FRAMINGHAM (02/18/2000) - The next turf war in the messaging market won't be among companies trying to sell extensive on-site e-mail systems, analysts said.
The brewing brouhaha is among application service providers (ASP) who want to host the Exchange networks of big clients, they said.
United Messaging Inc. last week unveiled outsourced e-mail services for Microsoft Corp.'s Exchange Server 5.5. The West Chester, Pa.-based company also plans to support Exchange2000 after it ships this summer.
United Messaging said its offering, called Microsoft Exchange Mailbox Service, will include implementation, administration and management for the messaging hardware and software infrastructure.
Pricing starts at $12.50 per month per mailbox.
Nina Burns, president of Creative Networks Inc. in Palo Alto, Calif., said smaller companies are looking to cut costs by outsourcing e-mail to external service providers instead of implementing and maintaining messaging servers.
"The push to outsourced mail will begin with small and medium-size companies, then move to enterprises with special requirements, like remote users, traveling sales forces, satellite offices and that kind of thing," said Burns.
Jim Maguire, CIO at Centocor Inc. in Malvern, Pa., said he's evaluating a move to outsourced mail for the drug manufacturer's 2,000 e-mail users in order to avoid having to hire a full-time mail administrator.
"It's difficult to acquire and maintain staff for a big mail system," said Maguire. We aren't big enough to have critical mass in e-mail, so we would hire someone that would stay a couple months then leave."
United Messaging officials said the company will focus on organizations with fewer than 5,000 e-mail users.
Boom Expected
Jeanne Schaaf, an analyst at Forrester Research Inc. in Cambridge, Mass., said she expects the hosted application market to boom.
"Hosted applications are breaking into a new market," said Schaaf. "The applications are not new, . . . but the ASPs are taking business applications downmarket to small and [medium-size firms]. They're getting the same applications that large companies buy the license for but are being charged per application and on a monthly basis."
Forrester predicts the application hosting market will reach $11.3 billion by 2003, a dramatic increase from the $900 million in revenue attributed to that market last year.