Rising email server costs have spawned an entire industry -- mostly of channel companies willing to host, administer or manage customers' email.
That business dynamic has put channel companies in the awkward position of competing with their own vendor partners as well as managed service or Software as a Service providers for email server cost-cutting.
Even aside from managed or hosted email services, corporate email server costs -- and management of Microsoft Exchange networks in particular -- cause consistent pains in the budget for many user companies, experts acknowledge.
A study by The Radicati Group Inc. -- sponsored by Microsoft and available as a free download on Microsoft's site -- estimates that the total email server cost of ownership for Exchange systems is $137 per user in the first year, and an average of $107 per user per year for the first three years.
"Practically every customer I work with is, every two years or so, scrutinizing their email infrastructure to find ways to cut costs," said Matt Cain, collaboration and communications software analyst at Gartner Inc.
"In general they haven't found consistent cost savings in moving to a hosted email model, to date," Cain said. "That might be changing, but they're still looking for alternatives."
One relatively obscure option for cutting email server costs without significantly changing a customer's email infrastructure -- or moving value-added resellers (VARs) out of their traditional position as technology advocates and trusted advisors -- is PostPath, a Silicon Valley startup marketing a server that behaves like Exchange at a fraction of the cost.
"On a technical level, what we did was figure out the Exchange network protocols and implement those on the server," Duncan Greatwood, CEO of PostPath, said. "As far as the software is concerned -- whether it's Outlook or Active Directory or other clients -- it thinks it's talking to an Exchange server."
But, because the PostPath server uses a shared file system for email -- instead of a separate database for each end-user mailbox as Exchange does -- PostPath requires far less storage, far less I/O and far fewer server compute cycles, Greatwood said.
"PostPath appears, from what I've heard from potential customers, to look exactly like an Exchange server to client [software] and other Exchange servers," said Mark Leavitt, collaborative applications analyst at IDC. "The way they sniff the protocols being sent to and from an Exchange server and designing a product to emulate those is pretty amazing."
PostPath servers are priced at about half the installed price of Exchange, on average, Greatwood said. A perpetual license for one server is $4,000 for 60 seats, with price-per-seat declining in greater volume, he said.
The product is also designed to save email server costs by conserving computing resources -- using 1% of the I/O, 1% of the latency and 10% of the disk space of comparable Exchange implementation, Greatwood said. It also saves on server acquisition and upgrade costs by running on Linux servers with low administration and better price/performance ratios than Windows servers, he said.
Greatwood is pitching the product -- PostPath v.3, which shipped Monday -- to companies with as many as 100,000 end users. But, Cain said, he's much more likely to be successful in pitching smaller installs -- say, 10,000 offshore users a company can equip with a lower-cost implementation to augment 40,000 additional users in the United States.
"I have talked to several financial institutions that are happy to test it, but none have told me they've moved past the pilot phase," Cain said.
About 40 customers are using the product in a production environment at this point, Greatwood said, though few are willing to discuss it. Few resellers are willing to discuss it either, he said, for fear that Microsoft will object to the competition.
"They're all Microsoft partners, obviously, so they might want to stay in the background a little bit," he said.
William Lawyer, information systems coordinator for the city of Marshalltown, Iowa, on the other hand, is happy to talk about his PostPath servers, which replaced an increasingly expensive GroupWise installation for his growing population of 100 or so email users.
"It's a very stable, solid email system, and it doesn't cost an arm and a leg to set up," Lawyer said. "We had one issue when we installed it [in 2006] with the way it handled distribution lists, and they flew two techs in for two days at their expense to fix it."
The server runs on a "pretty ordinary workstation, a P5 running SATA hard drives and about 2 gigs of memory," Lawyer said.
It uses far less storage than a comparable GroupWise installation, and recovering individual emails -- even from backup systems or archives -- is fairly simple because users are searching for an individual file rather than the record in an individual Exchange mailbox database, he said.
"From what I understand, that's a lot more complicated with Exchange," Lawyer said. He added that the email server cost "$6,000 or $7,000" total, after having added 75 licenses to the initial 100 the city bought.
"It runs on a CentOS Linux platform, which is a pretty generic form of Linux, and that in itself keeps the expense down. You do have to have an Active Directory server somewhere, but most companies have one of those," Lawyer said. "And if you want to clone [the PostPath server] and put a satellite mail server in another part of town, they don't charge you for an additional server."
PostPath's low profile and virtual lack of a reseller channel will pose problems for the company and for its partners trying to increase sales, Cain said.
And, with the advent of universal communications (UC) technology from Microsoft and other companies uniting email, voice, fax and additional forms of communication, the need to integrate a mail server with other UC devices will pose another challenge, Leavitt said.
"There is a need and a desire out there for a lower-cost alternative to Exchange," Cain said. "This is an on-prem[ise] implementation, which is another alternative delivery model to hosted services. So their premise is relatively strong."
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