Q&A: Turning The E-mail Explosion Into VAR Opportunity

Two e-mail management specialists give VARs advice on how to capitalize on customers' dependence on e-mail as a business tool.

It doesn't matter what types of businesses your customers have — e-mail management is a growing problem for most of them. What kind of sales opportunities does e-mail management present for VARs? According to IDC, the e-mail archiving applications market reached $631 million in 2007 and will grow to $1.37 billion in 2011, a five-year compound annual growth rate of 23.4%. Recently, I had an opportunity to ask Vince Smolek, director of product management for Computhink, Inc., and Alan Armstrong, VP of business development for Fortiva, some questions about the opportunities for VARs selling e-mail management solutions.

What type of e-mail growth and management problems are companies experiencing?

Vince Smolek, director of product management for Computhink, Inc.: E-mail, as a means of doing business, is the norm for most organizations today. Orders are placed via e-mail, executive decisions are discussed and agreed upon in e-mail exchanges, contracts are negotiated, and in some cases, a single e-mail can even be attributed with the failure or success of an organization.
Due to these facts, e-mail has become a focal point for organizations today. The problems arise from amount of e-mails received or the messaging servers receiving them, and from how the e-mail is managed once it is sent or received. The e-mail management problems we see today are best demonstrated by the typical questions we hear customers asking.

• How will the changes in the FRCP (Federal Rules of Civil Procedure) affect us?
• How do we determine which e-mail messages need to be kept?
• How do we determine how long one type of message may need to be retained versus another?
• Who (or what) should be responsible for archiving these messages?
• Where should e-mail messages be retained or stored (e.g. on local users .pst files, on the active mail servers, in an ECM (enterprise content management) system, third-party archives, etc.)?
• How do we prevent messages from being deleted or make the action of a user deleting a message irrelevant?
• How can we enforce records retention rules and purge expired messages?
• How can messages be frozen or held if litigation arises?
• How do we protect knowledge or intellectual property contained within e-mail messages?

Questions like these define problems for organizations when it comes to managing e-mail. Organizations are looking for guidance, and this presents an opportunity for VARs to step up and provide that guidance.

Alan Armstrong, VP of business development for Fortiva: Over the last 15 years, we have come to rely on e-mail as the primary form of communication in business. Furthermore, bandwidth and hard disks are thousands of times larger than they were 10 years ago, so end users think nothing of sending 5 MB or 10 MB attachments, and they may do so multiple times as they iterate versions of a document.

The problem also is created by two other factors: 1. End users expect to retain this information for months or years. 2. Companies increasingly need to treat e-mail as a business record, meaning that they must retain e-mail centrally so that it can be accessed for legal discovery. When all of these factors combine, you have many end users sending many versions of large files, and the company retaining them in a central location for months or years. It's the perfect storm for VARs selling e-mail management solutions.

Is e-mail management a problem for companies controlled by regulatory compliance only?

Smolek: Absolutely not! All organizations that conduct business in any way via e-mail need to be concerned with e-mail management. As soon as e-mail is introduced in the business process, it becomes vital that there are polices created and solutions in place to enforce these policies. The last thing an organization wants is to be exposed. Without proper e-mail management, they become exactly that — exposed.

This exposure can appear in many forms. It can range from not having vital business communications archived from a terminated employee to the inability to produce an e-mail confirming product receipt by a plaintiff in a lawsuit. By having a proper e-mail archive solution and the necessary retention polices in place, an organization can reduce or eliminate such exposures. All organizations should review what they use e-mail for and the risks associated with those uses. In the majority of instances, the organization will conclude that a retention policy and/or archiving solution should be implemented.

Armstrong: That was the case up until about two years ago. But with the changes to FRCP in December 2006, and the case law that has accumulated since those changes (for example, Qualcomm vs. Broadcom), the issue now is less about regulatory compliance and more about e-discovery and litigation. These issues cut across industry segments to touch every company. There seems to be a threshold more in terms of the number of employees; companies with 500 employees tend to start to look at discovery and retention problems, and at 1,000 to 2,000 users, the issue can no longer be avoided. Employee count is just a proxy for company size, and larger companies are involved in more litigation.

What are the current trends in e-mail management VARs should be aware of?

Smolek: The updated FRCP now address electronically stored content and its usage as evidence in federal civil cases. FRCP has made many organizations take another look at how their e-mail is handled from an e-discovery standpoint. Organizations are aware that implementing a solid e-mail retention policy and archiving solution could save their organizations tens-of-thousands, if not hundreds-of-thousands of dollars in costs associated with electronic discovery. Organizations are more aware of this now than ever and are reviewing their e-mail archiving policies, or lack there of, and looking to purchase solutions to address their e-discovery and archiving needs.

Armstrong: As analyst firms Gartner and IDC have both noted, the growth in hosted or SaaS (Software-as-a-Service) solutions is increasing at the same rate or faster than in-house solutions. According to analyst Laura DuBois of IDC, managed services now comprise 40% of an overall e-mail archiving market that reached $477 million in revenue in 2006. And, while the ratio of services to e-mail archiving products isn't clearly changing, spending on services will grow just as fast as product spending — over 40% this year, IDC expects. This is due in part to the realization that managing a constantly-growing collection of e-mail for long time periods is a very time consuming and gets more difficult as time passes.
Another key trend in e-mail management is an increased focus on the need to effectively meet legal discovery requests and comply with the FRCP. This means that most customers are looking for features like litigation holds and advanced search functionality. Archiving solutions must also keep a copy of every e-mail with full metadata (searchable information about the contents of the e-mail) for the retention policy set by the organization. As a result, many solutions that were designed purely for e-mail storage management (allowing some end-user deletion of e-mail before the archiving process) are not sufficient.

How does e-mail management interface with ECM solutions?

Smolek: The primary purpose of an ECM solution is to manage electronic content. In that respect, e-mail is simply another form of electronic content for the solution to manage. ECM solutions providers have added connectors for the major e-mail server software, such as Microsoft Exchange and Novell GroupWise. These connectors allow for the capture and archiving of sent/receive messages into the ECM system. Once in the ECM system, these messages can then be secured, managed, and retained using the same standard tools available for all other types of electronic content. For flexibility, ECM solutions should allow for dedicated repositories for e-mail.

Armstrong: Today, many companies are managing electronic information in silo fashion, particularly in larger companies. The messaging team manages e-mail, and therefore does e-mail retention. Other groups might manage the ECM solution. Over time, these disciplines will converge, particularly as more of these functions are outsourced. But today, there isn't much interaction between these areas.

What should VARs look for when selecting an e-mail management solution to sell?

Smolek: From the product standpoint, VARs should look for a solution that supports multiple e-mail platforms. Those should include support for Microsoft Exchange and Novell GroupWise. The solution also should have a flexible search interface, retention options, and must allow for searching of a wide array of attachment types, in addition to the message body and headers. Many products on the market today can only search a handful of attachment file types, while the robust solutions allow for searching of hundreds of different file types.

Armstrong: It's important for VARs to understand what problems they plan to solve — pure e-mail storage management, legal discovery, or compliance — or a combination of all three. Most companies today are looking for a solution that can address all three areas of concern. Also, VARs should decide whether they want to get into the business of managing an e-mail archive. On-premise systems are notoriously expensive to manage, and often the management costs are underestimated at the outset. If VARs don't fully understand these costs, the results can be very difficult and costly. On the other hand, the VAR might consider selling a managed solution, which has the revenue benefits without the overhead.

What kind of training is required for VARs to sell these solutions?

Smolek: If the intent is to sell only into environments where customers are already familiar with their e-mail archiving requirements, the training for most solutions should be a matter of three to four days. If the VAR is looking to provide consulting services in addition to the e-mail archiving software, there is more time required for the VAR to become familiar with specific regulations and general best practices for the target market.

Armstrong: It depends on the background of the VAR. Normally we train the VAR in some prospecting skills, which are quite straightforward; you simply learn to recognize problems at your existing customers, such as bloated exchange stores, e-mail outages, and e-discovery requests. When you see those problems, we provide a conversation primer that can help you further qualify interest. After that, our Fortiva partner support team kicks in and walks you through the initial five sales. By the end of five sales, your salespeople generally understand the process. Of course, if you want to enable a whole sales team, the picture is slightly different, but it still starts with a 'walk-with' philosophy.

What is the most common mistake you see VARs making when selling e-mail management solutions?

Smolek: The most common mistake we see VARs making is the VAR not working closely enough with the customer to completely understand their archiving needs and requirements. Certain organizations will need to archive the majority of messages they send and receive for regulatory reasons, but plenty of others do not have such requirements. Therefore those organizations should only be archiving what they need to.
E-mail archiving is unlike traditional file archiving, in that the quantities of e-mails a company sends/receives will typically outnumber the amount of standard electronic files an organization generates on a day-to-day basis. Although archiving everything for every organization seems like the simple answer, it is rarely ever the correct one. Archiving everything with no clear policies or retention plans in place can lead to poor system performance, out of control storage requirements, and in some cases, increased liabilities.

Armstrong: The most common mistake is selling the wrong solution to the wrong client. Some clients are very small and just want storage optimization at very low costs. These customers are not looking for true archiving, but a second tier of storage. The best customer for an e-mail archive will be the one who has legal discovery problems and storage problems combined. The customer has to care a lot about the data integrity, and if VARs don't prequalify, they can waste a lot of time.

What can we expect in e-mail management in the next few years?

Smolek: The market for e-mail management looks like it will continue to grow for at least the next two to three years, providing ample opportunity to sell e-mail archiving solutions and services. There's another thing that VARs should be aware of. For organizations in highly regulated environments, there is an emerging demand for hosted archiving solutions and service providers to handle all of an organization's e-mail archiving requirements. Many organizations do not want to be burdened with in-house systems and the requirements involved in maintaining proper integrity of their e-mail archives. These organizations would much rather offload the responsibility to third-party service providers. That said, I would not be surprised to see an emergence of e-mail archive service providers over the next couple of years.

Armstrong: The industry is only beginning to upgrade to Exchange 2007. That is a significant move and will dominate the messaging discussion over the next several years. The second issue is retention management. Today, a fairly small percentage of companies manage e-mail retention the way they would manage retention of a more established system of record. I think that 2008 will go down in history as the year of e-mail retention, where you'll see a large majority of companies getting serious about that.