ircuit City Stores Inc. last week said it has signed a deal to outsource its e-mail requirements for the Web-based training of 60,000 sales associates at its 600-plus stores. The deal between the electronics retailer and San Francisco-based outsourcer Critical Path Inc. is by far the largest e-mail outsourcing deal implemented to date, said Dave Nelson, a senior industry analyst at Giga Information Group Inc. in Cambridge, Mass. But Circuit City is by no means alone.
Increasing numbers of large corporations are turning to outsourced, Web-based e-mail to get new groups within the companies online quickly and cheaply, or to communicate with partners.
Insurance firm AFLAC Inc. in Columbus, Ga., for example, signed an agreement last week with WorldCom Inc. in Clinton, Miss. Under the deal, WorldCom, acting as a reseller for Critical Path, will host Web-based e-mail for more than 28,000 independent agents.
In the case of Richmond, Va.-based Circuit City, the retailer will keep its internal e-mail on Lotus Notes software, said CIO Dennis Bowman.
The ability to use Notes off-line is “a huge advantage for our mobile sales force,” Bowman said, but he added that the Lotus software is “too robust” for Circuit City’s training program.
When the firm sourced an e-mail system for the program, it “almost staked out a position that was at the other extreme from Notes,” Bowman said. He noted that the training program doesn’t require add-ons like calendars and knowledge management tools that are incorporated in Notes and Microsoft Corp.’s Exchange.
Cost was another factor, he said — and for good reason. According to a recent study conducted by The Radicati Group Inc. in Palo Alto, Calif., Exchange costs $30 to $40 per user for Fortune 500 companies that install it in-house. Using Exchange through an application service provider (ASP) drops the cost to $20 per user, said Radicati President and CEO Sara Radicati.
ASP services “usually provide access to a great deal more applications and functionality than just a Web client,” she noted. Web e-mail only costs around $5 per user, but the service it provides is very basic.
In late July, Bank One Corp. in Chicago contracted with messageREACHSM, a division of Xpedite in Eatontown, N.J., to handle Bank One’s outgoing business account information via e-mail.
For Bank One, the savings gained through outsourcing e-mail stem from the fact that it only has to pay for what it uses on messageREACHSM servers rather than having to buy and install the equipment internally. “It really wasn’t economical for us to make that kind of investment,” said Len Goodman, first vice president at Bank One, adding that the system can scale up as needed.
“E-mail outsourcers have begun to prove themselves,” said Nelson. “With major upgrades coming along like Exchange 2000, [firms are] looking at outsourcing instead of updating.”
Other big corporations that have outsourced some e-mail requirements in the past year include United Air Lines Inc., working with USA.net Inc., and McDonald’s Corp., whose partner is United Messaging Inc.
Copyright © 2000 by Computerworld, Inc., Framingham, MA 01701. Posted from COMPUTERWORLD.
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