Outsource Email Services

While email has greatly enhanced the communication and transaction capabilities for colleges, much of the potential savings associated with reduced transaction and communication costs are not being realized. In-house email systems are increasingly expensive to maintain, given the maintenance, storage and security requirements. These costs can be significantly reduced by outsourcing campus email services to external providers, such as Google or Microsoft, which can offer enhanced off-site security and storage capabilities at a much lower cost due to technological expertise and much greater economies of scale.

The Benefits of Outsourcing Email

The primary benefit for colleges who outsource their email services is that it reduces their costs compared to maintaining an in-house system. There are also a number of additional benefits that can be achieved by outsourcing email, including expanded features and technological expertise.

Reduced Cost

A 2009 Forrester Research report concluded that many businesses significantly underestimate the full cost of email. The report indicates that the “fully loaded” cost of email includes not only hardware and software expenses, but also storage, filtering, archiving, staffing, financing, power, and opportunity costs. Forrester surveyed 36 IT executives from US and European firms who estimated an average cost of $10 per month per email user; however, Forrester’s analysis placed the full cost of in-house, or internally developed and managed, email between $16.59 and $28.22 per month per user, depending on the number of users. The fact that 41.1 percent of colleges decided not to outsource their student email services in 2008467 suggests that institutions of higher education also significantly underestimate the cost of managing an in-house email system.

An alternative to having every college develop and maintain its own email service is to outsource it. The Forrester report also estimated the user cost per month for several email outsourcing services, including Microsoft Exchange Online, Google Apps and a general cloudbased outsource category, in providing a comparative analysis of business email services. This analysis of email services indicates that outsourcing email services is much less costly than maintaining an on-site email system. The savings associated with outsourced email are reductions in costs for storage, staffing, servers, message archives and filtering services.

While Forrester’s analysis pertains to private businesses, similar cost savings could be realized by colleges that outsource their email services. By doing so, colleges can reduce their need for data storage and servers, as well as IT staff needed to service campus email systems. Figure 19.1 displays the estimated user costs per month of maintaining an in-house email system versus outsourcing it to Microsoft, Google or other cloud-based providers, using Forester’s private business data and assuming that subscription costs are zero for Microsoft and Google because they both offer free email services to schools via their Microsoft Live@edu and Google Apps’ Education Edition platforms, respectively. While the actual savings likely will vary among colleges depending on the number of email users, the Forester analysis suggests that significant savings are possible by outsourcing email services. One recent example is Temple University, which transitioned most of its faculty and administrators from an in-house email system to Google mail in spring of 2009, and reported savings of about $1 million by the following fall semester.

Figure 19.1: Estimated User Cost Per Month by Expense Category
Figure 19.1: Estimated User Cost Per Month by Expense Category

 

Additional Benefits

In addition to the reduction of costs associated with maintaining an in-house system, outsourcing email confers additional benefits. First, web-based email services offer additional features that colleges cannot afford to build, maintain, and upgrade on their own. For instance, Google Apps Education offers additional tools to enhance campus communication and collaboration, such as messaging, a calendar, document sharing, group forums, and mailing lists. Many students and faculty already use such services, so the transition from a campusbased email infrastructure to an outsourced service would involve only a minor learning curve.

Additionally, colleges that outsource email services eliminate the problem of having to renew or update software and security features. Firms specializing in email services are on the cutting edge of technology and generally will automatically install and run the most up-to-date software and security upgrades for their clients. This reduces the risk of security breaches and viruses. Outsourcing email also has a number of other benefits, such as rapid addition of new users to the system, the allocation of IT professionals to more important projects and the shifting of the financial burden from upfront capital expenses to ongoing operating expenses.

Colleges Are Hesitant to Outsource Email

Some of the more innovative colleges have already taken advantage of the many benefits associated with outsourcing their email, but the majority of colleges remain complacent. The 2008 Campus Computing Project Survey indicated that 42.4 percent of institutions of higher education have either converted to or are in the process of converting to outsourced student email. The figures are less impressive in terms of staff email outsourcing, in which only 14.8 percent of institutions reported having converted or being in the process of outsourcing faculty email.

Public research universities were the most likely (50.7 percent) to outsource student email, and private research universities (23.3 percent) are the most likely to outsource faculty email. Research universities have the largest number of email users, yet this category of schools is more likely to outsource email.

Regulatory compliance is often presented as an argument for not outsourcing email. The most common variant relies on the Family Educational Rights and Privacy Act (FERPA), which requires schools to safeguard student records such as personal information and grades. The law permits colleges to outsource student records to a third party, but prohibits such a party from using the records for any purpose other than that which the college would. Some officials worry that email communication between students and staff will be mined by third parties to fine tune their search algorithms, thus violating the act. To alleviate these concerns, providers such as Microsoft and Google have added language to their contracts with colleges to address how their policies conform to FERPA, in addition to providing administrative features designed to protect student records.

The other major regulatory concern is electronic discovery – the process in which colleges must review their email and other digital records when a subpoena is issued during legal proceedings. The issue is whether college officials would be able to retrieve email messages in a timely manner when faced with a court order, and whether they are in a position to shield such records from discovery in certain cases, if email services are outsourced. Technology firms such as Google and Microsoft are experts at archiving and retrieving messages, and would likely provide unbiased compliance with court orders.

Conclusion

Colleges have a tremendous amount to gain from outsourcing their email services, most notably reduced costs. Providers such as Google and Microsoft offer free email accounts for students and staff, as well as a number of additional user tools to improve communication and collaboration. Such providers also offer a number of ancillary pay-for-service features, such as message archiving and filtering, which are generally more cost-effective and effective from the user standpoint than could be obtained by managing such functions in-house.