We’re hearing a series of rumors that something is going badly wrong at Dell/MessageOne. Eg:

• They’ve lost a huge amount of customer archived email over the past couple of weeks
• Many customers are making inquiries about other vendors and their ability to ingest/absorb their historic archive data
• One vendor told us they had been asked to help customers move their emails back from Dell/MessageOne and the most efficient way to ingest large amounts of data (10 TB for example)

Can anyone helps further? If you have input, please send to me at david.ferris@ferris.com or call me on +1 415 367 3436. If you prefer to be anonymous, let me know and we won’t publish anything that identifies you.

… David Ferris

There are three big players in the professional networking business: LinkedIn, Viadeo, and Xing. LinkedIn is best known in the United States. But France’s Viadeo and Germany’s Xing are important competitors. Viadeo recently paid us a visit. The company’s focus is on Europe and emerging economies. It has 25 million subscribers. It plans to enter the U.S. market through leveraging its international subscribers, such as those in Canada and Mexico.

Main services from the user standpoint:

• User directory.
• Users can belong to many different interest groups.
• Each interest group provides:
  • Common bulletin board/wall
  • Directory of interesting events
  • Q&A/forums for advice sharing
  • User-contributed news

Finances:

• Most use is free.
• Around 10% pay for services. This is pretty good compared with LinkedIn, which appears to have around 1% who pay.
• Fee is around 6 euros ($9) per month if you’re a paying subscriber.
• Ferris Research estimates revenues at $40 million annually. The company is profitable and growing at a healthy clip. It’s taken a total of 15 million euros ($23 million) external funding.
• Revenue breakdown:
  • User subscriptions: about 50%
  • Recruiting tools sold to HR and consultants: about 25%
  • Advertising: about 25%

Observations:

• The collaboration tools are conventional but attractive.
• The rich collaborative environment means that in principle, Viadeo can offer extremely targeted advertising, for which advertisers should be prepared to pay handsomely.
• Viadeo’s collaboration tools are an important point of differentation from LinkedIn, which is directory-centric.
• Viadeo’s localizations--e.g., it is currently offered in Dutch, English, French, Italian, Portuguese, and Spanish--are another important differentiator.
• Around 10% of subscribers pay up. This is pretty good compared with LinkedIn, which appears to have around 1% who pay.

… David Ferris

Charmingly named YippieMove helps you migrate email from one message store to another. It’s mainly aimed at small businesses and consumers, who are using a cloud-based service. Easy to use, $14.95/mailbox.

It’s just IMAP-IMAP email, no address book or calendar migration services. No, it doesn’t even migrate Notes apps.

… David Ferris

Archiving vendor has recently had a couple of small financings:

• $3M of equity in June, 2009
• $4M of debt in November, 2009

Mimosa has never made a profit, and the recession of course has made fund-raising harder. We understand an IPO was deferred due to poor results. We understand, too, that Mimosa sought a buyer last year, but the valuations weren’t acceptable to management.

No doubt management is working hard to align revenues with expenses.

We don’t know the details, but presumably the cost of the recent financings has been high. In situations such as this, companies with good technology can find they’re forced into a fire sale buyout. Sometimes a small short-term debt financing is an immediate precursor to a fire sale.

If an acquisition takes place, it is to be hoped that the acquirer will continue to invest in Mimosa’s technology. Sadly, this doesn’t always happen. Many acquisitions end in tears, especially where the purchase was inexpensive.

… David Ferris

NOTE OF DECEMBER 9: THIS IS BEING REVISED PER READER FEEDBACK. WE UNDERESTIMATED THE NEED FOR THE USE OF EXPENSIVE STORAGE. FURTHER INPUT WELCOMED

Concern is sometimes expressed about the cost of Exchange 2010 storage:

• Users will have large mailboxes. 5GB to 20GB will be common. Take 10GB as a typical figure, allowing for three years of mailbox growth
• Then factor in some multiplier, perhaps 3 or 4, to account for the optional features of Database Availability Group. The multiplier could be much larger, but most organizations won’t go for maximal bloat
• So the average storage will commonly be around 30GB per mailbox

In short, user mailboxes are set to get substantially larger.

This will translate to many administrative challenges, but cost is unlikely to be one. At today’s prices, 30GB costs from $2 to $30, depending on the storage type. Amortize that over three years, makes $0.66 to $10 per mailbox per year. $10 is an absolute maximum, most storage will cost much less than this. Some of this storage will replace local storage used to keep PSTs. Looked at on a per-user basis, the cost of storage for Exchange 2010 are trivial.

… David Ferris

There are different approaches to sharing documents, where a group of people want to be able to make comments on a document and alter it.

One approach is Track-Changes, which we’re all familiar with in MS Word. This is very useful. But then, after three or four sets of changes, it gets too confusing. The Track-Changes approach is best between two people; it does a reasonable job of letting you see what changes have been made.

Another approach is one we’ve just been looking at, that of SharedDoc, from SharedBook. Here, someone owns/controls a document. Other people can post responses at arbitrary points to comment on the content. Subresponses of arbitrary depth are allowed. Here, comments aren’t applied, unless the owner specifically decides to allow them. Reviewers must be specifically selected by the owner. This is another approach valuable in a variety of contexts where one seeks reviewer input, such as proposals, legal services, business documents, and publishing. SharedDoc is in beta, by the way, and is currently free.

Some other approaches to editing shared documents include:

• Wikis, where people can go in and make changes directly, with an audit trail of the changes. You find this approach in Google Wave.
• Content management-style versioning. You also find this in SharePoint, for example.

… David Ferris, with thanks to SharedBooks’ Caroline Vanderlip for her interesting insights

Conferencing technology--such as Cisco WebEx and Microsoft Live Meeting--has two approaches to the audio element. You can route it over the data network, or you can route it over the conventional telephone system (”PSTN” or “Public Switched Telephone Network”).

In principle, it’s much better to treat the audio as just another data type for the conference and route it over a data network. This makes things much easier for users, because you can have tight integration with the conferencing application. No remembering and entering phone numbers, for example. And usually cheaper.

Internally, companies often run the audio part of conferencing over their in-house data network, because their internal network is fast enough and delivers data in a timely way. However, where participants must connect over public data networks, notably the public Internet, it’s common to fall back on conventional telephony, because voice transmission over public data network connections often is not quite good enough for the audio part of a conferencing session (even though most of us have experienced pretty good voice quality at times via Skype).

There are two reasons for this audio-over-Internet shortfall:

• Voice over IP technologies like Skype convey voices much less well when several people are chiming in and even talking over one another--as quite often happens in a conferencing session — than they do for a one-to-one conversation
• Conferencing behavior is very sensitive to slight delays in delivering the voice signal voice, known as “latency”. In the public Internet, there’s lots of latency, long and variable, as individual packets of data are delivered via widely varying routes through the network. For a discussion via electronic conferencing, that means all those subtle unwritten rules--about when and how it’s OK, or not OK, to chip in and interrupt--get really disrupted. Users find that very unsettling

When will the public Internet be good enough so that it’s the default for the audio element of conferencing? Our current guess is around 2014 in most rich countries. In other places, probably quite a bit longer than that. Could be 2040 in some places.

However, that only applies to users who depend on the public Internet, with its best efforts/no promises level of Quality of Service (QoS). More and more businesses are buying Wide Area Ethernet services from telephone companies. Those are IP networks, like the public Internet, but unlike the public Internet they use quality-enhancing techniques like MPLS that reduce latency, lost packets and other QoS problems. Users of such services will likely be able to realize the full benefits of routing both the voice and data parts of a conferencing session together over a data network, long before it becomes the usual method for users who rely entirely on the public Internet.

… David Ferris, with thanks to Michael Tyler for his helpful input

Today, PC-based conferencing vendors such as Cisco, IBM/Lotus, and Microsoft tend to focus on PC-centric innovation. Eg., support for multi-person video cameras, integration with PBXs, integration with desktop applications.

However, I think the biggest innovations, starting perhaps in 2012, will be found among mobile phones. These will have sufficient bandwidth and computing power to compete with desktops. However:

• Their user interfaces are severely constrained
• They are always with the user
• They have, or will have, location awareness
• They will have plenty of other very innovative aspects

Thus the exciting conferencing developments will, several years hence, turn around mobile phones.

The phones will remain small so that they can easily fit in a pocket. Obviously they’ll continue to get thinner. Innovation--in ways we don’t imagine--will help us get by with small screens. Presumably, videocameras will often be built in.

… David Ferris

Desktop sharing is a useful component of conferencing technology. Its main uses are:

• Document sharing, so people can work on spreadsheets, word processing documents, and so on, at the same time
• Informal peer-to-peer help desks and training. Where you show someone how to do something

… David Ferris

PS. I’m not sure I’m saying anything useful here! But I hope someone finds this useful.

Cloudemail101.org is a useful website that compares cloud-based email offerings. Cloud archiving vendor LiveOffice is behind it.

… David Ferris

P.S. Sometimes concision is a virtue.

For the last 10 years, the electronic conferencing world has tended to focus on high-end solutions such as those from Polycom. Think of special conference rooms, expensive WAN links, special equipment, and so on.

Over the last five years, PC-based solutions have been evolving. IBM/Lotus has been an innovator. Microsoft has gradually been building a position through Office Communications Server and Live Meeting. Ditto Cisco, around WebEx.

It’s clear that PC-based solutions will dominate this market before long. They are much cheaper and are simpler to use, both from the user and the IT standpoint. PC-based will be constantly improving and constantly eating in to high end systems’ capabilities. Video images will be of ever-higher quality, for example.

My hunch is that not merely will high end solutions be marginalized, but they will also be driven out of business. There will be a market for high-end conferencing solutions, but they will be based on commodity PC technology.

Microsoft overall has the advantage in this market, because it can provide the most user- and IT-familiar technology. Expect strong competition from Cisco over the next few years. Hopefully, the competition from IBM/Lotus will also be strong: it has much going for it.

… David Ferris

Here’s an update on the law suit between ZL Technologies and Gartner.

By way of background, in October email archiving vendor ZL Technologies filed a law suit against Gartner asking for $1.7B in damages caused in part by the Gartner Magic Quadrant. The story is very interesting from several points of view:

• It raises the issue of the influence, good or bad, that reports like the Magic Quadrant have on company fortunes
• It raises the question of whether the reports are as objective and valuable as they purport to be
• It’s a “David” vs. “Goliath” struggle, as the small ZL takes on the much larger and very influential Gartner

The news just came out that the judge dismissed the law suit and gave ZL 30 days to amend its compliant. The judge agreed with Gartner’s view that the report is an opinion, not facts. But the judge left the door open for ZL to amend its motion and try again. The response from ZL owner Kon Leong suggests he intends to do that.

… David Ferris

Cloud archiving vendor LiveOffice announced it now supports most of the important cloud-based email offerings:

• 123Together
• AppRiver
• Apptix
• Azaleos
• Cisco WebEx Mail
• Google Apps (Premier)
• groupSPARK
• Intermedia
• Microsoft Exchange Online
• PanTerra Networks
• USA.NET
• Yahoo! Zimbra
• Other POP/IMAP-based solutions
• Personal Email Accounts (e.g., Gmail, Yahoo! Mail, Windows Live HotMail)

This is quite interesting, in that it can help migrations from on-premises mail servers (Microsoft Exchange Server, IBM Lotus Domino, Sendmail) to the cloud or from one hosted provider to another:

• LiveOffice’s archive will help on-premises and cloud-based Exchange services co-exist, during proof of concept and migration (think of it as a low-risk way to step into the cloud)
• It helps customers be less locked into a given email vendor, because the archive makes migration between the various offerings (on-premises and hosted) much simpler

Until 18 months ago, LiveOffice was mainly known for its financial services archiving solution and Hosted Exchange offering. The announcement confirms that the main focus of the company is now hosted archiving for financial services and non-financial services organizations alike.

… David Ferris

Microsoft’s SaaS versions of Exchange/SharePoint/OCS have been out for a year. Here are some updates:

• BPOS (the bundle of Exchange, SharePoint, OCS, and Live Meeting) has a million paid seats.
• Largest customer is Glaxo Smith Kline, with 100,000 seats.
• Microsoft continues to prefer to deliver via business partners. They get 12% of the initial sale, and 6% of ongoing revenues.
• Currently sold into 20 markets. In addition, it’s being trialed in 15 new countries (e.g., Czech, Greece, Malaysia, Taiwan, Chile, Brazil).
• A new data center will open in Brazil in 2010. That will make a total of seven data centers throughout the world.
• Every 90 days substantial enhancements are added.

Pricing:

• Hitherto, the bundled mix of Exchange/SharePoint/OCS and Live Meeting was priced at $15/seat/month. The price is now reduced to $10/seat/month. However, there was a semipermanent 30% promotion in place, so the reduction isn’t as material as it might appear.
• Exchange Online Standard has gone from $10/seat/month to $5/seat/month, a big reduction. This will have material impact on competition.
• Office SharePoint Online Standard has gone from $7.25/seat/month to $5.25/seat/month.
• Office Communications Online has gone from $2.50/seat/month to $2/seat/month.
• The Web-browser-only Exchange/SharePoint version is still $3/seat/month.

These online offerings are very strong and very attractive. We continue to be impressed. Sales are still in their very early days. The main competitors for the foreseeable future are:

• On-premises versions of Exchange/SharePoint/OCS
• Cisco and Google

The SaaS offering from IBM/Lotus is some way from being a major threat; we look forward to this situation changing.

… David Ferris

Today, November 9, Cisco is launching its email SaaS, Cisco WebEx Mail. This is important. The offering has a reasonable chance at giving Microsoft substantial competition in the messaging and collaboration space. In short:

• Can use Outlook 2003 or Outlook 2007, or Outlook 2010 as rich client
• Cisco-provided web browser client also available
• Outlook compatibility is extremely high due to reverse engineering of MAP. Eg includes notes, tasks, group scheduling etc. No plugin required
• Has large mailbox: 5GB and 25GB
• Based on PostPath acquisition
• Good anti-spam and anti-virus included (result of IronPort acquisition)
• Support for ActiveSync, Blackberry

Plans are underway to provide a rich, and innovative, integrated suite of collaborative applications. These encompass:

• IM, voice, presence, online meetings, team workspace, social and work directory, social networking, news, blogs
• Web client, Inbox-centric architecture
• Prototypes are in place today; overall vision is evolving

Pricing was not revealed to us and will be announced today. However, note that Exchange Online is now $5/seat/month, and Google Apps either free or a little over $4/seat/month for the Premier Edition.

Currently, Microsoft Exchange dominates corporate email. This needs stiff competition, for the good of everyone. Google Apps may become stiff competition. The market share of on-premises Notes/Domino is gradually shrinking, and the SaaS offerings from IBM/Lotus are not yet strong enough to give Microsoft any grief. We are thus excited by the launch of Cisco WebEx Mail. It has real potential to give Microsoft a hard time. We hope it does: competition is good for all of us.

… David Ferris