Report: Gmail about one-third as expensive as hosted e-mail
What does it cost to host an e-mail account? It seems like a simple question, but a remarkable number of enterprises surveyed by Forrester had no idea of how to answer that question. A new report by the research company has taken a look under the hood of both in-house and commercial e-mail services, and put some numbers on the per-user costs associated with a variety of options. The surprise result was not so much that Google’s corporate services come out ahead, but rather how large a lead it has on every other option.
The title of the report, “Should Your e-mail Live In The Cloud? A Comparative Cost Analysis,” is actually somewhat misleading. The cloud implies a diffuse network of servers that hold partially redundant copies of information. Some of the services examined by the report don’t necessarily offer that sort of setup, although the report frequently refers to any off-site service as “the cloud.”
Semantics aside, Forrester surveyed over 50 IT workers at major enterprise companies to see how they handle e-mail, contacts, and calendaring services. They also discussed options and costs with 21 vendors of these services, and created some rough estimates of how much each portion of the various services cost.
One of the things they discovered is that the business community is largely unaware of the costs of running an e-mail account. Many of those surveyed gave guesses from $2 to $11 per user, although a detailed accounting showed that the costs were often several times that (Forrester came up with $25.18 per month, compared with $8.47 for Gmail). Part of the problem is that costs are often split among several cost centers, with software licenses part of a different department’s budget from the salaries of the people that support it. In some cases, the e-mail system was running on older hardware that had initially been bought for a different purpose and had been depreciated.
Despite the confusion, a lot of companies realize that e-mail has become expensive for two simple reasons: spam and malware. Nearly half of those surveyed were evaluating off-site solutions because e-mail costs had risen, while another 30 percent were performing the evaluation as part of an upgrade or service consolidation process. Fully 85 percent of these companies were leaning towards moving some of the services off-site.
The biggest reason for doing this seemed to be so that someone else could deal with staying on top of spam and malware; over half of those surveyed were planning on implementing a hybrid system where an external service filtered mail on its way into and/or out of the company’s internal servers. Reasons cited include the challenges of staying on top of the threats and up-to-date with the software, as well as the resource-intensive nature of combating mal-mail. Another 30 percent were leaning towards a complete outsourcing of the service, presumably in part because of these costs.
The author of the report calculated the monthly costs for the components of various systems, such as storage and client software. The biggest cost was clearly archiving, which is often legally required for a lot of positions. Beyond that, the software and filtering costs all came in at roughly 10 to 15 percent of the costs when they’re needed—off-site services, for example, eliminate separate purchases of server and filtering software, and lower staff costs in exchange for a monthly subscription. The overall conclusion is that any company with an employee count of under 15,000 would probably benefit from using off-site services.
The two examples of actual cloud services, Microsoft’s Exchange Online and Google Apps for Business, came out significantly ahead. Exchange Online provided significantly lower costs until somewhere above 30,000 seats, while Google Apps’ monthly cost consistently came in at half the cost of others, in part because its subscription cost is so low, and in part because the “client software” is a free web browser.
The author of the report cautions that there are a lot of variables to consider, such as how often the company adds and removes users, the frequency of large attachments, and the archiving requirements. Still, the results make it clear that Microsoft is now undercutting most of other services available, including those that rely on Exchange itself. But Google has managed to significantly undercut Microsoft. Although its solution is nowhere near as integrated as Exchange, an increasing percentage of the workforce is getting comfortable with managing their life and e-mail through a web browser.
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