Asked if he is concerned about possible outages, disruptions and bandwidth issues with these online services, Sezer said he has received assurances from Microsoft in this regard, noting that this would be an that issue regardless of whether or not Microsoft was hosting it. "The basic question for me is whether I can run this infrastructure better than Microsoft can. Am I going to be able to know their product better than them? I might, but I'm hoping that's not the case," he said. "Time will tell, but my core business is not running a data center, and letting someone else do this frees up resources that can be used elsewhere. Is there a risk? Yes.""We estimate that a 1,000-employee company with moderate e-mail usage that hosts their e-mail may incur an additional $3,000 or more per month just for bandwidth charges for their users and which is not included in the pricing of Microsoft's services," McCall said. Microsoft will need to learn Research in Motion's recent lesson: A network service interruption can occur at any time, and trusting companies putting all of their eggs in the hosted services basket can run the risk of significant productivity losses when, not if, e-mail goes down, he said. But for Sezer, letting Microsoft handle those services allows him to put those resources into developing new capabilities and differentiated solutions. Asked if Microsoft has provided guarantees against e-mail loss and any legal and regulatory issues that could arise from that, Sezer said, "We had a substantial legal engagement with Microsoft upfront, which was an extensive, difficult undertaking." This issue was addressed in a recent research report about hosted e-mail by Gartner analyst Matthew Cain, who said the market for e-mail hosting services is poised for explosive growth in the next few years, with 20 percent of enterprise market e-mail seats delivered via software as a service and similar models by 2012. But there are four areas of common misunderstanding in hosted e-mail relationships: legal, security and integration, contract startup and cessation, and operations, he said. Cain recommended that customers clarify the legal aspects before signing the contract, including how discovery and preservation requests will be processed.
Keith McCall, chief technology officer of Azaleos and a former Microsoft executive, said there are risks, warning that hosting is a costly proposition for companies of all sizes, but especially for those with more than 200 employees.