Microsoft repackages e-mail hosting service

Microsoft has renamed FrontBridge Technologies' hosted e-mail technology as Exchange Hosted Services. It includes services for antispam, archiving, encryption and disaster recovery.

Nearly eight months after acquiring FrontBridge Technologies Inc., Microsoft has rebranded the service and issued a roadmap for its hosted messaging and archiving product.

Now called Exchange Hosted Services, Microsoft is selling hosted Exchange through service providers. Complimentary services include Exchange Hosted Filtering, Hosted Encryption, Hosted Continuity and Hosted Archive. Microsoft is aiming at the mid-market -- 500 to 5,000 seats -- for Exchange mail services and archiving and at large enterprise shops for antispam and filtering technologies.

"This is just step one of Microsoft and the Exchange team digesting FrontBridge," said Matt Cain, an analyst at Gartner Inc., in Stamford, Conn. "They want the branding consistent with Exchange and they're trying to associate the FrontBridge hosted service with Exchange."

Exchange Hosted Filtering and Exchange Hosted Encryption will continue to support multiple e-mail platforms, including IBM/Lotus Domino. But Exchange Hosted Archive and Hosted Continuity will work exclusively with Exchange, Microsoft said.

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One current customer using IBM/Lotus Notes/Domino is Sony Pictures Entertainment Inc. (SPE). SPE, a division of Sony Corp., uses the service for spam, e-mail archiving and content filtering for about 6,000 employees. It is the sole division within the Sony Corp. using IBM/Lotus Notes/Domino.

When Microsoft purchased FrontBridge, Jason Spaltro, executive director of information security at Sony Pictures Entertainment, said he was initially concerned about, first, having a company the size of Microsoft take over and having the close personal contact with FrontBridge diminish, and second, that it would back away from IBM/Lotus Notes/Domino customers.

FrontBridge was located down the street from us and we had good access to the executives and the technical folks, Spaltro said. "But Microsoft retained many FrontBridge executives, which gave me assurance that they were approaching this acquisition carefully," he added.

Microsoft assured Spaltro that its intent was not only to develop some services that were tailor made for Exchange but also to have robust services for other messaging shops. During the next 24 months, however, it's likely that Sony Pictures Entertainment will move to Exchange Server to complement the other Sony divisions, so it won't have to worry about switching to another service.

What's driving Hosted Archiving

Government regulations are the main driver for growing interest in archiving services, particularly in the pharmaceuticals and financial services industries. According to Forrester Research Inc., the advantages of a hosted archiving service are that no software installation is needed, no internal IT staff is needed to intervene, the vendor has a 24x7 data center, costs are predictable and the vendor is usually running the most recent versions of software.

The disadvantages are that there is a perceived loss of control over privacy and intellectual property, customers are dependent on external network connections for access, they depend on a third party for uptime and there is the potential for latency in e-mail retrieval time.

In January, Forrester Research compared Microsoft Hosted Exchange message archiving services with those of FivePoints Compliance, Iron Mountain, LiveOffice and Zantaz -- and all of them came up short, most significantly with respect to mailbox management. Mailbox management refers to the ability to offload the mail server to less expensive storage media and let end users access items in the archive based on permissions and the company retention policy.

Since the comparison, however, Zantaz integrated that feature with its hosted service, according to Erica Ruguilles, an analyst in Forrester's Cambridge, Mass., office.

Ruguilles said Microsoft has the overall largest market presence and the strongest strategy, which is to integrate its service with Exchange and other Microsoft collaboration products. As of January, FrontBridge has more than 270 customers, with almost 80% signing on in the past 12 months, according to Forrester. Iron Mountain Digital Archives is the next largest in terms of customer count, with about 230 customers.

In general, Microsoft's message archiving is being absorbed into records management and enterprise content management. "This gives the potential to treat e-mail as just another record that can have policy applied to it," Ruguilles said.

Microsoft said pricing for Exchange Hosted Filtering is $1.75 per user, per month. Pricing for Exchange Hosted Archive is $17.25 per user, per month. There is an unlimited retention period and 3.6 gigabytes per user. Pricing for Exchange Hosted Continuity is $2.50 per user, per month. Exchange Hosted Encryption is $1.90 per user, per month.

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