Study shows nearly all messaging systems are managed in-house

Editor's note:
Beginning with this newsletter, we are welcoming Michael Osterman, vice president of market research at Creative Networks, Inc. as the new author of the Messaging newsletter. We want to thank Joel Snyder for his yeoman service over the past year as the author, for keeping readers vastly entertained, well informed and up-to-date on what is going on in the Enterprise e-mail world. Continue to watch for Joel's byline in Network World articles on the Fusion home page (www.nwfusion.com).

Today's Focus: Study shows nearly all messaging systems are managed in-house

By Michael Osterman

Creative Networks, Inc. has found that the vast majority of organizations in North America manage their messaging systems in-house: In a recent survey of Fortune 500 and Forbes 100 companies, for example, CNI found that 96% of organizations manage their messaging systems completely in-house, 2% completely outsource their messaging system, and the remaining 2% do some of both. This is interesting in light of the extensive research that CNI has conducted that shows that for many organizations, outsourcing the management of the messaging system can provide a significantly lower total cost of ownership.

Then why don't more organizations do it?

Part of the reason may be that much of the cost advantage from outsourcing comes in the form of productivity savings resulting from reduced downtime, not "hard" costs. However, downtime cost is a significant cost for any organization. For example, if a worker has a fully burdened annual salary of $50,000, and their messaging system experiences 120 minutes of downtime each month, and their likelihood of being impacted by any particular downtime is 30%, and their productivity loss during a downtime is 25%, then the cost of downtime for that worker is $43.27 annually. In an organization of 3,000 workers, the total cost of downtime is nearly $130,000 each year. If outsourcing can cut that downtime by 75%, then the cost savings for that organization is nearly $100,000 annually, or more than $32 per user per year.

And what about the future?

In the same survey mentioned above, CNI found that 16% of organizations plan to increase the overall level of IS/IT outsourcing during the next 12 months. That's good news for organizations that offer messaging outsourcing services - and for the many organizations that may benefit from them.

Michael D. Osterman is the principal of Osterman Research, a market research firm that helps organizations understand the markets for messaging, directory and related products and services. He can be reached by clicking here.

Messaging archive
Past newsletters.

E-mail outsourcer doesn't respond to e-mail
Network World, 08/04/99.

Take my apps - please
Network World, 05/31/99.

Tough sell for e-mail outsourcing
Network World, 01/25/99.

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