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The Real Costs of “Free” Email Services For Small BusinessesUncovering The Negative Impacts On Brand Perception, Productivity & Performance

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With the average

email user sending and

receiving more than 40,000

messages per year, according to The

Radicati Group,2 an efficient email platform is a vital

asset and a mission-critical function to business success.

Not only is the communication channel required for

improving productivity among company team members,

email also is now the primary channel that sales teams

utilize to reach customers and prospects.

To effectively build perception and reputation among

peers and customers, best-in-class organizations are

looking beyond the short-term attraction of free email

services, and are leveraging hosted email services, which

provide an array of business-savvy features, such as

calendar and contact sharing, mobile email capabilities,

and cloud-based storage.

This white paper spotlights the costs and tradeoffs

small businesses must consider when selecting an email

platform for their companies, as well as the necessary tools

and technologies to optimize perception, productivity and

performance among employees.

2 The Radicati Group, Inc. Email Statistics report, 2011-2015.

In today’s hyper-connected world, email is a vital platform

for small businesses to build relationships with customers

and prospects, support internal employee communication,

and optimize overall productivity.

Email remains the linchpin of all communication channels.

In fact, findings from Forrester Research reveal that 87%

of all company communications are via email.1 Businesses

also are amping up performance and productivity via

mobile tools and technologies, including smartphones and

tablet devices, while team members are on the go.

The benefits of mobile email are especially strong for small

businesses that are striving to build their employee and

customer bases, and require instant connectivity, anytime

and anywhere.

Initially, free email platforms seem like the ideal solution

for a small business establishing itself in the marketplace:

They’re free, easy to register, and have basic, easy-to-

operate functionality. However, as organizations expand,

they often realize there are substantial costs and risks

associated with free services, especially within the three

key areas of a successful enterprise:

• Perception, or how prospects and current customers

view a company and its overall brand;

• Productivity and employees’ overall ability to achieve

day-to-day tasks, as well as long-term projects; and

• Performance on both short-term and long-term

goals within an organization.

Although the immediate benefits of signing up for these

platforms are attractive at first glance, limited features

and security can be costly to the overall performance of a

small business.

1 Forrester Research. The State of Workforce Technology

Adoption: US Benchmark 2009

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Building Your Business: Perception Is Key

email address

often is the primary

reflection of a brand.

The lack of a dedicated domain

negatively reflects an organization,

as well as employees’ professionalism. In fact, 75% of

people form judgments about others based on their email

address, according to 1&1 Mail and Media.3 These findings

are even more problematic for small businesses that are

constantly vying for customer and prospect attention in

the competitive business world.

Small and growing businesses also run the risk of

seeming less professional or may be taken less seriously

if their email doesn’t have a dedicated domain name.

Organizations also may not be able to access business-

imperative information, such as research studies

and webinars, since many outlets prohibit content

downloading with a general domain name.

Overall, a consumer-level domain name raises a

figurative red flag, and encourages prospects to delete

communications, avoid opening messages, and even

report messages as spam. This lack of trust can greatly

hinder a small business’ growth, relationship-building, and

overall reputation.

3 1&1 Mail & Media, Inc. Email and Communication

Research. 2011

Organizations are constantly fighting for customer eyes

and dollars. This is especially true via email, where inboxes

are flooded with company communications, potential

business deals, and memos.

Findings from technology market research firm the Radicati

Group, in the report, Email Statistics Report, 2011-2015,

indicated that email account holders send and receive

approximately 110 emails a day. This estimate is expected

to reach 125 daily messages by the end of this year.

“[Small businesses] have to view email as an essential

tool to building and maintaining relationships with

customers, as well as continuing relationships with

vendors and partners,” said Kirk Averett the Director of

Product for Email & Apps, Rackspace. “Email’s flexibility

allows organizations to keep those relationships working.

Although there are other tools, email is the most powerful

and commonly used tool out there.”

Utilizing a company-specific domain name allows an

organization to be recognized quickly and remain top-of-

mind among prospects and clients. For example, if Joe Smith

is the CEO of smartphone application developer ViaMobile,

he will tout a JoeSmith@ViaMobile.com email address,

rather than JoeSmith@gmail.com. By connecting the dots

between brand name and email address, small businesses

will build awareness, recognition, and most importantly, trust,

protecting a company’s overall image as an organization that

is professional and eager to do business.

Since businesses are now connecting and engaging with

their customers and prospects primarily via the web, an

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Case In Point: West Arete Computing Improves Spam Management With Rackspace

A personalized email address allows businesses to

reduce their own spam intake, and in turn, improve

efficiencies and overall time management. By

implementing an email hosting solution, companies can

utilize anti-virus scanners, which are typically integrated

into a host’s SMTP gateways.

West Arete Computing, a custom software

development firm, relied on email to receive critical

systems alerts. Although the company had an on-staff

systems administrator to run email on-premises, spam

was becoming a more time-consuming task to tackle.

“Keeping up with email and spam was a big problem,”

said Scott Woods, President and Founder of West

Arete Computing. “In order to focus on software

development, we didn’t want to spend time on that.”

After trying out multiple solutions, and conducting

in-depth research on possible platforms, the company

selected Rackspace.

“None did as good a job as Rackspace for experience

and spam detection,” Woods said. “I looked around

online forums to see what people I knew and trusted

were saying. The consistent theme was Rackspace has

good service and a good email product.”

Hosted email solutions consistently apply the latest

anti-spam updates to shield staff from hindering

productivity and draining valuable company time.

For example, Rackspace leverages a three-pronged

approach to help ensure deliverables are spam free:

a Gateway Scan, a Cloudmark Scan, and a Message

Sniffer Scan. This strategy allows the company to block

an average of 45 million spam messages a day.

Regardless of organization or position in a company,

employees and executives are faced with the challenge

of sifting through email messages and removing spam

and unwanted contacts. In fact, spam management is a

leading hurdle in team members’ overall productivity and

performance, and in turn, a business’ overall success.

In fact, small business employees spend approximately

29 minutes per day dealing with spam, according to the

2011 Report on UC and Cloud-based Services for SMBs,

conducted by Webtorials. Regardless of the obvious

detriments of spending quality business time sorting

through messages, spam management is a constant

struggle among small businesses that don’t have the

solutions or resources to address these issues efficiently.

Small businesses also must determine the potential impact

of not having dedicated domain names for employees. By

touting a free email address, team members can be mistaken

for spam and, in turn, add to prospect and client frustrations.

Large Internet Service Providers (ISPs) and some web-

based email services are utilizing email authentication as

an added strategy to fight spam invasion. These stronger

spam filters make it more difficult for companies to get

emails delivered and opened if they don’t have a business-

specific domain name.

Executives must acknowledge the business-wide benefits

of leveraging dedicated domain names. By touting a

business-branded domain name, organizations can make

their communication goals clear, thus, increasing the

likelihood that messages will be opened and — most

importantly — read.

Solving The Spam Puzzle

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Productivity In The Work Place: Do You Have The Right Tools?

“Basic capabilities

such as scheduling

an appointment, receiving a

reminder, tracking work, scheduling and

coordinating work, and saving history of your tasks is

what makes email special and will keep it special for a

long time,” Averett said. “A lot of the new social tools

add special value, but email is still the heart of written

communications. It’s the most widespread in terms of

number of users, and has the ability to connect with

friends, relatives, strangers, customers, vendors and

more; has been tested and is fully mature; and operates

at an extremely high scale. You can’t underestimate the

importance of that ability to reach anyone at anytime.”

Organizations are opting to implement hosting platforms

to provide employees and executives with instant access

to emails, calendars and contacts via mobile devices,

including smartphones and tablets, which are becoming

ubiquitous in the business world. The limited features of

some POP and IMAP email systems allow no room for this

form of flexibility and instant communication, which is now

required for today’s small businesses, especially as more

organizations use mobile email, tablets, laptops, and other

wireless tools as an integral part of their communication.

The majority of businesses (87%) tap into email as a

collaboration tool to share announcements, content and

vital information, according to Forrester Research. As a

result, the “short and to the point” communication once

synonymous with email is being transformed to include

lengthy messages and larger attachments, leading to

longer wait times for email retrieval and message uploads.

When standard POP email servers are overwhelmed and

systems go down, productivity for a small business is

depleted. However, this is a constant problem among

small and mid-sized businesses. In fact, company email

systems experience a mean of 53 minutes of unplanned

downtime within a month’s time, according to a recent

Osterman Research.4 Hosted email solutions, however,

typically guarantee 99.9% uptime, leading to improved

productivity and more efficient connectivity.

If and when email operations are up, it takes the right tools

to ensure success. Collaborative features, such as the ability

to share contacts, calendars, to-do lists and files, as well

as efficient archiving capabilities, are imperative to keep

executives and employees on the same page regarding

schedules, company developments, and content creation.

Companies that don’t provide seamless access to

information and resources across technology platforms can

take a serious hit on not only productivity, but profitability,

as well. Research from IDC reveals that inconsistent access

tools, ineffective searches for updates and content can

cost a company $3,300 per employee, per year. Meaning, a

small business with 400 employees can experience a $1.32

million productivity loss in one year alone.

The ability to share calendars, contacts and tasks is a must

in the highly connected business world. Employees and

executives are constantly traveling and more on-the-go

than ever. As a result, instant access to email accounts,

mailboxes, important events, and other information is a

necessity, rather than a luxury.

4 Osterman Researh. Why Email Must Operate 24/7 and How to Make This Happen. 2009

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Smartphone subscription and usage is growing at an

unprecedented pace, making mobile email a practical and

even necessary resource for on-the-go workers. In fact,

an April 2011 study sponsored by Google showed that

82% of smartphone users check and send email with their

devices.5 This hyper-connected behavior even extends

into after-work hours, according to Osterman Research.

In its third annual research survey, Osterman revealed

that a vast majority of workers (83%) check email using a

smartphone or mobile device before and after a standard

workday.6

“A lot of small business owners are their own best

salesperson, so when they’re out traveling, meeting with

clients and prospects, they can still be connected to all

their other customers without being confined to a desk,”

Averett said. “That form of flexibility matters more and

more since we’re in a very dynamic business market.

People need the freedom to move about and travel, and

even have that flexibility in time. Long gone are the days

when work was nine-to-five, and I think [small businesses]

appreciate that. So being able to roll out of bed in the

morning, answer a few emails and then get ready for the

day, being flexible, and spreading work out, is imperative

to small businesses”

Optimal email hosting platforms allow data to be synced

automatically or when requested by users via BlackBerry,

iPhone and Android, as well as from any laptop, desktop,

or tablet device. Push service and real-time sync is

provided for all account features, including basic mail

and folders, contacts, calendars and tasks. Leading small

businesses are taking note of the companywide benefits

of implementation, including streamlined communication

and task management, as well as instant access to

calendar invitations across devices.

5 Google. The Mobile Movement Study. April 2011

6 Osterman Research. Osterman Research Third Annual Survey. November 2011

The Mobile Imperative: Increased Connectivity Makes Seamless Collaboration A Necessity

Case In Point: PROACT Improves Connectivity With Hosted Email

PROACT Search, an educational recruiting firm,

initially utilized a standard POP email system, which

provided no additional support for mobile devices.

“This POP email was not conducive to running a mid-

sized company,” said Thomas Vranas, President of

PROACT Search, a Rackspace client. “Things I’d taken

for granted in the corporate world, like calendars,

sharing and invitations, are necessities.” With 80%

to 90% of his company’s business done via email,

stagnant communications and delayed replies were not

an option, Vranas added. After adopting Rackspace,

employees are now able to check email from hotel

computers, laptops and mobile phones, so they’re

always connected, even while on the road.

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Hosted email

solutions provide

continual support on

a 24x7x365 basis, allowing

business owners and employees to

focus on core operations, rather than back-end

issues. Service providers, such as Rackspace, provide

organizations with a staff of experts to address network

issues in a timely manner, as well as in-depth set-up

support. Transition representatives also are provided to

allow companies to easily migrate from free email services

to new, hosted platforms, efficiently.

“We are not a tech company — we don’t have a lot of

technical expertise,” said Vranas of PROACT Search. “The

Transition Team [from Rackspace] was super helpful in

getting us setup, speaking in plain English, and not talking

down to us.”

In the business world, productivity and performance go

hand-in-hand. Daily operations are dominated by strict

deadlines, new deals and partnerships, and customer

care, all of which require immediate attention. Free email

services create a greater chance of system downtime and,

in turn, lackluster performance.

“About half of our email volume comes from system

status information,” said Woods. “Email is the primary

notification vehicle for system alerts — without it, systems

could go down and we’d never know.”

Overall, email platforms such as Gmail and Yahoo! require

excess maintenance, which small business owners and

their IT teams simply don’t have the time for. Moreover,

by partnering with a domain name provider such as Go

Daddy, organizations are faced with sub-par knowledge of

email functionality and resources.

Companies that employ hosted email platforms, however,

optimize time management and financial resources. In fact,

more than 60% of organizations are transitioning to hosted

solutions due to lower total cost of ownership, seamless

deployments and overall easier management than

network-based providers, according to Forrester Research.

KarmaCRM, a provider of SaaS customer relationship

management tools, is a startup company that taps into

Rackspace hosting services to free up the company IT team.

“It’s far too easy to fall into the trap of doing everything

in-house and waste your IT talent managing email servers

instead of growing your business,” explained John-Paul

Narowski, Founder of KarmaCRM. “Our business is CRM,

not IT, and everything we can do to help keep that in the

forefront helps us remain lightweight and competitive.”

Support 24x7x365: A Must-Have For Small Business Performance

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Conversely, organizations that subscribe to free email

services are simply left to consult message boards and help

forums, where they will, hopefully, find a solution to any

technical issues and answers to any follow-up questions.

“As a general rule, a paid email provider has a greater

obligation and financial motivation to take care of your

information and mail,” Averett said. “However, the most

critical piece is support, which is non-existent in free email

platforms. If one of your critical communication tools

doesn’t have any back-up behind it, in terms of a human

being that can help you find a missing message or track

something down, that’s a big problem for businesses.”

Communication & Client Protection: The Free Email Game-Changer

Information and conversation protection is key

to maintaining business integrity and sustaining

relationships. Free email platforms often flood inboxes

with advertisements and can easily access emails and

information, leading to increased likelihood that customer

and partner data will be compromised. This is a factor

that many organizations ignore, due to the appeal of

obtaining a service for free, according to Averett.

“The average [small business] today uses the email that

was included when they purchased a domain name,

or a free domain that came with an Internet provider,

or possibly a Yahoo! or Gmail,” Averett explained.

“To keep company and customer confidentiality top-

of-mind, organizations must implement solutions

that focus on email and are willing to provide

features for security during message storage and

transmission. Hosting companies integrate extensive

security measures to help you protect data from

physical threats, and other circumstances, including

overheating, power outages, and fires. However, the

continual protection of hosted systems is a key benefit

of hosted solutions.

“As a general rule,

a paid email provider has a greater obligation and

financial motivation to take care of your information and mail . However, the most critical piece is

support, which is non-existent in free email platforms.”

- Kirk Averett

Director of Product for Email & Apps

Rackspace

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As businesses continue to veer toward digital channels

to build and maintain relationships, as well as increase

business, it is becoming more imperative for small

business to follow suit, and most importantly, be armed

with optimal resources.

Although smartphones and social tools are becoming

ubiquitous in the business world, email still remains

the solid foundation of all corporate communications,

making a reliable email platform a vital asset to business

productivity, profitability, and performance.

Gartner’s Magic Quadrant for Managed Hosting, 2012,

revealed key characteristics for an efficient service. The

report read: “The most heavily weighted criteria for a

hoster’s ability to execute are service offering and service

excellence, as reflected in the customer experience with

sales, support, and operations.”

Optimal email hosting solutions allow organizations

across sizes and segments to streamline operations and

to help ensure optimal email deliverability, uptime, and

security. Providers also offer collaborative for employees

and business owners to be constantly connected and are

able to share status updates, events, and communications;

ensuring streamlined and successful business operations.

With a reliable and sustainable email platform on hand,

small businesses are armed with the tools, resources,

and support to optimize brand perception, and drive

productivity as well as performance, for continued business

growth and success.

Conclusion: Building Business Relationships & Opportunities With Hosted Email Solutions

The Hosted Service Advantage

To truly succeed in a highly competitive and connected

marketplace, small businesses need sturdy and reliable

email platforms. Hosted email service providers cover

the gamut to deliver optimal email performance. By

implementing a hosted email service, small businesses will

receive the following benefits:

•Support. Most businesses operate across multiple

time zones and at all times, making a support team

that is on call 24x7x365 a critical asset to help ensure

email performance is consistently on point.

•Uptime. With email acting as the linchpin of all

business communications and relationships, it is

vital that small businesses have optimal uptime and

deliverability. Since service and connectivity is key to

keeping business operations afloat, most hosted email

service providers provide more than 99% uptime.

•Backup and data recovery. Leading hosted email

solutions provide email backup in case servers crash

or stop responding. Recovery systems also are

available to restore any email messages that get lost

in translation.

•Connectivity. Small business owners and employees

are constantly on the go, formulating relationships, and

attending important meetings and events to create

new sales opportunities. Hosted email solutions provide

enterprises with instant connectivity to BlackBerry,

iPhone, and Android devices, as well as any Internet-

connected laptop, desktop or tablet, to help ensure

optimal performance and productivity to on-the-go

team members.

•Collaboration. Hosted platforms offer small

businesses optimal resources to help team members

receive and share information. Collaboration tools

include project tracking, content management, and

the sharing of calendars, and to-do lists.

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DISCLAIMER

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based company provides Fanatical Support® to its customers, across a

portfolio of IT services, including Managed Hosting and Cloud Computing.

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