This company offers a wide variety of e-mail services for ISPs with small business customers.

by Alex Goldman ISP-Planet Managing Editor [June 22, 2005]

If you read ISP-Planet, you will read article after article saying that the key to survival is value-added services. Value-added services give ISPs extra revenue and help keep customers happy, which are the two keys to ISP survival. You don't need an FAQ from BlueTie to tell you that increasing ARPU is a good thing.

Pittsford, N.Y.-based BlueTie is a messaging company that specializes in upgrading e-mail by adding messaging and collaboration as well as the security offered by anti-spam, anti-virus, and more.

David Koretz, BlueTie president and CEO, sees Microsoft as a key competitor, saying, "we believe Microsoft Exchange is not a good fit for a small business."

Koretz says he knows small business. "We were a small business ourselves," he notes. Founded in 1999, the company now claims 450 resellers in the U.S. and Canada, including, he says, former Exchange resellers who have switched to BlueTie.

Small businesses, he says, don't have a large, dedicated technical staff, and don't want to deal with the hassle of installing Exchange, plus Barracuda for anti-spam and Symantec anti-virus. Instead, they can rely on the solution that BlueTie provides that puts it all in one package.

For ISPs, the key sales point is Average Revenue Per User (ARPU). For a small business customer, Koretz says an ISP can charge $5 per person per month, so a 15 person small business generates $75 per month. The numbers start to add up. "It's about equal to the telco revenues from that business," Koretz says. "We give our ISP customers 60 percent margins. It's logical for them to be the ones selling e-mail services because they already offer e-mail to their customers."

In the past, the company was more focused on working with integrators as channel partners (the company has a direct sales channel too). But ISPs, CLECs, and ILECs started paying attention when the company published its own churn rate: 3.4 percent per year. "Telcos hear that number and think we're talking per month," enthuses Koretz.

Even the biggest companies need to offer more, because of the success of Gmail, Yahoo!, and Hotmail. "They're offering less than what people can get for free right now," says Koretz. "When free offerings are ten times or one hundred times better than what you're paying for, that's frustrating. The positive part of all of this is that the service providers who come to us are the ones that want to serve customers and want us to help them solve this problem."

The offering integrates plenty of features: 10 GB of storage ("we led with 1 GB business class e-mail," Koretz says), anti-spam on the server and client sides, an in house RBL, Bayesian filtering at the user level, and a web client that "feels like a desktop app, with drag and drop and right click and double click."

"I have over 60,000 messages in my 10 GB mailbox," Koretz adds.

Asked about EarthLink's Webmail (see Rich Webmail for Everyone), Koretz says that flash is not the future, that it would limit what the app can do. Some ISPs might prefer flash because it obviates the need for an application.

Pricing and availability
The product is available now to ISPs. Pricing was not disclosed.

The company also has a direct sales channel.

A business class e-mail and collaboration suite is available to large service providers on a license purchase basis.

—End