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The increasing complexity that comes from the growth of email has sparked the rise of hosted email solutions that solve the challenges faced by development teams charged with managing costs. The Q4 2010 Forrsights Budget and Tracker Priorities Survey found that 59% of Global IT executives and technology decision makers said that growing overall company revenue was their top priority while another 54% said lowering the rms operating expenses was their priority. To that end, 45% said that they would actively pursue the usage of a cloud based infrastructure to aid in those efforts.
However, the trend to move towards the cloud does not end with the enterprise. While some enterprise buyers are holding out due to the sheer size and complexity of their systems, the desire for on-demand services that are exible and scalable based on need has found signicant traction among mid-market buyers, particularly start-ups and SMBs who build systems that are cloud-ready. 62% of SMBs have embraced cloud services, up 48% from the rst half of 2012. That number is expected to jump to 73% by early 2013, but although their IT budgets are on the rise, only 26% plan to hire IT staff a decrease of 31% a year ago.
Email operations is integral to the success of our business, but its not an area in which we want to dedicate an extraordinary amount of time, money and resources. My previous experience with the challenges of managing in-house servers and deliverability highlighted the need to employ outsourced mail services focused solely on the delivery of our messages right from the start. Craig Bloem, Founder and CEO, FreeLogoServices.com
Were more effective than beforeIt didnt make sense to hire ten email developer gurus, or to build a datacenter. Email is just a building block that needs to be in place. I hadnt yet built out a complex email system, but now Ive got one, and its cheapreduced our teams cognitive load and made it easier to scale hardware...Were a higher-functioning company as a result. Loren Norman, Lead developer at Scoutmob
Today, IT professionals must analyze the pros and cons of building and maintaining their own systems versus outsourcing some or all of their email operations to a third party provider.
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Email needs to be protected. Email can easily be spoofed which can be a constant battle for developers and marketers who struggle to protect their brand by false claims in malicious email and other criminal activity. Companies need access to tools and services that will help protect their name, brand and reputation. As a result, email authentication through SPF, DKIM and DMARC now becomes imperative to prove and protect your identity. By doing so, ISPs can better identify spammers and prevent malicious email from invading consumer inboxes and destroying trust in your brand.
Email needs to be responsive. As with email security, rapid deployment of upgrades and migrations are happening at a faster clip than in the past. Development has been charged with designing and executing processes that provide access to the latest and greatest as quickly as possible. Additionally, email ties back to a number of operational functions, particularly in transactional email where customers expect rapid communications in response to an action they complete. As these communications become more pervasive and expansive in quantity and nature, email must respond to marketplace changes and continue to deliver on customer expectations despite internal challenges.
Email experts are needed. With these expanding roles, specializations are emerging in the area of delivery, analysis and security to handle the growing complexities of the email landscape. Furthermore, the time that is needed to handle email operations has grown considerably. Organizations that do not have established email experts on staff pull on their own engineering and development resources to ll the gap. As a result, more time is spent managing email and less time is spent on product development and business objectives.
Email costs are changing. Due to the above factors, the cost of maintaining in-house systems has skyrocketed causing developers to seek out hybrid or SasS solutions to cut costs. By outsourcing some or all of their email operations, organizations can see signicant savings, thereby increasing market demand and creating an interesting niche for smart companies that ll this need. And while larger organizations usually opt to maintain greater control of their internal systems using more traditional methods, SMBs and startups who are laser focused on rapid protability opt for outsourced solutions that wont tax their internal resources.
Cloud email proved to be faster and more cost effective than building an on-premise solution.
Cyfe launched in January 2012 and quickly acquired over 5,000 active users. Their rapid growth exposed some challenges with their current email system which they needed to remedy quickly. They decided to build their own email system, but in order to do so, Cyfe would have to assign key resources away from product development and direct them towards email management, not to mention the months it would take to actually build their own system. As a result, they put their build plans on hold to explore cloud based email solutions. When they compared the cost of using a third party provider to building their own on-premise infrastructure, they found that building would cost them twice as much as using a cloud based provider including the countless man hours in maintenance and loss of productivity amongst their small engineering team. They realized what they really needed was an outsourced solution that could easily scale with their business, do all the heavy lifting and allow them to focus on enhancing their web application. By employing SendGrids cloud based email platform, Cyfe was able to integrate in a matter of hours and provide an email infrastructure that is fully scalable and operates independently without taxing their internal resources.
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James Hay, Cloud Adoption Trends 2012, http://www.slideshare.net/Fasthosts/cloud-adoption-trends-2012 (May 17, 2012) Spiceworks, The Spiceworks Cloud Barometer Report, http://pages.spiceworks.com/rs/spiceworksinc/images/Spiceworks-Cloud-Barometer-Report.pdf (July 2012)
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Thor Oswald, Dan Muse. How Secure Is the Cloud? IT Pros Speak Up, http://www.cio.com/article/703064/How_Secure_Is_the_Cloud_IT_Pros_Speak_Up (March 28, 2012)
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For SMBs, cloud adoption has fewer barriers. These businesses cite simple installation, minimal conguration, on-demand everywhere availability, and integrated web-based data backup. Additionally, total cost of ownership, and automated feature and functionality upgrades make cloud applications favored options for this group. In fact, 38% of SMBs have improved operational efciency and 39% improved employee productivity with cloud adoption. To that end, cloud based email provides the following advantages: Better cost control. Cloud based services offer pay-as-you-go models that allow you to better manage costs and ramp up based on actual need rather than projected need. Therefore, instead of incurring the upfront capital expense of purchasing hardware and software, not to mention nancing said equipment, you can simply pay for what you need now and increase your usage as your email needs expand. In this way, companies can better track their ongoing operational expenses and realize savings almost immediately. Rapid implementation and maintenance. Hosted email provides the unique ability to initiate upgrades and congure software from a central point that can be deployed system wide. This eliminates the usual headaches faced by developers trying to update software and protect their networks from spam, viruses and other malicious email. Additionally, migrations become easier when using a central access point thereby saving an extraordinary amount of time and development resources. Access to email deliverability experts. When outsourcing your email to a reputable provider, you get a team of individuals who are wholly focused on maintaining and supporting your email infrastructure. This type of expertise would be hard to nd and expensive to hire for organizations trying to duplicate the knowledge base found in external, focused teams of specialists. Greater exibility. Cloud based service models provide plenty of room for steady or rapid growth. Companies who do not want to be hampered by the inherent limitations of maintaining and enhancing their own systems can turn to cloud based providers for nimbleness and exibility. This is especially important for organizations that need to respond rapidly to marketplace changes. Better use of internal expertise. By outsourcing email operations, development teams can focus on building better products and protecting their networks, rather than worrying about email infrastructure and email deliverability issues. This leads to increased productivity and output built around the strategic objectives of the business, and higher morale amongst employees who want to work on impactful projects. Drive new revenue. Outsourcing to a cloud based provider enables companies to think outside of their own box. No longer hampered by long development cycles, they can leverage their vendors in new ways to simplify processes, allowing developers to design new services that can drive revenue for the business. Whitelabeling is a common tactic, but with exible APIs, extended integration provides endless possibilities. Real-time analytics. Cloud based services can provide a level of business intelligence that would be hard to glean from internal reports. Oftentimes, systems are built without foresight into the extraction and interpretation of data particularly from a user friendly perspective. Cloud based solutions will work to perfect their analytical tools to showcase the value you are receiving from their platform. They not only provide canned reports, but also allow for easy customization to suit your business needs. SendGrids flexible APIs provided the tools to integrate our two platforms in a way that protected our customers private information and ensured maximum email handling. With SendGrid, we were able to bring our product enhancements to market faster, and achieve our goal of creating a tool that helps partners and sponsors maximize ROI. - David Stys, SVP of Product Development, Turnkey
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CloudTweaks, SaaS Business Apps Drive SMB Cloud Computing Adoption (May 2, 2012) Dell and ThechAisle, The SMB Cloud Application Trends Survey, (March 2012)
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Outsourcing provided Pinterest with the space to focus on strategic plans, rather than day-to-day email management.
Recently named by Fortune Magazine as one of the fastest growing websites of all time, Pinterest relies on email as a critical communication tool to drive user engagement. As a result of their rapid growth, Pinterests small team of engineers were left with the task of managing the ow of millions of emails per month through their systems, and the deliverability challenges that accompany high volume sending. While their engineers were capable of tracking down these issues, their mandate was to strategically grow their operational systems not manage the day-to-day ow of email. They needed a solution that could focus on deliverability while they continued to improve the value of their app. As a result, they outsourced their email operations to SendGrid, a cloud based email infrastructure platform. Today, their engineering team no longer worries about email delivery. Instead, they rely on SendGrids email expertise to monitor their deliverability and resolve delivery failures with their limited involvement.
A Comparative Snapshot
When deciding whether to build your own on-premise email infrastructure versus outsourcing it to a third-party provider, its important to identify the resources required to implement each solution. While there are many elements of setting up an email server, the checklist below provides an overview of the differences between options. By focusing on this critical component of any email program the delivery of email messages to your subscribers you can make informed decisions on how each solution will impact your stafng resources, development timelines and bottom line.
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Summary
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