Messaging in the SMB Market, 2007-2010

SUMMARY

This report presents the results of a detailed research program into preferences and plans for messaging capabilities in the North American SMB space over the next several years. It focuses on various types of messaging capabilities, including messaging systems, messaging security, instant messaging, encryption and archiving services, among others. The goal of this research was to provide vendors, investors and others interested in the hosted messaging market with actionable information that they can use to develop marketing plans and to more accurately focus their efforts on understanding and penetrating the SMB messaging market.

Key Findings and Trends Discussed in this Report

Smaller SMBs Tend to Use More Consumer Email and Hosted Email

Smaller SMBs are much more likely to use consumer-oriented email accounts for business applications than are larger SMBs, while larger SMBs are much more likely to use on-premise messaging systems. Smaller SMBs are also much more likely to use a hosted or managed provider of email than are their larger counterparts

Larger SMBs Are More Likely to Use True Business-Grade Email Systems Larger SMBs, on the other hand, are much more likely to use business-grade email systems like Microsoft Exchange or Lotus Notes/Domino.

Mailbox Quotas are Used Commonly

About one-half of SMBs impose mailbox size quotas on their users. Enterprises, however, are much more likely to impose these quotas.

SMBs' Messaging Problems are Difficult, But Not as Bad as for Enterprises

Overall, the variety of messaging problems that we asked SMB respondents to rate are not as severe as the problems experienced by enterprises. Further, the problems experienced by SMBs are somewhat different than those experienced by enterprises.

Significant Concern About Data Leakage

A significant proportion of SMBs are concerned or extremely concerned about the leakage of sensitive information through approved, supported communications channels and applications.

Smaller SMBs are Impacted More by IM Threats

Our research showed that smaller SMBs have been impacted to a greater degree by a worm or virus introduced through the use of public instant messaging than is the case with larger SMBs.

Smaller SMBs are Much Less Concerned About Spyware

One in eight smaller SMBs believes that spyware does not pose a threat to their organization, while only one in 50 larger SMBs express this lack of concern.

No Consensus on Data Retention Practices

There is no consensus on the risk associated with preserving email and instant messaging content among SMBs. One in seven organizations believes that deleting all email and instant messaging content on a regular basis is the least risky option, while about one in five organizations believes that preserving this content best minimizes risk.

VoIP Integration is Not Yet a High Priority

Only one in five SMBs' messaging systems is today integrated into a VoIP solution and two out of five organizations have no plans to integrate messaging and VoIP at some point in the future.

There is Strong Price Sensitivity to Hosted Email

Not at all surprisingly, our research showed that more organizations are likely to outsource their email capabilities at lower price points. Smaller SMBs are more likely to be open to the notion of outsourcing their email, although the differences between smaller and larger SMBs are not significant.

Smaller SMBs are Very Open to the Notion of Hosted Email

Smaller SMBs are much more likely to be open to the notion of hosting their email capabilities, while larger organizations consider on-premise capabilities using in-house servers or appliances to be much more desirable.

SMBs Want to Migrate to an Integrated Messaging Management Model

Nearly two-thirds of organizations currently uses point, best-of-breed solutions for managing email security. However, far fewer organizations actually prefer this model for managing their security capabilities.

Most SMBs Will Not Migrate to New Messaging Systems in the Near Term

The vast majority of organizations have no plans to migrate to a new email or instant messaging system. Over time, however, the likelihood of migrating to a new system increases, albeit only modestly.

Messaging Budgets are Increasing

While median per user budgets for larger SMBs will increase modestly between 2007 and 2008, email budgets for smaller SMBs will increase significantly more. Instant messaging budgets for larger SMBs will also increase significantly between 2007 and 2008.

TABLE OF CONTENTS

• 1. Executive Summary
• 2. Methodology and Overview
• 3. Current Messaging Environments in the SMB Space
• 4. Messaging Problems in the SMB Space
• 5. Desired Features, Functions and Products in the SMB Space
• 6. SMBs' Messaging Migration Plans
• 7. SMB Messaging Budget Issues
• 8. Future Trends in the SMB Space
• 9. Vendor Issues in the SMB Space

List of Figures

• Distribution of Email Users by Type of Email System Employed
• Employees' In-Office / Out-of-Office Status by Size of SMB
• “Do you enforce a mailbox size quota?”
• Level of Concern About the Leakage of Sensitive Information via Approved and Supported Applications and Communications Channels
• “Has your user base ever been impacted/infected by a public instant messaging network worm or virus?”
• Views on the Threat Created by Spyware
• Steps that Organizations are Taking to Limit Spyware
• Views on the Risk Associated With Preserving Email and Instant Messaging Content
• Requirement to Respond to Discovery Requests 2006-2007 and 2007-2008
• “For discovery requests, are you asked to produce email message conversation threads?”
• “For discovery requests, are you asked to produce non-email data?”
• “Are discovery requests a disruptive or painful experience for your IT department?”
• Importance of Zero Hour Virus Protection
• “Is your organization's messaging system(s) integrated into a VoIP solution?”
• How Instant Messaging is Used
• Importance of Various Capabilities in an Instant Messaging Hygiene Solution
• Desirability of Various Delivery Models for Managing Instant Messaging Capabilities and Hygiene
• Likelihood of Outsourcing Email to a Hosted Provider at Various Price Points
• Desirability of Various Email Management Models
• Desirability of Various Models for Anti-Virus and Anti-Spam Capabilities
• Current and Preferred Models for Delivering Email Security Capabilities
• Types of Communication Traffic for Which it is Important to Have Encryption Capabilities Likelihood of Migrating to a New Email System
• Likelihood of Migrating to a New Instant Messaging System
• Likelihood of Switching to a Better Email System That Requires Switching Desktop Clients Likelihood of Switching to a Better Email System if Desktop Clients Can Be Retained
• Estimated Costs of Providing Email Capabilities Per Seat Per Month
• Median Per User Messaging Costs, 2007
• Median Per User Messaging Costs, 2008
• Roles Involved in Decision-Making for Purchasing New Messaging Systems or Adopting New Messaging-Related Technologies
• Plans for Achieving Enterprise-Grade Instant Messaging Capabilities

List of Tables

• Total Available SMB Market in the United States, 2007 and 2010
• Total Available SMB Market in Canada, 2007 and 2010
• Users by Messaging System
• Users by Email Client
• Users on Primary Instant Messaging Systems
• Importance of Various Messaging and Collaboration Technologies
• Messaging Problems Experienced by SMBs
• Costs of Upgrading to Exchange 2007 at Various User Volumes Assuming that New Servers Must be Acquired
• Costs of Upgrading to Exchange 2007 at Various User Volumes Assuming that Existing Servers and Storage Can be Used
• Desire for Integrated vs. Standalone Capabilities
• Percentage of End Users on Various Mobile Platforms, 2007 and 2008
• Current and Planned Messaging-Related Capabilities
• Likelihood That Organizations Would Consider Various Email System Vendors/Products
• Likelihood That Organizations Would Consider Various Instant Messaging System Vendors/Products
• Likelihood That Organizations Would Consider Various Messaging-Related Vendors