Jeff Hardy, vice resident of business operation at SmarterTools
(WEB HOST INDUSTRY REVIEW) — Jeff Hardy of SmarterTools delivered a session this morning he called “The Lesson of The Ten,” in which he made a case around the enormous significance of email in modern communications.
In order to illustrate that, he examined how, in signing up for or purchasing any service online, for example, an email and password is required. He says the email/password combo is the only really unique identifier you have on the Internet.
He says email is the single most valuable piece of real estate on the web or in the cloud.
Hardy says Google and Microsoft, the two “biggest behemoths” in IT are fighting tooth and nail over email. But why is that, he asks.
Microsoft has a problem, he says, which is that much of the company’s messaging around email has been that it has to be expensive (in the world of exchange). Which isn’t quite true, says Hardy.
Google has a problem too, he says, which is that it has been saying everything is free, which isn’t quite true either.
And Facebook has a problem which is that the only way to expand its value is to expand into messaging and email.
Hardy goes through what he sees as the pricing model for email. He says the total cost (to the host) for enterprise class mail should be 39 cents for an Exchange replacement and 4 cents per mailbx per hardware, per month – according to the model of something like SmarterTools or other “Exchange replacement” type email solutions.
There might be a bit of overstatement in that, or rather, he may be understating somewhat the functionality of Exchange, but the basic premise still stands.
Hosting providers right now are offering email hosting solutions for prices ranging from $8 per month to more than $20 per month, so even if his data is off, there’s plenty of room in there for email to be profitable.
“The Ten,” he says, is a notion that says that each email account represents an average of 10 users, and each of those people is an opportunity to sell additional services.
Email is an opportunity for internal cross-selling. It’s also one of the stickiest services you can provide. And outsourcing your email hosting to a third-party provider, says Hardy, is forgoing that opportunity to create stickiness and loyalty.
Hardy says his message is pretty simply that there’s a lot of opportunity in delivering email, obviously the giants recognize that opportunity, because they’re aggressively going after email accounts.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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