Outsourcing Email Not an Easy Choice

Email is fast emerging as the Achilles heel of firms' compliance and legal strategies, prompting many organizations to outsource their email archiving to third parties. Despite vendors' claims, however, storage managers should not see outsourcing as an automatic ticket to cost savings.

A number of vendors, including Fortiva, Zantaz, and Iron Mountain, are offering email archiving services, which they tout as a cost-effective way to control spiraling volumes of email. (See Fortiva Guarantees Search, Zantaz Offers On Demand, Outsourcers Beef Up Email Archives, and Email Archives Arrive.) Fortiva, for example, claims that it can archive emails at a cost of $3.58 per user per month. A recent study by Osterman Research (sponsored by Fortiva) put the typical email archiving cost for a mid-sized firm at $4.53 per month over a three-year period. (See Email Archiving High In-house.)

But Sasan Hamidi, CSO of Miami, Fla., travel firm Interval International, tells Byte and Switch that cost savings are not necessarily part and parcel of outsourced archiving. The exec explains that he is currently looking to outsource email archiving for his 1,700 end-users to either IBM or Iron Mountain.

"It's not that much cheaper [than keeping it in-house]," he says, adding that the outsourcing project was driven by a lack of internal resources, as opposed to hard cost considerations. "For the size of our environment, I would have had to dedicate two full-time staff to this."

These sentiments were echoed by Dan Tanner, a member of the Storage Networking User Group of New England (SNUGNE) and founder of consulting firm ProgresSmart. "It's really hard to say whether outsourcing is cheaper or not," he explains. "It depends on the situation, and has a lot to do with the level of staffing in your IT department."That said, more and more firms are considering the outsourcing route. With an estimated 90 percent of U.S. companies involved in some form of litigation or other, the ability to quickly access archived emails could be the difference between courtroom success and expensive failure. (See Storage Goes to Law School.)

Analyst firm IDC predicts that the market for email archiving, which was worth $318 million this year, will reach more than a billion dollars by 2010. (See Email Archiving to Grow.) According to IDC, outsourcing accounts for around one third of all email archiving, with most companies opting to handle their archives themselves with software from the likes of EMC, HP, or IBM.

"Some people want to manage it themselves -- they perceive an improved level of control," says Laura Dubois, research director of storage software research at IDC.

Down in Florida, Hamidi admits that, in an ideal world, he would not have gone the outsourcing route. "Going through a third party, things are out of your hands," he says. "From a security perspective, you always want to avoid exposing your sensitive information to a third party."

The exec says that, if anything, he is outsourcing his email archiving as a temporary measure. "I have given it a two-year timeframe for us to bring [the project] in-house," he explains, adding that this should give him the time he needs to bolster his own internal resources.Neither Zantaz nor Iron Mountain was able to provide Byte and Switch with a figure for their typical outsourcing costs for email archives. Steve King, the Zantaz CEO, says that various factors come into the pricing equation, including the number of users and the length of the contract.

The exec, however, tells Byte and Switch that 14 of the top 20 financial services companies are using his firm's services. Zantaz currently has more than a 11 billion emails stored within its archive, he says, adding that this figure is growing by a billion emails a quarter.

Email archiving has already proved to be crucial in at least one high-profile legal dispute, with the Securities and Exchange Commission (SEC) slamming Morgan Stanley with a $15 million fine when it was unable to produce email evidence in court. (See A Fine Mess.)

Compliance and legal issues are not the only reasons why firms are looking at email archiving. A recent Byte and Switch Insider, for example, warned that unless IT pros implement effective archiving, email can overtake a server with files so large that the application topples, message data is corrupted, and response times on the corporate network are slowed. (See Insider: Email Archiving Hits Bottom.)

James Rogers, Senior Editor, Byte and Switch