Providers of hosted messaging services are reporting double-digit growth, as more companies – large and small – are outsourcing management of their e-mail systems.

E-mail is a major frustration for CIOs, which is one reason they are more willing to outsource e-mail systems to a reliable service provider, says Michael Riegel, director of managed services for IBM Global Services.

"Studies have found that as much as 70% of a company’s intellectual property is in the e-mail system," Riegel says. "Because it’s mission critical, it requires more uptime, it requires more storage, and it requires greater security. It’s these three new layers of complexity that have come into play that are frustrating clients."

The hosted e-mail market, including corporate and consumer mailboxes, will double over the next four years, reaching 2 billion mailboxes by 2010, according to The Radicati Group.

Although small to midsized businesses are the primary customers for hosted e-mail services, more enterprises are outsourcing e-mail because it is getting increasingly complex with antivirus, antispam and mobile requirements.

Service providers likely to benefit from the trend include IBM, Verizon Business and HP. These service providers offer hosted Microsoft Exchange, IBM Lotus Notes and generic SMTP platforms.

"The managed business e-mail provider market will grow an average annual rate of 10% over the next four years," The Radicati Group said. "Companies typically purchase managed business e-mail services along with a host of other IT management/outsourcing services."

For example, Verizon Business says its customer base for hosted messaging services grew more than 30% between January 2006 and January 2007.

"The adoption of outsourced e-mail is moving beyond small and midsized businesses," says Patrick Verhoeven, group manager for IT Solutions at Verizon Business. "We’re seeing large enterprises being comfortable outsourcing e-mail, not just in North America but in Europe, India and Asia. We have a customer with 10,000 seats in the United Kingdom. We have a customer with 10,000 seats in Scandinavia. We have 12 large customers in the Asia Pacific region."

Enterprises are interested in outsourcing e-mail because managing Exchange servers, battling spam, viruses and phishing attacks and supporting wireless devices such as Blackberries is difficult.