Software

Functional and financial benefits of cloud-based email

Ian Hardenburgh lists the most important benefits an organization could realize by moving email to the cloud.

In my post, "Why email is a good place to start when moving to the cloud," I discussed how difficult it can be to gauge what fragment of an on-premise data center should be moved to the cloud first. I then proceeded to suggest that e-mail might become an obvious choice. Financially speaking, I attributed this to the idea that email is extremely costly, and probably more importantly, with on-premise email it's difficult to fully realize the cost of all the resources needed to support such as system (a lack of financial transparency). On the other hand, I didn't do much to suggest exactly why the cloud might serve as better alternative.

Not unlike most cloud solutions, email shares many of the same holistic benefits that an on-demand architecture can offer. In my post, "Making a Business Case for the Cloud," I listed a number of these ubiquitous archetypes, such as a greater access to pooled CPU or virtual memory, as well as the ability to scale compute resources as needed. But e-mail is somewhat unique in the manner in which it is more of a support mechanism than anything. Essentially, outside of some exceptions, like message filtering, email administration is more of a tedious endeavor than an artfully mastered one. Contrarily though, email is arguably one of the most mission-critical pieces of software that can run within enterprise settings-often demanding 99.9% uptime, and warranting tactical attention and contingency planning. Some might think this notion works against the case for the cloud, but it's exactly the opposite, as backup or disaster recovery is not a new dilemma and needs to be addressed regardless of the deployment type. In respect to the cloud, backup, redundancy or even failover clusters can all occur in the cloud, perhaps through another service provider all together. Furthermore, a hybrid approach can be taken, where both cloud and on-premise deployments are used in conjunction with one another.

Although the functional benefits of cloud-based e-mail are countless, I see three major opportunities for organizations that take advantage of a cloud-based option.

Functional benefits

#1 No upgrading, add-on installation, or patching

As suggested above, there are a number of benefits that the cloud can offer, and the elimination of having to upgrade, install add-ons, or patch software could definitely be noted as some of the more obvious ones. Nevertheless, and again-as suggested above, e-mail is a distinct case, because it often requires perpetual uptime. Removing some of the tasks that often necessitate blackouts and sometimes cause unforeseen issues like crashes, you jettison some of the most problematic issues that plague email administrators. Not to say that there aren't blackouts with cloud e-mail services-there most certainly are. However, the responsibility is emplaced upon the service provider, who will most likely sandbox or segment separate instances of their cloud, in order to test whatever they are performing (upgrade, installation of new feature, patch, etc.). That way, in the case of failure, only a small portion of the service's user population is affected. Of course, something similar can be done from within a private data center when multiple e-mail servers are used, but to what cost?

#2 More operative use of IT staff

The goal behind any IT department should be to focus as much as possible on projects that add new value to the business they serve. Email is a necessary evil, but supporting what has already been provisioned isn't exactly a value-adding venture. Therefore, by taking away the hardware element to email, amongst many of the more mundane undertakings on the software side of things (i.e., load balancing), an organization can make more operative use of their staff by assigning them that value-adding work I speak of.

#3 Scalable and well-distributed resources

Once more, the ability to scale and distribute compute resources up-and-down is nothing unordinary when it comes to cloud computing. However, when it comes to such a resource intensive system like email, the ability to scale and evenly distribute resources across hundreds of thousands of users becomes that much more exaggerated. This is especially the case for organizations like universities that don't have the capital to provide for the vast amount of users-not to mention changeover. For most email cloud providers, like Google with its Gmail product, the allocation of users based upon the volatility of a user population is a cinch, as resources are automatically dispensed by the provider itself.

Financial benefits

#1 Turn a variable expense into fixed one

Ask any accountant, the ability to realize a fixed expense is much easier than planning for a variable one.  As discussed in my last post, the ability to gain financial transparency can be reason alone to move your email to the cloud. Furthermore, by eliminating the debt liability that is email, or the on-premise assets that are a condition of it, a company can free up capital on their balance sheet, and thus, spread the expense over time. This especially holds implications for a company that is cash strapped, or wishes to invest the difference between an upfront expense and a deferred one into new revenue streams. For an IT department, it can easily free up necessary space under a tight annual budget.

#2 More cost-effective use of IT staff

Think I'm starting to sound redundant here? Are you saying to yourself, "didn't he account for this under the functional benefits of moving e-mail to the cloud above?" Well, think again, because when it comes to IT, there are always two sides to the coin. One of those sides being the idea that an organization should reduce the operating expenses and overhead as much as possible before any tolerable level of product or service degradation can be noticed. By right-sourcing or reassigning job functions from rather banal ones, an organization can get much more bang for their buck out of an employee. In return, an employee can receive the satisfaction of knowing that they are gainfully employed, and thus, earn a much nobler sense of job security. Most importantly, he/she will have a greater sense of gratification knowing that they are doing something more worthwhile than patching or upgrading an old email system.

#3 Again, scalable and well-distributed resources

As I said already, not knowing where the bottom-line cost of email stands can wreak havoc on an organization's cash flow. By moving to a subscription or pay-as-you-go model, most of the guesswork is eliminated. Yes, it's hard to understand how many employees will need email from one given month to another, or what level of access for that matter, but with the ability to scale and distribute resources, one is able to set thresholds or resource caps to prevent the cost of email from going over budget. Even if caps aren't set, by paying for email like you would pay for a utility, an enterprise gains a far greater level of consistency and predictability when it comes to month-over-month outlays.

About

Ian is a manager of business intelligence/analytics for a small cap NYSE traded energy company. He also freelance writes about business and technology, as well as consults SMBs upon Internet marketing strategy.

5 comments
Fairbs
Fairbs

I would say the size of the company would be important in choosing the cloud for email. A company of say less than 100 with a small profit margin would benefit from avoiding the fixed cost of getting an email system in place. For a large company, they would have the resources to get a system up and running and it would be just another server in the data center. In either case you still have the time costs for creating accounts, resetting pws, user questions, ... As for the financial, an email server is a semi fixed cost which over time goes to 0. With the cloud, you pay monthly so it's predictable, but still costly and yet another bill to pay. If I were making the decision, I would look at total costs long term (and short), size of company, and the sensitivity of the emails themselves (i.e. patient information v. email in retail environment).

Techie_in_TX
Techie_in_TX

We've had lots of complaints from users about slow performance since we moved our email to the cloud. Seems to have affected admins who are delegates for their managers especially hard. We are also not looking forward to having to re-create OST files for those 20G (yes, G not M) mailboxes when troubleshooting or re-imaging machines.

Deadly Ernest
Deadly Ernest

hard facts or evidence to show any real benefit to anyone but the cloud service provider shareholders.

GSG
GSG

I read a lot of hype about the cloud touting how great it is for email, storage, etc..., but no one talks about the elephant in the room. If your data is all on the cloud, or even just your email, what happens when you can't get to the internet? If you have most of your data and operations in the ephemeral cloud, and you can't get to the internet, operations cease. Our internal networks here, are much more stable than our ISP. We have a couple of products that are .asp models, and when the ISP has issues, they are unusable. A good example is the tornado that went through our town in February. We were on generator for hours, and we could still work and take care of our patients, but we didn't have internet access for a day until the ISP had their systems repaired. If our apps, storage, email, were cloud based, then the historical patient data would have been inaccessible. Instead, we had our internal email for house-wide status updates, our clinical systems worked perfectly, and had only minor issues with the .asp applications. No, I'm not convinced yet that the cloud is the way to go for anything other than offsite data backup. You never want to set yourself up where a single point of failure can take your business off-line. The cloud seems to have many single points of failure.

stnwall
stnwall

Every time I have done the analysis of cloud vs. on-prem, the cloud has come out more expensive if you already have the infrastructure in place. The math probably works if you are talking about a new email platform but maintenance on the old one, which icludes upgrades, always seems to be a fraction of what the long term cost of cloud would be. The internal cost is very predictable if you have a stable employee population and I have never seen the utilization as being very volatile either. Just not convinced by your arguments based on my experience.