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Email is absolutely critical in making users productive: for example, a February 2008 survey conducted by Osterman Research found that 93% of email users consider email to be important or critical in helping them to get their work done.
However, most decision makers are not aware of the true cost of providing email functionality to their users. Many underestimate these costs by a significant margin, and most are not confident that they can accurately determine them anyway. This leads to two significant and expensive problems:
- When the time comes for an infrastructure refresh, an inability to accurately determine the true cost of ownership for completing alternatives makes it more difficult to make the right choice among those alternatives.
- Organizations may be overpaying for providing email services by not considering hosted or other alternatives to their on-premise infrastructure.
What decision makers should do, then, is a) accurately determine their cost of providing email services to their users, and b) determine the specific requirements of their user base. Doing so will allow an organization to determine whether or not email can be provided at lower cost, freeing up monetary and labor resources for other initiatives.
This white paper, sponsored by Mailtrust, presents the key issues that decision makers need to consider when evaluating the cost of ownership for their email infrastructure, and it provides information on Mailtrust’s hosted and hybrid messaging offerings.
Osterman Research has found in several studies over the past several years that many IT decision makers do not know the full cost of providing email services to users in their organizations. For example, in a study that Osterman Research conducted in Summer 2007, we found that only one out of 10 IT decision makers and influencers were very confident in their ability to accurately estimate the cost of providing email services. Further, Osterman Research has found that many decision makers underestimate the cost of providing email services. For example, an Osterman Research study of small-to midsized businesses (21 to 1,000 email users) found that the median cost of providing email capabilities was estimated to be $11 per seat per month, significantly below the actual cost of providing messaging as shown later in this white paper.
For the day-to-day operation of an email system, knowing the cost of providing that service really isn’t all that important. However, when senior managers must make a decision about upgrading from one system to another, or if they are seeking to cut costs from critical parts of the messaging infrastructure, then understanding the true cost of messaging becomes vitally important. It’s an exercise that all IT managers, CIOs, CFOs and others should undertake periodically.
Deploying and managing an email system requires a significant investment in a variety of hardware, software and IT labor resources:
- Hardware- Email servers, anti-spam servers, anti-virus servers, routers, load balancers, monitors and storage systems.
- Software- Operating systems, email server software, anti-spam software, anti-virus software, monitoring software and anti-spyware software.
- Labor- IT staffers required to deploy and maintain hardware and software or appliances, including upgrading hardware and software, applying patches, resolving downtime incidents, dealing with users issues, training, etc.
- Other costs- There can be a variety of other costs associated with managing an email system, including the cost of floor space and the increasingly significant costs associated with power and cooling for on-premise servers and other hardware.
The backend costs for deploying and managing a Microsoft Exchange system for a 50- seat, 100-seat and 200-seat environment are shown in the following tables. These figures do not include client costs, since these will be required for an on-premise or hosted solution and do not impact the decision for whether or not to outsource email services.
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