ROI Analysis: Retiring On-Premises Email Archives

As the return on investment (ROI) and performance of cloud solutions both continue to increase, more companies are weighing whether to archive email on-premises or in the cloud.

An email archive can be critical to a company in many ways: as a record of customer interactions, evidence against legal challenges, proof of corporate and regulatory compliance, or a source of data to be analyzed for risk management or customer sentiment. The value of archiving is growing as companies increasingly deploy innovations such as artificial intelligence while also extending archives across a proliferation of messaging services and conferencing and collaboration platforms.

Still, the decision to move email archives into the cloud is not a simple dollars-and-cents calculation, especially for companies in healthcare, financial services and other highly regulated industries. Here too, though, cloud service providers are rapidly rolling out new tools that facilitate compliance, monitoring and e-discovery in the cloud.

Whatever considerations come into play in your decision-making, ROI will be a big factor, so this article focuses on the cost/benefit of email archiving. It continues an ROI blog series featuring research that Mimecast commissioned from Forrester on a range of topics including blocking and monitoring malicious emails, protecting against brand spoofing, checking employees’ risky behavior and streamlining e-discovery. The market research firm aggregated Mimecast customer responses to model the ROI of a composite small to midsize organization in these key areas.

Forrester Findings on ROI of Email Archiving

Forrester reported that retiring on-premises email archiving and moving it to the cloud saved its composite company nearly $1 million over three years. Some companies retain on-premises archiving solutions even after moving their email to Microsoft 365, the most common email provider to small and midsize businesses, the firm reported. But this approach can involve significant expense in three areas:

• Server leasing and maintenance contracts typically cost about $20 per user per year.
• Licensing fees for email archiving software are in the range of $8 per user per year.
• Staffing can mean a fully burdened salary of $85,000 per year.

By moving its on-premises email archive to the cloud with Mimecast, Forrester’s composite company saved $942,000 over three years.

The option of simply moving to Microsoft 365’s archiving solution has its pluses and minuses, according to a separate report by Gartner. For example, it offers a wide range of suite and a la carte purchasing alternatives, but its support of data sources outside the Microsoft ecosystem was found lacking.

Many companies supplement their Microsoft 365 services with additional email management services. For example, Mimecast’s 2020 State of Email Security Report found 65% of respondents adding layers of continuity and cyber resilience.

Doing the Cost/Benefit Analysis

Forrester calculated an ROI of 225% over three years for the composite organization across the five services explored in this series. That translates into $3.9 million in aggregate benefits versus $1.2 million for the cost of licensing, security team training and a part-time system administrator for services to block and monitor malicious emails, protect against brand spoofing, check employees’ risky behavior, retire on-premises archives and streamline e-discovery. Forrester’s analysis provides an approach organizations can apply to their own threats and cybersecurity responses.

Driving Cloud Archiving

In general, deliberations over cloud vs. on-premises vs. hybrid solutions include an increasing range of options, according to IT solutions providers. These include colocation service providers, vendors of on-premises storage that offer cloud-like, consumption-based pricing and others. Overall, cloud solutions appear to be outpacing on-premises solutions, driven further by the need to accommodate remote working as the new normal.[i]

Nucleus Research, which publishes ROI statistics comparing cloud to on-premises solutions, found the cloud’s ROI to be four times greater than on-premises returns in 2020. Comparative cloud ROI has gained each year, from 1.7 times greater in 2012.[ii] Benefits cited included speed of deployment, ease of upgrades, greater functionality, ease of use, operational expense vs. capital expense, more flexible pricing, reduced IT support costs, lower energy consumption and fewer consulting fees.

Nucleus also cited user comfort with cloud security, and Verizon’s Data Breach Investigations Report bears this out. Cloud assets were involved in about 24% of breaches in the 2020 report, while 70% involved on-premises assets.[iii]

Going forward, Gartner reports that email service providers continue to expand archiving capabilities for essential business functions such as regulatory compliance, corporate governance, e-discovery, business intelligence, and data availability and recovery across more services. “All organizations must adapt to intelligently capture, manage and retain their communication data,” said Garth Landers, director of product marketing at Mimecast.

The Bottom Line

Retiring on-premises email archives was shown to deliver significant ROI in a recent Forrester report that cites reduced system, software and staffing costs. The finding comes as innovations in cloud-based email archiving also expand the tools companies can use across a growing number of communication and collaboration platforms in the cloud to improve regulatory compliance, risk management and busine

[i] “Cloud Storage Reseller or Consumer? Partners Face Market Shift,” TechTarget

[ii] “The ROI of the Cloud,” Forbes

[iii] “Data Breach Investigations Report 2020,” Verizon