Regardless of the E-mail platform a company adopts, it generally wants to bring efficiencies to bear on its messaging system-not surprising, considering that the total direct and indirect costs of E-mail run between $1,600 and $2,700 per year per user, according to Creative Networks. The research firm also reports that most users are 18% more productive following an E-mail consolidation effort. And, says analyst Osterman, "Consolidating messaging systems should result in lower total cost of ownership because there's no need for gateways, there's reduced downtime, and there will be less time spent on activities like converting and resending E-mails."

Yet there can be downsides. DeComo, for instance, says that Hellmann had originally planned to roll out Notes to its users worldwide, but changed its mind after completing a Notes implementation in its German offices. The company decided that to run Notes across the board would be too expensive; it declined to give specifics, but DeComo says one cost factor is that "when Notes breaks, it takes a lot of expertise to fix it." Plus, in some of Hellmann's remote offices, there is no IT personnel, so the company embraced a two-tier standardization effort, with DeComo choosing the Novell Internet Messaging System for U.S. operations. NIMS is a basic Internet E-mail system designed to provide a low-cost answer for companies that want to provide simple connectivity. Because Notes also supports Internet standards, the U.S. and German divisions of the company can communicate flawlessly via E-mail.

And even companies that do want to standardize don't all want to undertake these efforts on their own. These days, businesses are adding E-mail to the ever-growing list of IT services that can be outsourced. "In many ways it's the perfect solution to the question of how to consolidate," says Dana Gardner, an analyst at the Aberdeen Group. "ISPs can offer systems that let you maintain one or more older, proprietary forms of E-mail as you move to a more purely Internet-based solution."

So far, this is just a glimmer in the eyes of service providers hungry for new value-added offerings. The Radicati Group found that less than 1% of major companies outsource their E-mail. But Gardner and others argue that outsourcing makes sense, particularly in light of the growing importance the Internet plays in virtually all IT functions. "If you outsource your E-mail and put your directory out there on the Internet, your suppliers and other partners can access it easily, and communication between your employees and their counterparts at other companies becomes vastly simpler," Gardner says.

United Airlines Inc. became a high-profile pioneer in the E-mail outsourcing field late last year, when it decided to replace its outdated E-mail systems with a single platform. It tapped USA.net to provide its Web E-mail in three phases: a system that would let pilots, flight attendants, and other employees who travel constantly check their E-mail from any remote location; a system for all internal employees; and, further out and still being discussed, a customer-service system that will let the airline reach out to its frequent-flier club participants, giving them their own Web-based E-mail addresses to receive news, information, and account status data.

USA.net recently signed a similar agreement with the car maker Saturn, in which it will provide E-mail services to dealers and then, if all goes well, to the company's internal staff.

"This is part of our overall strategy to embrace the Internet," says Nirup Krishnamurthy, managing director of United operations. "That will take several years, but an outsourced, Internet-based E-mail system that anyone can access from anyplace is an important early step."

John Street, CEO of USA.net, says that for E-mail outsourcing to win broad favor, vendors will have to provide security and, more important, extremely high levels of reliability. "We're at 99% today, which is higher than most internal systems," he says.

Thomas Pratt, president of CraneMorley Inc. a small professional-services firm in Long Beach, Calif., agrees that reliability is essential-which is why his firm canceled an E-mail outsourcing deal. "A year or so ago E-mail wasn't that critical to us, but now it's how we do business," he says. CraneMorley had outsourced its E-mail as a test project, planning to recommend the same approach to clients if all went well. It turned to Critical Path Software Inc. for the task, but Pratt says there were problems: E-mails were delayed, then replicated three or four times. Although the vendor addressed the problems, the experience made CraneMorley gun-shy. Pratt says he won't try outsourcing again until he can be assured of near-100% reliability.

So far, Krishnamurthy says, United is pleased with its experience. He won't say how much the airline is saving with this approach, but does say that it's costing less than it would to rearchitect United's existing system internally. The savings are nice, but Krishnamurthy says that advantage is overridden by an even more important goal of having "a pure Internet play for E-mail and other forms of collaboration."

Illustration by Doug Ross
Photo by Churchhill & Klehr

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