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Interest in Cloud-Based Email Infrastructure Grows by 35% in 3rd Quarter of 2016

Cloud-based interest in email infrastructure trended up this past quarter. Port25, a Message Systems Company, tracks cloud-based interest (CBIs) among large volume senders based on evaluation and purchase requests received, in conjunction with overall site engagement. In Q3, CBIs on Port25’s website grew by 34.97% over Q2, to a total of 48.2% of unique evaluation and purchase requests. Essentially half of all visitors who made inquiries at the www.port25.com site were interested in learning more about cloud-based infrastructure for email.

Port25’s CBI number has been hovering around 38% of unique evaluation requests since Q1 of 2015 , so this uptick represents a significant upward spike in interest in cloud solutions. This mirrors general industry trends, which place public cloud services on a trajectory to grow 17% in 2016 over 2015. This growth represents a 22% increase in SaaS and a whopping 43% growth in infrastructure as a service (IaaS).

To arrive at our trend numbers, we placed data from unique inquiries into five different volume bins, based on a client’s maximum email messages per hour: less than 10K, 10K-50K, 50K-250K, 250K-1M, and 1M+. The 1M+ category includes some very large senders, since Port25 has customers who send more than 1B emails in a given 24-hour period.

Every visitor in this data set completed a minimum of two and a maximum of nine events per session. The data has been normalized by placing visitors into event bins 2 through 9. Each event includes an action such as a knowledge base download, form submission, support request, button click, etc.

The number of users who opted-in to receive cloud-based information rose most among smaller senders. In Q3, 31.34% of visitors who expressed interest in CBI fell into the volume bin of less than 10K per hour, while 25.36% of requests were generated by senders who mail 10K-50K per hour. Among the larger senders, CBI is much lower: roughly 14.81% across the larger sending volume categories expressed interest in cloud services. That number is consistent with the highest volume bin of over 1M per hour, which had a CBI of 14.25%.

Our data suggests that, while senders in the less than 10K category appreciate the convenience of cloud-based email infrastructure, a stronger driver may be that small ESPs lack the resources needed to manage complex tasks involved in hosting their own sending infrastructure in house. Moving to a cloud-based email infrastructure can be a cost-effective way for smaller ESPs to meet their investment objectives, maintain security, and outsource the administrative knowledge needed to manage increasing volumes of email while properly configuring server requirements.

The largest service providers, (the top 1% of ESPs) have been reticent to migrate to the cloud due to the complexity of their sending environments. One understandable constraint, mentioned to Port25 by a large ESP in Germany, is that large ESPs don’t want to relinquish control of their reputable IP addresses. Reputation aside, certain SLAs among large senders prohibit them from releasing sensitive customer data to a third party. In addition, high volume senders generally require some degree of custom integration to create a seamless hybrid cloud infrastructure. Concerns about integration may be holding back some larger email senders from using cloud-based services.

These headwinds are mitigated by the growing number of small and midsize ESPs that understand the economic and administrative benefits of a cloud solution for email infrastructure. They are driving the huge growth in API-driven cloud email infrastructure solutions that systematically integrate with any existing front-end email platform. In time, this trend may move large ESPs to jump on board. Even now, while CBI is not as great among our higher volume customers, Port25 has successfully on-boarded dozens of large enterprises in our ecosystem to the cloud.

This article was intended to uncover the latest trends in enterprise level interest for cloud-based email. You can read more about cloud-based email infrastructure trends in an earlier article here.

By Fred Tabsharani, Founder and CEO at Loxz Digital Group

Fred Tabsharani is Founder and CEO of Loxz Digital Group, A Machine Learning Collective with an 18 member team. He has spent the last 15 years as a globally recognized digital growth leader. He holds an MBA from John F. Kennedy University and has added five AI/ML certifications, two from the UC Berkeley (SOI) Google, and two from IBM. Fred is a 10 year veteran of M3AAWG and an Armenian General Benevolent Union (AGBU) Olympic Basketball Champion.

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