The decision by free Web mail providers like Hotmail and Yahoo to start charging for a premium service has opened the door for Internet service providers worldwide to profit from offering premium e-mail services.

by ISP-Planet Staff [January 10, 2002]

At least one software maker contends that e-mail remains the so-called "killer app" of the Internet. Based in Silicon Valley, Rockliffe is happy to see the number of global e-mail boxes increase. One research firm predicts that total global e-mail boxes will to grow to 1.2 billion by 2005.

As a high-end e-mail and messaging server software vendor, Rockliffe believes that the recent moves made by Yahoo and Hotmail instituting fees for formerly free services opens the door new revenue streams for e-mail service providers, like ISPs.

Alun Davies, Rockliffe European director, said that the revenue potential for e-mail services is significant, even if the cost is as low as $1 per mailbox, because bandwidth demands are on the rise.

"E-mail may not be sexy but it can be profitable," Davies said. "E-mail is the primary reason why people want Internet access and as consumers become more net-savvy they become more demanding."

Adjusted expectations
According to studies done at the end of 2000, Hotmail was one of the largest free Web mail service providers with more than 85 million registered users. But when it comes to Web-based services, popularity does not necessarily translate into profit.

The explosion of digital camera use and MP3 music file swapping cost Hotmail a fortune in bandwidth. Consequently, Hotmail instituted a transport limit of 2 Mb for users. For just $12.95 a year, Hotmail will increase user's transport limits five-fold to 10 Mb. If every Hotmail user opted to pay for upping their file size limitations, Hotmail would make more than $1.1 billion a year.

But Rockliffe's Davies contends that free and fee-based users have different expectations. When subscribers have to pay a fee, they will demand much higher levels of service than are currently available from many free Web mail providers.

According to Rockliffe, this represents a revenue opportunity for ISPs that can provide high-quality Web mail services. As a matter of fact, the software maker has some advice for ISPs thinking about introducing premium Web or e-mail services. Rockliffe's checklist for establishing successful premium e-mail services includes:

• High Availability: Subscribers who cannot easily access their paid-for e-mail will simply stop paying and move their account. ISPs will need to review their e-mail infrastructure and add resilience where required.
• Secure Service: Subscribers will not want to pay for extra storage space that quickly fills up with unsolicited e-mail or automatically propagated viruses. ISPs will need to offer anti-spam filtering, anti-virus filtering and content scanning.
• Technical Support Services: Paying subscribers will demand the ability to communicate problems at any time and will expect to be provided with 24/7 support services.
• Billing Integration: To benefit from paid-for subscriptions, ISPs will need to be able to integrate their e-mail infrastructure with billing and customer relationship management (CRM) software.
• Feature Rich: Paying subscribers have the right to expect a feature rich e-mail service that includes POP3, IMAP, Web mail, mobile device access, forwarding, auto-responders, signatures, and aliases.

Service review
Naturally, Rockliffe software can provide service providers with this litany of enhanced e-mail services. The company currently has more than 3,000 customers hosting more than 12 million mailboxes worldwide. These include leading ASPs such as Digex and Intel Online Services, unified messaging providers like Call Sciences, and large enterprises including AT&T and Cambridge University.

Rockliffe offers a range of solutions e-mail services including:

• SMTP, POP and IMAP e-mail hosting
• Webmail hosting
• Permission-based e-mail marketing
• Secure relay and routing for Internet messaging
• Online discussion groups
• Wireless access to e-mail

These software products are available under Rockliffe's MailSite service solutions for standards-based Windows, Linux, and UNIX mail servers. Prices vary with the scale and nature of the e-mail service required.

Rockliffe's unified messaging solutions include:

• Delivering faxes by e-mail
• Sending faxes by e-mail
• Delivering voicemail by e-mail
• Accessing e-mail by telephone
• Converting e-mail and sending as an SMS message
• Converting e-mail and sending as an electronic page

Rockliffe presents a rather compelling argument. Maybe it's time for you to take a look at your ISP's service offerings to see if your business could profit from charging fees for what it once offered for free.

—End