Question

Everybody knows that email is important, but should each company develop, own, support, and maintain its own email infrastructure, or should it instead use lower-cost or free services? That is the question that Michael Jagger, CEO of Provident Security, faced as he contemplated a costly upgrade of the company’s internal email infrastructure.

Founded in 1996 by Michael Jagger as a way to pay his undergraduate tuition, Provident started out as a company that provided special event security. Today, it has grown to become a full-service security company with more than 4500 customers and 200 employees. Offering a wide range of services for residential, commercial, and industrial clients, Provident is organized into three divisions: guard services, alarm services, and special event/personal protection. Guard services offers uniformed security guards and specializes in high-tech and pharmaceutical markets; it also offers community and mobile patrol services that guarantee a five-minute response to burglar alarms and client emergencies. The alarm services division installs, services, and monitors alarm systems for residential and industrial clients, including sophisticated closed circuit television (CCTV) and access control systems for the high-risk buildings of clients such as the federal government. The special event/personal protection division provides security for many important public figures, including elected officials and business leaders.

The company’s email system was based on Microsoft Exchange/Outlook and completely managed by the company’s small but effective internal information systems staff. After an increase in volume, however, the system was beginning to show signs of strain. In addition, recent analysis indicated that to cope with projected growth, Provident would have to invest a further $60 000 in a combination of hardware and software upgrades and operating expenses.

To combat this expense, one employee suggested that Provident convert its internal email to Google’s $50-per-user corporate G-mail service. This service was very similar to Google’s popular consumer email system and could be accessed from any Web browser, which meant that it required no hardware or software and was available anywhere. And not only was the service comparatively inexpensive, but it allowed Provident to maintain its existing email IDs and it integrated easily into other popular and useful Google applications, such as Google Docs and Google Calendar.

A few other organizations had already converted to G-mail, and as he considered whether to authorize the increased expenditure or not, Michael wondered whether it was time for Provident to get out of the email business.

Questions:

11-1 What are the benefits and risks that Provident faces when considering maintaining its own email system or moving to another service, such as G-mail? (Hint: How much control do you have when you use free Web services, and how are those services funded?)

11-2 How is email different, if at all, from other technology or nontechnology services, such as telephone systems or regular mail? (Hint: How differentiated are these services, and are there various levels of service?)

Answer 1

Answer 11.1 A. Benefits for Provident for considering maintaining its own email system:

1. 100% dependency on in-house IT team.

2. Direct control over email service behavior such as introducing a new feature, removing obsolete and older email options, advertisement control, etc.

3. Earn incentives on auctioning premium and most sought email address.

4. Power of monitoring network behavior and demands of specific regions and strategies business plans accordingly.

5. Selling goodwill of in-house managed email systems and securities to clients and customers.

B. Risks for Provident for considering maintaining its own email system:

1. Cost of scaling up email services is very high.

2. Maintenance and running email services is a very resources demanding business.

3. Safety and risk monitoring requires an extra level of expertise and highly qualified professionals.

4. Running other security services along with email services requires most of the capital for email maintenance services.

5. Risk of strain during scaling up the operation of email and current demand conditions.

6. Non-compatibility of various browsers in the market.

7. Dependency on particular email infrastructure and resources providers.

Answer 11.2 The email services are different in the following ways from the other modes of services:

1. Email services are way too fast and emails are delivered at almost speed of light.
2. Email services are not limited by the size and length of the contents of the email.
3. Email services are limited to transfer only information but fail in case of hardware and physical goods.
4. Email services are IT-dependent and require knowledge of email operation and basic computer functionalities.
5. Email data can transmit video, audio, text, etc. but other medias such as telephones are designed only to transmit voices.