E-Mail on the Cheap

SOUTHWEST AIRLINES WANTED to give e-mail accounts to each of its pilots, flight attendants and ground-crew workers—critical employees who needed to be in the corporate loop but didn’t even have computers. The problem: It would have been prohibitively expensive to give all 30,000 of them accounts on the corporate mail system, Novell GroupWise. It wasn’t just the license fees. Shannon Kessner, manager of Intel core services at Southwest, says that the company would have needed to buy—and manage—at least 30 new servers.
Instead, Southwest chose a more lightweight e-mail system, Novell’s NetMail. In early 2002, the company provided e-mail accounts to all 30,000 “deskless” employees using a fault-tolerant array of just three servers. Those employees check their mail using Web browsers, usually from home or from PCs installed in airport terminals. Meanwhile, the 8,000 corporate employees with desks still use GroupWise, which includes the collaborative features that they need. Southwest saves money on software licensing: Fees for NetMail are typically $12 to $15 per user, says Novell, compared with about $70 per user for GroupWise. And the airline also saves on administration costs because the new system is simple, stable and requires little maintenance. “We’ve had very few problems with it at all,” says Kessner.

Like Southwest, many companies are discovering that corporate e-mail systems don’t have to be expensive to be effective. In many cases, simple, stripped-down mail servers fit the bill quite nicely. But that doesn’t mean you should rip out your Exchange or Domino servers tomorrow.

Expensive E-Mail
Microsoft Exchange and IBM Domino/Notes dominate the corporate e-mail world. Together, the packages own nearly 90 percent of the Global 2000 e-mail market, and that dominance will continue through 2007, according to Meta

Group. However, these products are expensive.  Mix in costs for maintenance, administration, upgrades, training and downtime, and the average cost of providing e-mail during a three-year period tops $18.45 per user per month for Exchange and $12.55 for Domino, according to The Radicati Group, a consulting and market research company. Add in the platforms and network infrastructure required to run these systems, and the fully loaded, monthly per-user cost soars to $36.56 for Exchange and $33.88 for Domino.

Fortunately, fully functioning corporate e-mail systems can be had for far less. According to Radicati, Oracle Collaboration Suite averages $5.40 per user per month ($16.25 including the infrastructure costs) and Sun One Messaging Server costs $8.04 ($17.80 including infrastructure).

If you’re willing to forego the more advanced features offered by those high-end products, the cost drops to the floor. Sendmail recently announced a partnership with Hewlett-Packard and Intel to provide corporate e-mail (called Workforce Mail) for a total cost of $1 to $2 per user per month, while IBM claims that its new, low-cost Lotus Workplace Messaging can do the same for less than $1.

Switching Costs
So why would anyone pay high prices when they could deliver e-mail for one-sixth to one-tenth the cost of Exchange?

One reason is that corporate knowledge workers—those whose job it is to discover, create and manage information—actually do use the more complicated collaborative features (document sharing, scheduling and the like) built into Notes and Exchange. In some cases, the low-cost systems lack basic features, such as spellcheckers and mail-filtering rules. And you can’t switch from a full-featured e-mail system to a less capable one without angering at least some end users. “Once you’ve convinced people to use a fork, you don’t want to take that away and convince them to use a spoon,” says Mark Levitt, research vice president for collaborative computing at IDC (a sister company to CIO‘s publisher).

What’s more, everything you’ve already spent on e-mail to date is a sunk cost. You’re not getting that money back, even if you switch. “Although commodity e-mail systems may look cheap on paper, the ongoing maintenance of your existing e-mail system may not be as expensive as switching,” says Matt Cain, senior vice president at Meta Group. Finally, switching e-mail platforms requires your IT staff to install and support a new system (a major retraining headache) and to migrate user accounts and data.

The bottom line? “I don’t think there is such a thing as cheap e-mail, particularly if it’s got the capabilities everybody wants,” says Robert Moon, CIO and vice president of information services for ViewSonic, whose e-mail system is based on Oracle Collaboration Suite.

Lower Cost of Ownership
Commodity e-mail systems do, however, offer some powerful advantages that lend themselves to situations where basic e-mail is all you need—such as providing e-mail to deskless workers or to users who are not computer savvy.

First and foremost is the lower cost of ownership. Commodity mail systems are based on robust, standard, open Internet mail protocols, such as SMTP, POP3 and IMAP. They run on standard hardware and may use the same back-end data stores as the rest of your enterprise. They can deliver e-mail to end users via Web interfaces (much like Hotmail or Yahoo mail), to standard POP clients such as Eudora or in some cases even to Microsoft Outlook, all of which may simplify client maintenance headaches.

Lotus Workplace Messaging, for example, uses industry-standard J2EE code running on IBM’s WebSphere, stores its data in a DB2 database and delivers mail via webpages. If you’re already running those systems for, say, your Web applications, you can get significant economies of scale by running e-mail on the same platform. (By contrast, Domino uses a proprietary data store, has its own programming language, and generally requires the bulky and idiosyncratic Notes client.)

Keep It Simple
When your mail system is based on a standard platform, maintenance is simpler because your IT staff can apply skills it has already learned in managing other IT resources. That’s one reason Jim Bobo, systems administrator and chief programmer at Courtesy Insurance Agency, switched his company’s 100 users from Exchange to Stalker Software’s CommuniGate Pro. “You don’t have to have a degree in Microsoftese to use the thing,” says Bobo.

Beyond cost, some companies are finding that fewer features can actually be beneficial to the end users. For instance,

ManuLife Financial, a Canadian financial services company with extensive business in Asia, used Lotus Workplace Messaging to deliver Web-based e-mail to 3,600 independent insurance agents in Japan. Because most of those agents are not computer savvy, the company wanted an easy-to-use solution. “A high degree of functionality would be a bad thing because you’ve got novices who have never used a computer before,” says Rob Salerno, a partner at MetaLogic Consulting, which installed the Lotus system. “You need something that has an easy-to-use interface and performs well.”

Others agree. For many workers who don’t use PCs every day—factory workers, retail employees and the like—simpler is better. “Low maintenance and low total cost of ownership make a lot of sense for those workers who don’t need a lot of high-end features,” says Dana Gardner, a senior analyst for The Yankee Group.

A Mature Market
Such employees—about one-third of the corporate workforce, according to estimates by Radicati and Ferris Research—are a tempting market for e-mail vendors. With the rest of the corporate world already sewn up by IBM and Microsoft, vendors are looking for growth where they can get it. Therefore, the recent push toward low-cost mail solutions may be driven more by vendors’ marketing desires than it is by customer needs.

There’s also an underlying technical reason for vendors to push standards-based e-mail. Putting e-mail servers on a common foundation gets vendors in line with the overall industry trend toward open Internet standards. “The business design we have, which is based on industry standards, leverages the industry’s investment, which is why we can get the licensing costs down,” says Ambuj Goyal, general manager of IBM’s Lotus Software. In other words: With millions of developers working on Java applications, IBM doesn’t have to devote its own resources to building a robust platform from scratch. IBM’s goal is to have all of its messaging and collaboration products migrate to an open platform over time, says Goyal, while preserving support for current Notes clients.

Naturally, Microsoft isn’t taking this threat lying down. The new Exchange Server 2003 includes a per-device licensing option that makes it more economical for companies that want to provide kiosk-based Web access to large numbers of deskless workers. Instead of paying for each user, companies can pay a license fee for each device, with an unlimited number of users. And Microsoft has announced plans to move Exchange toward a SQL-based data store, although that is probably several years from fruition.

How to Save Money
In addition to deskless workers in large corporations, commodity mail vendors may find some traction among small and midsize businesses, where the allure of added features may not be enough to overcome high costs. While commodity mail is not going to unseat Exchange and Domino from their thrones, says Yankee Group’s Gardner, it may contribute to a gradual erosion of their market share over time.

In the short term, however, most companies are moving cautiously. “I want to pick a platform that’s going to be around for a long time,” says Len Pagon, president and CEO of technology consultancy Brulant. Salerno agrees: “A lot of companies are playing wait and see—they’re waiting for a success story.”

“Commodity mail is nothing new. It’s been out there for the past decade, and it has yet to take hold in corporate America,” says Meta’s Cain. Instead of switching mail systems, Cain recommends looking for ways of reducing costs in your existing mail setup: Consolidating servers, centralizing and managing storage more effectively, and adding Web mail access to eliminate client maintenance and training headaches.

Still, if you’re adding large numbers of new users to your e-mail system, if you’re expanding your mail system to groups of employees that haven’t had mail accounts, or if you’re a small company with a tight IT budget, you should take a look at low-cost mail alternatives. If nothing else, those systems are providing IBM and Microsoft with some much-needed competition. And they just might deliver what you need at a fraction of the cost.

Sidebar: Economical E-mail Servers

Anticipated benefit Provide basic e-mail services at lower cost than full-fledged e-mail systems.

Hurdles Lack of collaboration features. Switching costs. Reluctance to use smaller vendors.

Primary markets Large enterprises with “deskless” workers. Small and midsize businesses.

Estimated cost 50 cents to $2 per user per month.

Vendors
Gordano
www.gordano.com: GMS Mail for Unix and Windows platforms.

IBM/Lotus Software
www.lotus.com: Workplace messaging and Notes e-mail.

Ipswitch
www.ipswitch.com: IMail Server for Windows 2000 and Windows NT.

Microsoft
www.microsoft.com: Exchange messaging and collaboration.

Mirapoint
www.mirapoint.com: Message Server appliances.

Novell
www.novell.com: NetMail e-mail and calendaring system.

Oracle
www.oracle.com: Collaboration Suite messaging and collaboration system.

Sendmail
www.sendmail.com: Workforce Mail server.

Stalker Software
www.stalker.com: CommuniGate Pro mail server.

Sun
www.sun.com: Sun One Messaging Server corporate messaging platform.

Dylan Tweney is a freelance writer based near San Francisco. He can be reached at dft at tweney.com.

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