Layne founded United Messaging in May of 1999, with the sole purpose of
providing dedicated and focused outsourced electronic messaging services
to the corporate market. United Messaging started with seven employees
with a first round venture capital funding of $5 M (USD) and has grown
to over 102 employees with a second round venture capital funding of $31
Messaging is the only Application Service Provider (ASP) to offer a dedicated
e-mail service. United Messaging's offerings include Internet Mailbox
Service (POP/IMAP) starting at approximately $2 per seat, per month and
for collaborative messaging options, UM offers Microsoft Exchange Server
accounts starting at $12.50 (USD) per seat, per month and will be offering
a Lotus Notes solution by the end of the 2nd Quarter of 2000 (Probability
85%). Pricing for the Lotus Notes offering has not been released, however
we expect the offering to be priced by the end of the 1st Quarter of 2000
United Messaging may be the only dedicated messaging ASP, they are not
alone in the outsourced messaging services market. UM's primary competition
comes from Critical Path, USA.net, Mail.com, and IBM Global services.
Secondary tier competition comes from companies such as Digex and EDS;
additional competition from major players such as AT&T, MCI, and Microsoft
cannot be ruled out.
ASP market is in its infancy and will take approximately 2-3 years to
mature and have a noticeable impact on the internal operations of corporate
Information Systems (IS). The corporate collaborative messaging market
consists of greater than 175 Million client seats with the Lion's share
held by Lotus Notes Domino and Microsoft Exchange with install bases greater
than 50 Million seats each. We believe that within a 3 year time frame,
the outsourced corporate messaging market will capture 25% of the existing
install base, which sizes the ASP Messaging market at 47.5 Million Seats
(Probability 70%). We further believe that due to the nature of United
Messaging's dedicated focus, they have the potential to capture as much
as 3.25% of the ASP messaging market, thereby ultimately hosting approximately
1.75 Million corporate mailboxes (Probability 60%).
Strategy and Trajectory
Messaging has decided to focus strictly within the messaging arena. United
Messaging has started with two offerings, an Internet Mailbox Service
and a Microsoft Exchange Service, with Lotus Notes general availability
expected within the next quarter. By focusing strictly upon messaging,
United Messaging is able to build a robust messaging infrastructure. United
Messaging has assembled a messaging backbone infrastructure which has
raised the bar in uptime, allowing United Messaging to guarantee a Service
Level Agreement (SLA) of 99.5 % (*scheduled maintenance does not affect
Messaging is utilizing IBM servers coupled with Network Appliance Filer
storage systems. The design of the Network Appliance Filer allows "snapshots"
of the messaging server's databases "on the fly". The system can take
a "snapshot" of an 80GB database in 45 minutes while the data store is
in use, with estimated restore time of 2 hours. The additional hour and
a quarter is a result of restoration process and integrity checking. Given
the disaster recovery scenario and the SLA agreement of 99.5%, the configuration
allows for one outage per month.
Messaging plans to host multiple small organizations and up to 3,000 users
per Microsoft Exchange server. UM is able to do this through several components,
first the high-speed disk storage coupled with beefy servers and a software
component called "Mpowered Office Solutions" from a Canadian company
Aliant. The "Mpowered Office Solutions" enables United Messaging to affordably
provide full Exchange services for smaller organizations with less than
500 seats and provide direct customer administration and instant billing
updates for all organizations.
The "Mpowered Office Solutions" segments the Microsoft Exchange containers
and address book views to allow multiple organizations to reside securely
on one machine. If sharing a server is not your cup of tea, United Messaging
is flexible and will accommodate a users request for dedicated hardware,
however the price point will increase.
- Dedicated Focus on Messaging.
- 24 X 7 Support structure with 15 dedicated technical support professionals.
- Strong Hardware from, IBM NetFinity, Sun, and Network Appliance.
- Availability and Reliability with a 99.5% SLA Guarantee.
- Competitive pricing packages, always compare pricing to other messaging
ASPs such as IBM Global Services, Digex, and AT&T to ensure a best cost
- Flexibility in Offerings - will customize upon client request.
- Technical Expertise of Messaging Engineers: Technology Evaluation
met with United Messaging Engineers and found them to be bright, efficient,
well trained, and enthusiastic.
- Disaster Recovery Procedures: have been configured for a maximum outage
of 2 Hours.
- Anti-Virus Control (Included in cost).
- Anti-Spam Control (Included in cost).
- Name recognition. United Messaging must push forward an aggressive
marketing campaign to create brand awareness.
- Immature Messaging Outsourcing Market. The ASP market is relatively
new. It will take time to capture and address the fears and concerns
of Network Managers and Executives.
- Fixed and Stable Pricing Structure. United Messaging is a fairly new
startup and has not set a fixed pricing structure across the board.
The lack of a solidified pricing structure allows a potential client
greater bargaining power when attempting to execute an outsourcing contract.
- Support team has not been "Production Tested". United Messaging has
approximately a dozen clients, which do not fill enough seats to test
the support organization. The support team has received adequate messaging
training and we do not expect serious support issues to arise. However,
as United Messaging grows, so must their support organization.
- Lack of a "Brick-Level" backup and restore system to allow individual
mailboxes to be restored.
- Training New Hires given the speed of United Messaging's growth.
Messaging main problem is simply name recognition, no one knows who they
are. UM must step up their marketing efforts through a combination of
Internet Advertising, Introductory Pricing offerings, and Trade Show Presence.
UM has the foundation poured to take the messaging ASP market by storm,
but visibility will be a serious roadblock if not addressed immediately.
any new or startup organization, the non-technical policies and procedures
behind their offering is yet to be finalized. With three offerings; POP,
Exchange, and Notes, a definitive pricing structure must be set. (Of course,
customization will always impact price points)
support team has not been production tested with large call volumes; we
recommend drills to prepare for the future. If United Messaging blows
the messaging ASP market open, their help desk will be swamped with calls
ranging from questions such as " How do I use a BCC: Field?" to "Help,
I just deleted 3 months of work". UM will also need to increase the number
of dedicated on site support personnel to a ratio of 1000:1.
you have decided to outsource your collaborative messaging, take a look
at United Messaging. They have the infrastructure in place to guarantee
availability and the scalability to meet the needs of any organization
with a need for electronic communication. United Messaging is priced competitively
within the ASP market and has adequate funding to ensure financial viability
for at least 3-5 years, by which time the ASP market will have exploded.
will be able to negotiate better deals with United Messaging through several
- If your intention is to outsource a large number of client seats
(>500) you should be able to drive down the per seat cost on a monthly
basis by up to 20% (Probability 70%).
- If you want to outsource for an extended contract, regardless of
the number of seats you should be able to drive down the per seat cost
by 20% (Probability 70%) on a monthly basis.
have found that organizations consisting of greater than 500 users will
pay more for an outsourced messaging system rather than hosting their
own messaging infrastructure. Organizations under 300 users will benefit
from reduced financial costs and the minimization of administrative headaches.
As mentioned before, United Messaging is not the only ASP offering messaging,
and competition will be tough, however they're focus and direction leads
us to believe that United Messaging should be evaluated when looking to