Should I Go to the Cloud?

Let’s face it, the cloud is hot. More and more organizations are considering a cloud-based (hosted) email solution for the first time as an alternative to their current on-premise systems. In fact, leading industry analysts predict that cloud-based email will grow from just about one percent today to 20 percent by 2012. And Chris Caposella, senior vice president at Microsoft, expects that 50 percent of all Exchange mailboxes will be hosted via Exchange Online within five years.

What are some of the biggest drivers behind this trend?

1. It’s cheaper! Most IT departments spend at least 50 percent of their budget on salaries, and up to 70 percent of IT staff time is spent on maintenance, according to analysts. In-house IT specialists might cost companies $100 per month, per employee for IT management. A hosted service, on the other hand, may charge only half that amount for a suite of managed email services along with 24–7–365 monitoring and higher uptime than many companies can achieve with on-premise staff and systems.
2. Hosted providers can do it better. Hosting vendors store the information on their own servers and manage the entire system for you, drastically reducing the time and energy you spend on keeping your email up and running. A growing number of companies just want email isolated as an enterprise-class cloud service, with all the modern archiving, compliance and spam/virus protection features they require along with a scalable infrastructure their IT staff never has to worry about or manage.
3. The cloud has gone mainstream. Primed for enormous growth and widespread adoption, recent research indicates that 84 percent of small and mid-size companies and 69 percent of large companies are willing to consider, currently reviewing or already using software-as-service (SaaS) solutions. A big part of this growth is a result of the increase in broadband Internet access, but another key factor is that cloud email vendors are making better, simpler and more affordable software that doesn’t require a technical degree from MIT to setup or use. And now that Microsoft and Google have ramped up their cloud-based solutions, it’s also more widely accepted as a safe alternative to on-premise solutions.
4. Pay as you go. As budgets tighten in the weak economy, more and more companies are gravitating toward cloud-based email services. With no technology to maintain, total cost of ownership is five to 10 times less than installed software, so it’s easier to budget and scale as you add and subtract users. In addition, cloud-based solutions do not require ongoing maintenance, time or complex upgrades, so what was once a capital expense becomes a more balance sheet-friendly operating expense.

As critical as email is to most companies, it is important to remember that managing your email infrastructure (i.e. mail servers) is not usually directly related to the products or services you sell. You have to focus on growing your bottom line, not on making sure your email is working, which can be both time consuming and expensive. The good news is that a variety of hosted services are now available – services that were once only reserved for the biggest corporations.

But, the Cloud's Not for Everyone

Despite all this optimism for the cloud, we know there are plenty of situations where it may not make sense to move your email there. Some data and email may need to remain on-premise, behind a firewall for legal or regulatory considerations (e.g., HIPAA). Also, other on-premise applications (e.g., CRM solutions) may be tightly integrated with your on-premise email platform, so moving your email to the cloud could pose challenges if you are hoping to continue coupling these solutions. Finally, many organizations may not have fully capitalized their existing on-premise email platforms (i.e., they are already invested in it) and may not be able to easily or practically abandon it.