SAAS E-Mail from Google, Microsoft Proves Cost Effective for Up to 15K Seats - Page 2

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But lest he get too bullish, Schadler said he expects stronger mobile support for Gmail, as well as the long-awaited offline Gmail and Google calendar support.

Once a non-factor in the SAAS space, Microsoft entered the cloud messaging space in 2008 with Exchange Online Standard, which at an average cost of $8.66 per user, per month is double Google's rate. Costs escalate to $20.32 per person, per month once staffing, message archiving and client software is factored in.

Google Apps, anyway one looks at it, appear cheaper, which could prove attractive for cost-constrained companies in 2009.

Meanwhile, of the 53 firms Forrester surveyed, 36 are considering a change in their e-mail services, with seven planning to put their e-mail data in the servers of a cloud-based provider, such as Google, Microsoft, Cisco or Yahoo.

However, in a validation of Microsoft's software-plus-services model, 20 of those companies said a hybrid model looks attractive, keeping their mailbox servers in their corporate data center but running inbound e-mail spam and virus filtering as a cloud-based service to pare e-mail volume. Why? Primarily, lower costs, as one financial services firm told Schadler:

We moved message filtering to a hosted service because it's technically difficult and resource-intensive. The hosted service is head and shoulders above what we are able to produce ourselves from both a functional and cost perspective. But the true value has been limiting the volume of e-mails we've had to process.

If that model holds up across the industry in the coming years, that leaves plenty of room room for Google and Microsoft at the table for SAAS e-mail. Moreover, Schadler found that price transparency will drive e-mail costs down because vendors will continually vie to provide cost advantages to separate from the pack.
Other benefits of floating into the cloud include: the ability to rapidly provision new users; allocate IT professionals to more business-centric projects rather than tending to e-mail servers; no upgrade hassles for IT; and the cloud lets CFOs shift the financial burden from upfront capital expense to ongoing operating expense, a boon during the recession.