Guest Post: Opportunity Knocks in Cloud Email
Back in the early days of Cloud applications a decade or so ago (it was generally called ASP back then), I was convinced that the most obvious and easy area for Cloud to colonise would be email. In a sense, that proved to be true, with the big webmail systems – Hotmail, Gmail, Yahoo!mail – gathering hundreds of millions of users. But they were free services. CRM got most of the publicity, because that got paid-for users – real companies putting down real dollars to use online CRM from Salesforce, Microsoft, and others.
Our latest guest post is by Philip Carnelly an Analyst with PAC. With over 25 years of experience as an industry analyst, software developer and project manager, Philip has become one of the best-known and most respected analysts in the sector. His work has covered business applications, BI, document management and KM, and latterly Philip has focused on Cloud, Software as a Service and application services. We had the pleasure to spend a morning with Philip- and here's what he thought- reposted from the PAC blog.
But more recently, take-up of paid-for cloud-based collaboration solutions – email++ so to speak – has been gathering pace across the globe, with some big-name (and large-scale) adoptions: fairly evenly split so far, it seems, between Google (Gmail and Google apps) and Microsoft (BPOS and Office 365). IBM’s LotusLive is also still in the mix. Drivers for adoption include flexibility, rising need to support mobile workers, desire to off-load the management of a non-core, non-differentiating system, and the opportunity to consolidate multiple systems into a single platform: all goals facilitated by Cloud-based solutions.
The latest such move here in the UK is Tata Steel Europe (TSE), which signed up Capgemini to help it transition to an Office 365 system over the coming months. No numbers were released, but a quick squiz at the annual report shows that TSE has some 34,000 employees, of which I’d guesstimate that around half are in the UK – and I reckon that the majority of staff would be covered by the new system. This echoes another high-profile deal last year where CSC helped Royal Mail move 28,000 employees onto BPOS.
But the opportunities for cloud-based email don’t begin and end with the big two and the giant SIs. We’ve recently met with two smallish but innovative UK-based companies who are doing very nicely out of email in the Cloud – both taking advantage of the huge momentum behind Exchange.
The first is Mimecast, which grew its business 66% last year (and 91% in the US – a tough nut to crack for a UK company). The company offers a pure-SaaS security and archive/retrieval service for Exchange, which works equally well with on-premise and Cloud-based Exchange servers (Office 365). This latter is a real plus point – companies can sort out their security and archive/retrieval policies, put those in the cloud first, and then migrate to cloud-based mailboxes as-and-when convenient – possibly in a number of stages. It can work with intermittent connectivity solutions – handy for mobile workers and executives. It’s also compatible with Blackberry, and iPhone is coming soon: key “must-haves” for knowledge-based companies in particular. UK customers include law firm Eversheds, De Beers and Bolton Wanderers FC.
The second company is Cobweb, which is exhibiting a similar growth trend to Mimecast: it is likely to double its installed base in the coming year. Cobweb reckons to be the “largest independent SaaS provider in Europe of Microsoft Exchange & SharePoint.” Customers range from small to large, and include Virgin Media, Thames Water and Bedfordshire Police. Cobweb offers multi-tenanted hosted Exchange solutions, linking up with Symantec (former MessageLabs) to provide the archive/retrieval and security side of things. This then, is a sort-of competitor to Office 365 – but as is the way with IT, Cobweb is also a strong partner to Microsoft. It is one of the few companies to truly exploit Exchange Hosting Edition. Its key challenge to growth right now seems to be recruiting sufficient partners to reach its potential audience but it must be careful to always show its value add/differentiation from vanilla Office 365.
What these two companies tell us is that while the Cloud is consolidating core infrastructure service provision, there’s plenty of scope for innovative solutions based around those core offerings. The growth of cloud-email is not limiting opportunities to simple resellers existing on the thin margins from commission-based sales of a vanilla service.
Small companies would be brave indeed – even foolish! – to go head to head with the US giants. But by bundling and pricing services in the right way there is plenty of scope remaining to carve out a lucrative and sizeable niche, both locally and in the US. This is particularly true in the middle market, where needs are more complex than simple mailbox provision, but skills and resources are more limited than in large enterprises.