Study: E-Mail Providers Missing Out on Mid-Level Market

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Hosted e-mail providers are missing out on the medium-sized business market, says a new study released yesterday.


The Radicati Group, Palo Alto, CA, found in its study of hosted business e-mail providers, ISP/Webmail providers and mobile phone e-mail providers, that only 29 percent of hosted business e-mail accounts are medium-sized businesses, organizations with 500 to 5,000 employees.


Seven percent of all accounts are large businesses. Most -- 64 percent -- are small business customers, companies with fewer than 100 employees, leaving a gaping hole in the mid-level market.


The predicted hosted e-mail market growth is another reason to go after the mid-level market. Though there are 856 million hosted e-mail accounts today, Radicati expects that number to jump 69 percent to more than 1 billion by the end of 2009.


"There were a lot of small providers catering to small business, with very basic e-mail services, then there were others catering only to very large businesses. So the mid-range market has been somewhat neglected and has traditionally done their own [e-mail solutions]," said Radicati president/CEO Sara Radicati.


However, now that businesses have more regulatory and security concern, hosted e-mail providers have a much greater opportunity to snare the medium-sized business market, she said.


"As things get more complicated because of security concerns, because of the need to archive, compliance and so on, more of these mid-range customers are beginning to look around for outsourcing solutions," Radicati said. "Providers that offer these bundled, more sophisticated services [security and compliance features] have a very good market opportunity."


Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


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