Interest Grows in Email Archiving Services

Like other segments of the software market, there is movement in email archiving to offer archiving services as a replacement for or a companion to traditional archiving systems. These services are usually offered under the SaaS, or software-as-a-service, label. And there is growing interest in these archiving services among companies that are looking to relieve overburdened IT staff or those that are seeking more features and functionality than they can afford to buy with tight budgets for new technology systems.

"Small and medium-sized businesses are becoming more interested in email archiving services, and SaaS is a good option for them," says Michael Osterman, principal analyst with Osterman Research , which expects these services to account for about two thirds of total archiving market revenues of $1.5 billion in 2011, compared to about one third of a $609 million market in 2008.

The rising interest has attracted a variety of outsourcers, service providers, and other vendors. Autonomy Corp. , Dell Inc. (Nasdaq: DELL), Global Relay, Google (Nasdaq: GOOG), LiveOffice LLC , Mimecast, and Proofpoint Inc. are among the firms delivering these services. The number of options is expected to rise as message security service providers, Microsoft Exchange managed service suppliers, and online backup companies increasingly view archiving as a natural addition to their service menu.

There are a number of reasons why businesses and other enterprises are moving to SaaS offerings. First, these services offer companies the potential to save money. Paying a monthly charge will be less costly upfront -- and in some cases throughout the life of the service -- than purchasing email archiving software and servers. Reduced staffing is a related potential benefit. Companies will not have to hire IT staff to run the email archiving system and can hand that task off to a third party. In some cases, companies started out managing an email archive themselves and later decided to hand that task over to someone else.

While many companies start an SaaS examination by looking at the ways that outsourcing can save them money, there are other potential benefits. An outsourcer may be more familiar with email archiving problems and move to resolve them more quickly. There also is the potential for a service provider to be more innovative, add new features, or offer more flexible services than an in-house staff. Also, outsourcing can free up internal IT resources, so companies can focus on core business issues.Initially, SaaS services emerged as an option for companies that needed to track their email to address compliance or e-discovery concerns. Lawsuits have prompted interest in email archiving because plaintiffs in many cases have asked companies to produce several years of communications.

Acquisitions have also driven similar business requirements. "Time constraints can often push companies to deploy SaaS archiving solutions," notes Bill Kee, product marketing manager at Google. In these cases, companies need to quickly ingest and catalog a great deal of historical data. Often, the IT staff does not have the resources needed to implement a new system in a timely manner.

The mix of services that vendors offer has been changing. Gradually, they have been delivering services that can also address basic mailbox management, an area that has become more complicated recently because of the rising volume of email messages. Increasingly, companies have put archiving systems in place and been adding to them. In many cases, company policies or regulatory requirements have lengthened the period that companies have to retain past emails.

As corporations store messages for longer periods of time, the volume of information as well as the complexity in overseeing it has been rising. Corporations can no longer store their messages in a file cabinet at the local office,” says Sheila Childs, director of product marketing for archiving and compliance products at EMC Corp. (NYSE: EMC).

Yet, there are some possible downsides with these services. The main one is that a company no longer has control over its information. Instead, it must rely on a third party that may not be as diligent in the way it handles and secures the data as a company desires. A possible rebuttal to this perception is that a third party can provide a more impartial and -- therefore more trustworthy -- implementation. This point can be relevant if the data retention issues are related to court cases.Another issue is cost over the long run. Potential customers need to understand how overall costs can escalate as the volume of email grows. After all, your co-workers aren't going to reduce the amount of email they generate. Another factor is the cost of add-on features that you don't want now but might want down the road.

Also, the long term viability of SaaS suppliers should be an issue for potential customers. Companies need to feel confident that the service provider will be around for the long term and will continue to be able to maintain the archive and provide access to the data. A number of these companies have already been swallowed up by other vendors, and the current economic instability could lead to additional market instability.

Another factor is understanding just how the email archive is stored and whether any type of proprietary technologies or formats are used. This is important in case a customer wants to move the archive to another service provider or take it in-house.

More businesses are becoming aware that they need some sort of email archiving system or strategy, especially small and mid-sized businesses. That is helping to generate more interest in email archiving services. This market segment is still in a fledgling stage of development with vendors building out their service offerings. While corporations can find many possible options, time and effort are required to locate the one that best meets their needs.