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3/27/2007
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Open Source E-Mail Could Gain On Microsoft's Exchange: Yankee Group

Around 23% of current Microsoft Exchange customers will switch to open source e-mail products within in the next year and a half, according to a forthcoming report from Yankee Group.

Around 23% of current Microsoft Exchange customers will leave Microsoft for open source e-mail products within in the next year and a half, according to a survey by research and consulting firm Yankee Group due out next month. If those surveyed actually follow through, it would represent a significant turnaround for a product whose market share is on the rise and relatively dominant in the e-mail market.

The executive summary of the report calls this finding a "stunner" and an "ominous portent for Microsoft."

However, despite the findings, even the report's author views the Exchange migration prediction with a critical eye that looks beyond the few percentage point margin of error. "What people say in the heat of the moment, they won't always carry through on," says Yankee analyst Laura DiDio, relating back to a 2001 survey that had found 38% of respondents saying they'd move completely away from Windows, something that simply hasn't happened. "Customers often go into these things blind."

The findings, part of a wide-ranging survey on servers completed by almost 1,000 IT managers and C-level executives from companies of all sizes, indicate that most of those who say they'll switch intend to do so because they believe open source e-mail and messaging products will cost less and be easier to manage. Microsoft declined comment on the executive summary and Exchange-related sections of the unreleased report, saying it will reserve comment for when Yankee Group releases the full report in April.

DiDio's report includes some quotes from companies that have moved to open source e-mail platforms from Exchange. One company in the Midwest, for example, migrated to Linux Qmail Toaster on CentOs in order to get more capacity and easier administration. "I now manage e-mail for four domains on a single server. When we ran Exchange, it was a chore to maintain a single domain," a company administrator is quoted as saying in the report. "We wouldn't switch back to Exchange for any amount of money."

Zimbra Collaboration Suite and Scalix are among the popular open source e-mail platforms; open source e-mail clients include Mozilla's Thunderbird and forthcoming versions of Qualcomm's Eudora. However, 65% of the Yankee survey respondents said they were using Exchange, so there's a lot of catching up to do. This is Yankee's second "Global Server Hardware and Server OS Survey"; the first didn't ask if people intended to leave Exchange for open source. However, the Radicati Group, a messaging research firm, has consistently reported and predicted Microsoft gains in market share over the last couple of years.

Though cost and manageability are the perceived benefits of open source e-mail packages, they may be trade-offs for functionality. For example, the newly released Exchange 2007 includes support for integrated voice mail and e-mail in-boxes, access to e-mail over the phone with voice prompts, and extensive security and access controls.

"Some say, 'We don't need all the functionality in Exchange,' but you're not going to find unified messaging or integrated security or voice access for just as cheap in Linux," DiDio says. "You may need three to five packages or build something customized" to get the kind of functionality you find in Exchange. DiDio cites a 5,000-end user New York City media company that will stick with Exchange because it estimates higher costs to support and make feature-ready an open source e-mail platform.

Even if Microsoft loses a significant portion of its existing Exchange customers to open source, there's a chance it could maintain or even grow its market share with new potential customers coming online all the time in the developing world and a continuing migration away from legacy systems from Novell and IBM. "The pie is not static," DiDio says.

People may well be fickle, the market size fluid, and Exchange feature-rich, but findings like these should surely show Microsoft that open source e-mail is a contender not to be taken lightly.

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