Messaging goes mission critical

E-mail has become the primary medium for all business communications and continues to grow at an astounding rate. IDC predicts that the number of person-to-person e-mails sent on an average day will exceed 60 billion by 2006. That number excludes inbound spam, HTML/graphic-based content, distribution lists and opt-in e-newsletters. This explosion of informal written communications is increasing the costs of doing business.

This situation recently prompted a radical response from John Caldwell, head of Phones 4U, a chain of high-end cell phone stores in the U.K. Caldwell banned all internal e-mail among his 2,500 employees, claiming this move would save three hours per day per employee, and more than $1.6 million per month.

It's doubtful there will be a widespread adoption of Caldwell's ban. Therefore, companies will continue to face the need to manage e-mail traffic, comply with new Securities and Exchange Commission regulations for e-mail retention, reduce cost of ownership, and improve quality of service and system reliability. The increasingly mobile environment in which employees expect to have access to corporate messaging systems 24-7 puts even more stress on IT organizations. Storage, data protection and disaster recovery also are important concerns.

Message exchange in one form or another has existed from the early days of time-sharing computers. Today's corporate messaging systems have a heritage that hearkens back to desktop products that weren't designed for use as large, mission-critical enterprise applications and therefore lack reliability. The challenge for IT managers is to improve performance while reducing total costs.

Mayfield has invested in several companies that are working on solutions to these problems:

• Cemaphore Systems is developing a product that will simplify Microsoft Exchange and Outlook message management, and let companies centralize Exchange servers, thereby reducing costs.

• Scalix, a company incubated at Mayfield, offers an e-mail and calendaring platform based on Linux. The software is targeted at users who require (or at least desire) a highly reliable messaging platform.

• Mobileway is focusing on expanding the reach of services such as instant messages, infotainment, mobile marketing and m-commerce to mobile users.

• PostX has developed products that let large organizations secure the communication of sensitive information to employees, partners and customers via e-mail and secure Web sites.

• Banter, which provides natural-language automation for the CRM market, extends existing e-mail response applications by providing highly accurate automated-response capability that reduces the maintenance burden of IT personnel

Many small companies are offering innovative solutions to the problems raised by the dramatic growth of messaging. While it might seem risky to trust a mission-critical application to any company other than an old supplier, it might be more risky to ignore the opportunity to improve service and performance, and reduce costs.

Fong is a managing general partner with Mayfield, a venture capital firm in Menlo Park, Calif. He can be reached at kfong@mayfield.com.

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