News Analysis

Weighing your SMB e-mail options

Sue Hildreth, Contributor

For eMusic, a 77-employee digital music distributor with offices in San Diego and New York, subscribing to a hosted Microsoft Exchange system solved its e-mail worries. The service gave the company the additional features that it wanted, such as scheduling and address books -- which its old UNIX system lacked -- without the extra hardware, software and administrative costs of an in-house implementation.

"We wanted to spend as little time as possible worrying about e-mail," said Scott Holcombe, eMusic's vice president of engineering. "We're a very linear organization, and it's not effective for us to take a full-time person and put him on e-mail."

eMusic, which subscribes to a hosted Exchange service from Andover, Mass.-based NaviSite Inc., is emblematic of the conundrum facing many small to midsized businesses: They want sophisticated e-mail features and functions -- from antivirus filters and archival capabilities to "whiteboarding" and wireless. But they don't want to break the budget or force key employees to spend half their time trouble-shooting the mail server or deciphering new government regulations on e-mail archiving.

Today e-mail is the primary way in which employees collaborate and communicate with customers and business partners. At the same time, few businesses would call e-mail "strategic." Like a phone system or office space, e-mail is infrastructure that a company requires, but not something that sets it apart from competitors or defines the company's business model.

Therefore, e-mail ought to be reliable, secure, easy to use and support all the communications features that employees need to do their jobs, but not any fancier than the needs of the business dictate.

So what factors should a small to midsized organization consider when selecting an e-mail system? The main considerations are cost, supportability and features, both for current and future needs.

Weighing e-mail options

Microsoft's Exchange 2000 and 2003 is the mainstream choice for e-mail, not only because it's from the company that effectively makes the operating system standard, but also because it's a fairly affordable and ubiquitously supported product. It also can be had either in-house or as a hosted option from any number of hosting companies. Microsoft Exchange Standard Edition is $700 for the server, plus $67 per user, according to list prices.

"Exchange is the one that continues to grow in market share. [Microsoft] Outlook is the most prevalent client out there," said Lee Benjamin, an analyst with San Francisco-based Ferris Research.

A full-featured, in-house implementation of an enterprise-level application can get expensive. IBM Lotus Domino, which Ferris Research says has 17% of the market share and trails only Exchange, comes in a small business version called Domino Express. The list price is $96 per user, with annual maintenance fees.

Novell GroupWise, third in market share with 11%, costs $130 per user. However, Novell also offers Small Business Suite 6.5, which includes GroupWise, NetWare networking software and other applications, for $475 per five new users.

Both Domino and GroupWise have lots of features and can be fairly complex. In Domino's case, businesses can create customized collaborative applications, a boon to a company that requires a unique workflow application. But this means you also need to have Domino development expertise on hand and be willing to pay the price for a more flexible and complicated environment.

"There's a potential cost issue with the Domino world, unless you're really going to use Domino for its application development," said Benjamin.

For a 100-user installation of Oracle's Collaboration Suite, a license costs $6,000. The license, however, does not include the cost of Outlook, which Oracle uses as the client through which users access their e-mail. Outlook retails for about $100 per user, though prices drop with a volume licensing plan. However, businesses will also need an Oracle-trained staffer because the Collaboration Suite sits on an Oracle database.

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On the opposite end of the scale are the open source e-mail systems, such as OpenGroupware.org or Eudora's WorldMail Server ($5/mailbox). Users should be wary that while having the flexibility associated with open source applications, Eudora lacks many of the more sophisticated capabilities of packages like Collaboration Suite, GroupWise, Exchange or Domino.

"People go with market leaders for interoperability, longevity and stability, and for integration with their applications," said Erica Rugullies, senior analyst for Cambridge, Mass.-based Forrester Research. "For instance, say you're working in a CRM application. Any time a contact e-mail address appears, you can click on it and it launches your e-mail application. If you're working in Eudora or something, you just don't have that level of interoperability."

Additionally, unless a company has an employee trained in Linux, or a support firm down the street, it may find support more difficult. "If you've got an IT department with one or two people, open source becomes a little more difficult," said Teney Takashashi, market analyst for the Palo Alto, Calif.-based Radicati Group. "And while there is a difference in price, it's not enormous, particularly for a small environment."

Beyond e-mail

Features, of course, are a primary consideration. Do you need a plain wrapper e-mail-only system, or will your employees require extras such as support for wireless messaging while on the road, file sharing, or "whiteboarding?" In the Windows world, for instance, Windows SharePoint Services makes it possible to create sites where employees can upload documents, make changes and otherwise collaborate on files. If you go the Lotus route, you can also take advantage of the Lotus Instant Messaging and Web Conferencing (formerly called Sametime) to do instant messaging, share a desktop or bring up a shared whiteboard.

Another potential benefit of going with a mainstream package -- like Exchange or Domino -- is the option of having your e-mail outsourced to a hosting company. The cost of hosted e-mail ranges from $10 to $20 per user per month, according to Marcel Nienhuis, a Radicati analyst who follows the hosted market. The advantage, he said, is plenty of tech support and the availability of more sophisticated features than a small business IT staff might be capable of offering by itself.

"A lot of these hosted providers provide a checklist of options, like e-mail archiving [for compliance with industry regulations], or antispam and antivirus software. Or, maybe you want to outfit top management with Blackberries. They can do that," he said.

Regardless of the package and delivery option you ultimately choose, Rugullies' advice is to think beyond messaging. "A business needs to consider what tools it needs for collaboration between employees, with trading partners, customers and buyers. So even if your immediate tactical need is for e-mail, there should be some thought also given to long-term collaboration needs."

Given that e-mail is such an integral part of daily work life, perhaps the most important consideration for any e-mail buying decision should be its reliability and peace of mind.

As eMusic's Holcombe noted about his decision to outsource, "There may be spam attacks, viruses, or other issues from time to time, but at least I don't have to hassle with it. [The provider] has got the staff and expertise to deal with those things."

Sue Hildreth is a freelance writer and editor based in Waltham, Mass. She can be reached at Sue.Hildreth@comcast.net.


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