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Should I Build or Should I Buy? Understanding Email Infrastructure in the Cloud The decision to move email to the cloud can be complex for organizations who want to streamline email operational costs, yet maintain control over their own email architecture. As email is deeply woven into the fabric of most organizations including marketing, customer service, finance, human resources, and corporate departments, finding the right solution that supports the entire organization is a prime challenge with a large sphere of influence in the buying process. The increasing complexity that comes from the growth of email has sparked the rise of hosted email solutions that solve the challenges faced by development teams charged with managing costs. The Q4 2010 Forrsights Budget and Tracker Priorities Survey found that 59% of Global IT executives and technology decision makers said that growing overall company revenue was their top priority while another 54% said lowering the firm’s operating expenses was their priority. To that end, 45% said that they would actively pursue the usage of a cloud based infrastructure to aid in those efforts. However, the trend to move towards the cloud does not end with the enterprise. While some enterprise buyers are holding out due to the sheer size and complexity of their systems, the desire for on-demand services that are flexible and scalable based on need has found significant traction among mid-market buyers, particularly start-ups and SMBs who build systems that are cloud-ready. 62% of SMBs have embraced cloud services, up 48% from the first half of 2012. That number is expected to jump to 73% by early 2013, but although their IT budgets are on the rise, only 26% plan to hire IT staff – a decrease of 31% a year ago. “Email operations is integral to the success of our “We’re more effective than before…It didn’t make business, but it’s not an area in which we want to sense to hire ten email developer gurus, or to dedicate an extraordinary amount of time, money build a datacenter. Email is just a building block and resources. My previous experience with the that needs to be in place. I hadn’t yet built out a challenges of managing in-house servers and deliver- complex email system, but now I’ve got one, and ability highlighted the need to employ outsourced it’s cheap…reduced our team’s cognitive load mail services focused solely on the delivery of our and made it easier to scale hardware...We’re a messages right from the start.” Craig Bloem, higher-functioning company as a result.” Loren Founder and CEO, FreeLogoServices.com Norman, Lead developer at Scoutmob Today, IT professionals must analyze the pros and cons of building and maintaining their own systems versus outsourcing some or all of their email operations to a third party provider. 1Spiceworks, State of SMB IT 2H 2012, http://itreports.spiceworks.com/reports/spiceworks_voice_of_it_state_of_smb_2h_2012.pdf Should I Build or Should I Buy sendgrid.com p2 Source: Spiceworks State of SMB IT, 2H 2012 The Challenges of Email No longer a simple medium by which to send one-to-one communications, email now powers the communication for a series of functions and departments throughout an organization, and is relied upon (far more than any other means like telephone or traditional mailed correspondence) to relay critical information across millions of miles in an instant. Given this, the role of the developer now requires specialties in various aspects of email operations and for new, ever-changing processes to be built that will compensate for the organization’s reliance and usage of email. However, the day-to-day management of email can be a tedious, time-consuming effort whose impact is often overlooked by management. Without executive sponsorship it’s hard to support the broader business objectives of the organization to build revenue generating products. Here’s why: Email is a constant work in progress. As a company grows and becomes more successful, the more critical email becomes to your organization to drive additional growth and reach subscribers. And with increased usage comes new challenges in maintenance, delivery and scalability. These three components keep development on its toes, constantly trying to solve issues to maintain up-time, reliability and consistency as email frequency increases at rapid rates. As such, email becomes a very resource intensive operation requiring dedicated personnel, specialized expertise and a monetary commitment to grow and expand. • Email has many partners. Technology’s growth spurt in the SaaS industry has given way to a number of tools designed to simplify processes and provide access to data more quickly and easily. These email or email dependent providers (CRM’s, MAP, etc.) and other platforms have given rise to a new area of concern – integration. Many of these tools also rely on email to power their systems, but their systems are reliant on you being able to integrate them into your current infrastructure. As a result, development has a new role as an email integration specialist – charged with streamlining and creating efficiencies between multiple platforms utilized by organizational departments wanting to improve results and drive efficiency. These include directories, applications, mobile, security, collaboration tools like team workspaces and web conferencing, and more. Should I Build or Should I Buy sendgrid.com p3 • Email needs to be protected. Email can easily be spoofed which can be a constant battle for developers and marketers who struggle to protect their brand by false claims in malicious email and other criminal activity. Companies need access to tools and services that will help protect their name, brand and reputation. As a result, email authentication through SPF, DKIM and DMARC now becomes imperative to prove and protect your identity. By doing so, ISPs can better identify spammers and prevent malicious email from invading consumer inboxes and destroying trust in your brand. • Email needs to be responsive. As with email security, rapid deployment of upgrades and migrations are happening at a faster clip than in the past. Development has been charged with designing and executing processes that provide access to the latest and greatest as quickly as possible. Additionally, email ties back to a number of operational functions, particularly in transactional email where customers expect rapid communications in response to an action they complete. As these communications become more pervasive and expansive in quantity and nature, email must respond to marketplace changes and continue to deliver on customer expectations despite internal challenges. • Email experts are needed. With these expanding roles, specializations are emerging in the area of delivery, analysis and security to handle the growing complexities of the email landscape. Furthermore, the time that is needed to handle email operations has grown considerably. Organizations that do not have established email experts on staff pull on their own engineering and development resources to fill the gap. As a result, more time is spent managing email and less time is spent on product development and business objectives. • Email costs are changing. Due to the above factors, the cost of maintaining in-house systems has skyrocketed causing developers to seek out hybrid or SasS solutions to cut costs. By outsourcing some or all of their email operations, organizations can see significant savings, thereby increasing market demand and creating an interesting niche for smart companies that fill this need. And while larger organizations usually opt to maintain greater control of their internal systems using more traditional methods, SMBs and startups who are laser focused on rapid profitability opt for outsourced solutions that won’t tax their internal resources. Case Study: CYFE Cloud email proved to be faster and more cost effective than building an on-premise solution. Cyfe launched in January 2012 and quickly acquired over 5,000 active users. Their rapid growth exposed some challenges with their current email system which they needed to remedy quickly. They decided to build their own email system, but in order to do so, Cyfe would have to assign key resources away from product development and direct them towards email management, not to mention the months it would take to actually build their own system. As a result, they put their build plans on hold to explore cloud based email solutions. When they compared the cost of using a third party provider to building their own on-premise infrastructure, they found that building would cost them twice as much as using a cloud based provider including the countless man hours in maintenance and loss of productivity amongst their small engineering team. They realized what they really needed was an outsourced solution that could easily scale with their business, do all the heavy lifting and allow them to focus on enhancing their web application. By employing SendGrid’s cloud based email platform, Cyfe was able to integrate in a matter of hours and provide an email infrastructure that is fully scalable and operates independently without taxing their internal resources. 2 FireEye,Inc, FireEye Advanced Threat Report – 1H 2012, , http://www.fireeye.com/resources/pdfs/fireeye-advanced-threat-report-1h2012.pdf Should I Build or Should I Buy sendgrid.com p4 Outsourcing Email Operations Outsourcing email operations to a third-party provider in whole or in part is trending upwards, particularly for organizations that want to focus their development resources on product development rather than email management. No longer can they afford to dedicate valuable engineering resources to the care and feeding of email – a task that requires expertise in a variety of areas from security and deliverability to compliance and maintenance. Because of these pressures, development teams require solutions to relieve them of cost, complexities and associated redundancies inherent with on-premise email management.

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