Rackspace Email & Apps Blog

We’ve been arguing for a while now on our blog that for SMBs (small to medium sized businesses), moving your email to the cloud is a good idea. It saves money, helps make IT staff more productive, and increases reliability in general for the businesses that drive our economy. But we want to help you move your email to the cloud, so we would think that, right?

Well Gartner agrees: the cost savings of email in the cloud are very real. In a presentation this week at the Gartner Symposium IT Expo, analysts Matthew Cain and James Lundy argue that by 2012, cloud email will cost over 50% less than the in-house alternative. And for storage costs, the savings will be even more dramatic: cost in the cloud is predicted to be 85% less than in-house.

Source: ZDNet

For small businesses who are leading the charge toward 20% of all email seats being in the cloud by 2012, this is huge. Better email cheaper. Simple, and powerful, as that.

With the smell of freshly brewed coffee in the air, I open up Microsoft Outlook and head straight to my calendar to start scheduling meetings. Being a technical project manager, part of my job includes scheduling meetings—and in any given session, I easily schedule 5+ meetings for 15+ folks.

When scheduling a meeting, it is, of course, important to find a time when everyone can meet. Microsoft Exchange customers are already familiar with using Outlook to schedule a meeting based on others’ schedules. But, did you know that Rackspace Email customers can use Outlook to do that, too?

With Sync for Outlook, I can easily sync my co-workers’ 65+ calendars, adding them to my Outlook. And because I use Automatic Sync, I don’t even need to push a button—it automatically syncs the data in the background, so I can go on with my work. Since my Outlook calendar data is kept up-to-date, I’m always ready whenever I need to schedule a meeting that will work for everyone.

We are always interested in talking to IT professionals about their business IT needs and how they provide solutions for their business users. We want to learn how we can continue to develop valuable services that are relevant to the needs of businesses today and the IT staffs that support them. That’s why, during the week of October 19-23, I will be at the Gartner Symposium IT Expo in Orlando, FL and SpiceWorld 2009 in Austin, TX (Hosted by Spiceworks) representing Rackspace Email & Apps.

Are you going to be there, too? Let me know in the comments, email me at tom.thaddeus [at] rackspace.com or stop by and see me when you’re there (that’s me in that picture above). I want to talk to you.

As companies continue to need to lay off workers, the workload for the remaining lucky few has increased markedly. The recession is forcing us all to work smarter and faster, and IT is the natural place for businesses to look for ways to make that happen. It’s no surprise then that average hours worked per week for IT professionals are on the rise and that lives outside of work are suffering. According to a recent poll conducted by The IT Job Board, a full two-thirds of IT professionals feel that these long hours negatively affect their personal lives. Oh, and on the job performance is going down, too (34% of respondents believe that their productivity at work had decreased due to long hours).

In light of this gloomy situation, why not cut costs and increase morale? If you aren’t already, maybe it’s time to look at hosting for your business. If you are currently hosting with us, why not tell a friend what a winning proposition it is to free up precious IT hours to focus on core business objectives. Email Hosting saves significant money while freeing up IT staff to focus on core business problems, not routine maintenance, server upgrades, and service patch installs. We take care of all that, leaving tech-savvy employees to add value where it makes the biggest impact on the business. And, of course, if they can make it to that 6pm Happy Hour, we’ll all be the better for it.

Our CTO, Bill Boebel, is pretty damn busy. He runs from meeting to meeting with a laptop, a notepad, pens and his BlackBerry. Yet, somehow, his thoughts are rarely all in one place (shocking). So for Bill, and the millions of other super-busy people, we’ve created Notes!

Notes is a new app now included with our Rackspace Webmail client. It’s the perfect place to store a new idea, a meeting summary or just some quick thoughts. Combine Notes with our Webmail, Calendar, Tasks and Contacts and you have a full-featured, productivity suite!

Notes is easy to find and even easier to use. Rackspace Email customers can log-in to their Webmail account and find Notes under the Notes tab. A welcome message and instructions await you there…

Using Notes with Sync for BlackBerry. Now it gets Interesting…
One of the best features of our new Notes app is actually not found in Notes at all. It’s part of our Sync for BlackBerry tool; which allows Bill to create, edit and access Webmail Notes, while he’s on the go, from his mobile. Here’s how it works:

Steven Ng, Vice President of Professional Services for Acumetrics came to Rackspace after a hard drive failure took their email down for a week and reallocated Steven’s time from billable work to fixing email. Due to a failed backup, they also lost a week’s worth of email. By outsourcing their email to Rackspace, they now have dedicated support when they have email issues from our team of email experts.

According to Steven, “We lost enough time and money from one outage to pay for Rackspace hosting service for a year.” When they experienced a recent outage, they reviewed our resolution report and determined, “that issue would have taken us hours to diagnose and even longer to fix.” Outsourcing allows Steven to focus on growing their business while we worry about making sure his email is operational.

According to a report by Osterman Research there’s a 72% chance you’ll experience an unplanned email outage this year per. With each outage, businesses can expect an average of 62 hours of downtime. The report also shows that 41% of unplanned outages are due to technological issues: software configuration errors, outdated drives, or HVAC issues. Hardware failures alone accounted for over a quarter of unplanned outages. Even a short outage can have long-term consequence, like missing important customer communication, total loss of email data, and lost productivity.

With all the things that can go wrong with email, putting it in the hands of email experts makes sense. Rackspace’s email infrastructure is built on a redundant, clustered server environment with automatic failover measures.

Last week, IBM announced their move to offer high volume cloud based email services. The offer, called LotusLive, is intended to counter the move to a new set of online offers like Google Apps, and our own Rackspace Email service. IBM is the latest in a long line of traditional enterprise software companies feeling the impacts of new SaaS models. And, like many of those companies, they intend to compete.

They need to. We currently host the email of several hundred thousand businesses and Google is using its free edition to get millions of businesses. IBM makes their money by selling software and service to enterprises. If those same businesses start buying turnkey services online, there is a big hole in the IBM business model.

But, based on history, IBM faces long odds. Since the dawn of the SaaS model, there has been literally no major ISV that has become a power in the SaaS space. Siebel, SAP, Microsoft, Intuit, Oracle, and many more large ISVs have made big splashes about online offers only to retreat (or admit defeat by buying major competitors, like Intuit’s acquisition of Mint.com).

Now, some, like Larry Ellison, will say, this is a tiny market, so who cares? So far, he is right. There is only one billion dollar company in the SaaS space (Salesforce.com). But, if history is not headed in this direction, why try at all? IBM clearly is admitting that the idea of cloud based software is the future. So now they have to compete. Will they meet with the same poor results? Here are some thoughts on why traditional ISVs have failed at this model and some thoughts on how they apply to IBM:

1. Skills gaps. SaaS is not the same as building and shipping code. Multi-tenancy, scaling, customer support, uptime reporting and community outreach are all integral parts of a SaaS business. This does not come naturally from innovation oriented, build it and ship it companies. IBM likely realized this when they bought Outblaze to drive the core of the new offer. While small and primarily a reseller enabler, Outblaze does give IBM a core set of SaaS oriented skills and mindset. The real risk is how well this mentality will be integrated? How long will this talent remain? A lot of it depends on the other risks.
2. Sales compensation. Sadly, sales comp is much of what makes the business world move. Every top ISV is built on the lump sum, perpetual sale. How you turn an organization into a machine to sell recurring revenue is a massive challenge. There is no place more ingrained in the big deal than IBM. So, barring a wholesale change to the IBM model, the idea that the massive IBM salesforce will be pitching this offer is a pipe dream.
3. Cannabilization. The NotesLive offer flat out competes with the core IBM on premise software plus services model. Combined with a compensation conflict, this is the most critical challenge facing a company like IBM. And, looking at their site, the whole effort seems to be a mass market attempt to generate leads for a salesforce. Just try to buy online. My hunch is the goal is not to sell $3/month accounts, but much larger solutions.
4. Enterprise vs. SMB. Related to the last point is the true commitment any of these companies have for the SMB market. SMBs are driving the move to SaaS, just as they drive almost any major shift in technology. SMBs are willing to compromise and sacrifice – a critical requirement to embrace the productized model. They also want a low price. The low end iNotes offer, from the looks of it, is not meant to sell, but generate interest. Look at this price sheet:
   
   The set of compromises runs counter to our $1/month offer or Googles $50/year offer. Those are flagship products with full feature sets (calendaring, contacts, large storage, etc.) Given IBMs enterprise focused history, I am curious to see how far their commitment goes.

You can never take a behemoth like IBM coming into your market lightly. Believe me, we do not. However, in many ways their entrance is welcome. They have a voice much louder than ours and they are declaring openly that you should not run your own mail servers. Hallelujah! But, could they be the first major ISV to get it right in the SaaS world. They are as a good a candidate as any. But, for our money, those that are focused on this from the ground up are the real threats. For now, in the email and apps market, that is Google. Stay tuned for some thoughts on that battle.

There’s nothing more non-productive than digging through emails looking for that all-important link that someone sent you a while back, when you actually need it now. That’s what Bookmarks are for, right? But what if you’re not at your own computer, or you’re like me and you use several computers with multiple browsers? As it turns out, Rackspace Email solves this problem. If you have a Rackspace Email account and you use the Webmail interface, you’re all set. Just use Tasks! Tasks?

Yes, within Webmail there’s a tab called Tasks which allows you to manage multiple lists of items you want to track, ostensibly for things like groceries, books you intend to read, to-do items, or episodes of the West Wing you somehow missed. Personally I created a list called “My Bookmarks” where I store items like “#Rackspace Email & Apps – http://www.rackspace.com/email_hosting“. This is the cool part. Once my “bookmark” gets added to the list, the URL in it becomes a live link! To top it off, if I need to remember some obscure login for the site that I entered, I can put that information in the Notes section of the Task so it will appear when I rollover the little “note” icon on the left. I now have an always-available, fully functional, private Bookmarks list, complete with necessary authentication information.

As if all that wasn’t enough, I use Sync for BlacksBerry to put my Calendar, Contacts, and Tasks on my phone where I usually need them. Now when I use the Tasks application that came with my Blackberry Bold I can see a complete list of my Bookmarks (easily identified by a ‘#’ prefix) and even follow them using my mobile browser!

Are you using our Rackspace Email & Apps products in strange and productive ways? We want to hear about it!  Tell us using the comments section below.

A recent Wall Street Journal story included mention that Rackspace is the second largest business email hosting provider. The article failed to mention who is number one. Will the number one provider please stand up?

Bueller? Bueller?

To spare you any more suspense, we expect the leader is Google. Since Google does not provide specifics about its number of paid subscribers, we invite your help.

Rackspace’s most recent disclosure is that we have 1.4 million paid subscribers. In mid-July when Gmail came out of beta, Google said it had 1.75 million companies running Google Apps (including paid and free).

We would like to invite analysts, the media and others to research and confirm who is #1 and ask you to write about the conclusion in this comment section, on twitter with hashtag #num1, and on your own blog. We also ask that Google and others near the one million paid mailbox mark to join the conversation directly.

We know many businesses do use free email services. Nothing wrong with that. However, there is a big difference between business class email and email that is used in a business. If Rackspace is in fact #2, we are very pleased. Of course we want to be #1 in this (and all) category of IT computing services, but since our paid subscriber base has far surpassed the one million paid mailbox milestone without much of any marketing, we are certainly doing something right. Based on feedback from our customers, that “something right” includes our delivery of a business class service, at a price point that delivers cost savings, and is backed by Fanatical Support.

Email has been a stale topic of conversation, but since the era of self hosted email has climaxed, massive market share shift is underway to hosted applications from Google, Rackspace, and others. As the 100s of millions of mailboxes continue moving from servers running Exchange and Lotus Notes in-house, we believe the time is now for this discussion to be kicked up a notch for the benefit of the millions of businesses who need to get rid of their email servers and find a new and better way to do mail. Whether Google is the leader or whether it is any one of our many competitors trying to win and sustain all business email accounts, we want everyone to know that Rackspace believes in this business, are investing heavily, and plan to share some big plans in the coming months.

This is a massive opportunity where several firms will succeed. We at Rackspace are serious about this battle. We thank you for your help in determining who is currently in the lead and for continuing to monitor the battle for long-term leader check back right here at the Rackspace Email & Apps blog from time to time.

Portal Systems, a network solutions firm, uses the Rackspace Reseller Program to add value and reduce complexity for their clients. The Northern Virginia-based company currently manages about 100 clients under the reseller plan. “We were all ready managing the email accounts for our clients. As a reseller, we could do it all from one control panel without having to log in and out of the individual accounts,” says David Korte, Managing Partner of Portal Systems.

Rackspace resellers also enjoy volume pricing, API integration options, and marketing support without major equipment investments or huge upfront fees. With low monthly minimums and the option of Microsoft Exchange, Rackspace Email, or both, resellers can create a competitively priced and compelling offer to their customers. For David, that means his firm can work with smaller companies who need a few mailboxes and seamlessly scale to meet the needs of large clients needing hundreds of mailboxes.

Since using Rackspace for their clients’ email needs, Portal Systems has also seen the value of email hosting and moved their in-house email to Rackspace, returning the over 300 hours a year they were spending on email maintenance to more mission-critical activities. Read the Portal Systems case study to find out more about their experience with Rackspace, both as a reseller and customer. Visit the Rackspace Reseller Program page for more information on becoming a reseller.