Hosted email has been available for quite some time, but the arrival of new “cloud-based” solutions offered by technology heavyweights such as Google (GoogleApps), Microsoft (Microsoft Online Service), Apple (MobileMe) and even IBM (Bluehouse) are stirring up a renewed debate of the pros and cons of using these services at an enterprise level.

Last week’s outage at Google, recent repeat problems at Amazon’s S3 storage services and Apple’s “insanely grating” MobileMe launch highlight the need to carefully consider all aspects when weighing hosted vs. on-premise solutions.

Cost reduction is typically a key motivator, especially for smaller and non-tech companies, when eying a utility or SaaS model for email.  Jason Brooks at eWeek Labs wrote an article last week that lists five key issues to consider when evaluating a hosted email service.  Jason’s list was a good start, but missed a few key issues – specifically around security and compliance. Here’s my extended version:

  1. Control – Outsourcing email may significantly limit the control over data and users. Many companies have extensive regulatory requirements such as content control, data leakage protection (DLP), Chinese walls / ethical firewalls and content archiving, that are not yet addressed by hosted solutions.
    -> Don’t forget to check your company’s specific requirements.
  2. Security – Email has become the primary communication medium for business. Corporate messaging systems host a wealth of proprietary and confidential information, which typically doesn’t leave the corporate network. Hosted services will have to provide extensive encryption, data access security and audit capabilities before enterprise customers will even consider moving this data outside their corporate firewall.
    -> Make sure all your corporate legal, risk management, and compliance needs are satisfied by the services offered.
  3. Performance – Moving user’s mailboxes into the cloud typically means drastically increased WAN traffic. Many companies have learned this the hard way while consolidating mail servers behind the firewall. A bandwidth upgrade to the Internet pipe is most likely a requirement to guarantee reasonable response times and happy users.
    -> Make sure to plan for peak-hour bandwidth needs.
  4. Reliability – Service availability/reliability depends mainly on two factors for hosted email:  service uptime and connectivity.  Hosted services are still weak on SLA commitments and proactive monitoring/notification of service outages. Connectivity problems can cut off users from their data possibly for an extended period of time, as few (smaller) companies have redundant Internet access in place.
    -> Consider deploying multiple access paths, and review service level commitments and planned downtime schedules carefully.
  5. Integration – Email should really not be treated as an isolated messaging service. The premise of unified communication is starting to deliver on its potential. Many companies are already deploying integrated solutions that combine email, IM, eMeetings, telephony and presence with other collaborative applications, and even with traditional enterprise software such as CRM and ERP. None of the current hosted offerings can provide such feature-rich capabilities yet. Furthermore, any existing integration points may be severed or will be costly to reestablish with a hosted service.
    -> Carefully review the integration between your existing email and other enterprise apps, and evaluate possible barriers for future integration and unified messaging plans.
  6. Scalability – Many users are already complaining about mailbox and message size restrictions imposed on their on-premise systems. Hosted solutions will have similar limitations although typically driven by cost considerations.
    -> Make sure to evaluate the needs of your power users.
  7. Cost – The promise of significant cost reduction is often the most compelling reason to consider a hosted solution. All of the issues listed above play into the cost model, and critical cost drivers such as necessary bandwidth upgrades and premiums paid for power users are often overlooked in the initial assessment.
    -> List all requirements and all current costs associated with providing the on-premise services for a thorough comparison to the hosted service.

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