant messages, and Bloomberg communications for large customers needing to meet stringent SEC regulations for financial reporting. This service is charged only by the volume of storage chosen, though that can vary from $300 per month to much more. "Some customers give us 20,000 emails a day, others three and a half million messages a day," says Iron Mountain product manager Sean Hegarty.There is evidence that users are willing to opt for outsourced email archiving, regardless of cost variables. When the Texas Credit Union League chose a Fortiva service over in-house archiving a couple of years back, for example, it was largely due to the kinds of cost factors cited above.

The TCUL team felt that investing in an in-house solution would require a major change to their infrastructure, as well as additional personnel and ongoing maintenance. What's more, they believed that the risks of doing email archiving in house were "high." With a service, they could get up and running -- and have easy access to a responsible throat to choke.

At the other end of the spectrum is Maureen Durack, director of management information systems at Chicago-based law firm Vedder, Price, Kaufman & Kamholz, who is using CA's Records Manager product. "Because we're a law firm dealing with a significant volume of emails, we like to have some flexibility as to where email is stored so that we can do a better job for archive, backup, and disaster recovery," she says, explaining that the firm is also implementing CA's Message Manager

It is not just managed email services that are being overhauled at the moment. Earlier this week, for example, Zantaz announced tighter integration between its Enterprise Archiving Solution (EAS) and its Introspect e-discovery offering.

In a similar move, rival CA announced that it was bundling its Message Manager, Records Manager, and Files System Manager offerings into a solution called Information Governance. "The benefit of the combined solution is being able to be proactive about compliance," says Kristen Perdue, director of product marketing for CA's Information Governance division, explaining that firms should be able to respond to audits and e-discovery requests much quicker.Proponents of email archiving insist adoption figures will bear out their claims to growing popularity. But isn't it possible that a large firm with rich resources might do better with its own in-house solution based on off-the-shelf email archiving wares?

That's debatable, the suppliers insist. "Costs for in-house deployments scale just as high with large organizations," says MessageOne's Rollins. And Iron Mountain's Hegarty has a similar view: "The larger the organization, the more data you have, and also larger firms have greater propensity to be sued." Litigation readiness in the form of a well organized and accessible archive can be a high-value item, in his opinion.

While it remains to be seen whether sales of email archive services will ever grow more quickly than standalone products, one thing is clear: Customers continue to opt for services at a rate at least on a par with consumption of in-house solutions.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.