Should ISPs Build or Buy their Email Hosting Services?

Main Differences: Building vs Buying Business Solutions

Recently, build vs buy decisions are everywhere across the business landscape:

 ☑️  Marketers decide whether to build complex spreadsheets or buy a tool subscription

 ☑️  Dev team leads decide whether they can build a quick productivity tool or buy another subscription

 ☑️  Expansion managers decide whether to build or buy new business offerings

 ☑️  Even CEOs decide whether to build a new business department or acquire an already-successful venture.

The question is ever present and vital to the positive development of any business. As such, before delving into email specifics, we should zero in on a few high-level aspects:

1. Building can take more time than you have
2. Buying can ensure a better time to market
3. Costs vary wildly based on your business case
4. Highly complex and resource-intensive solutions are better off bought
5. Long-term costs are vital when deciding to build vs buy
6. You might need custom features later on
7. The more people will use it, the more sense it makes to buy it

Building vs Buying an Email Solution

Email works as a revenue-generating business area if your potential customers like:

• Full email privacy, independent from Google, Yahoo!, or other big email services vendors
• A fixed number of mailboxes either for themselves or for their business, with no additional costs
• Data territoriality - a big plus for stability, typically valued in industries or regions with a high number of laws, directives, and general governmental oversight
• Extensive email security options

That being said, building your own email solution means either starting from scratch or using an existing open-source solution and developing it to your liking. Regardless of your pick, building can still be inefficient precisely because of the demands of this ever-evolving and highly-regulated space:

• Costs increase proportionally based on the number of mailboxes you need to handle and keep secure
• Scalability and planning are difficult to manage. As you grow, you need to anticipate your users’ needs with your email solution. This can easily become overwhelming when you have hundreds, thousands, or even millions of users.
• You’re entering an industry that started in 1971, so you’ll have a lot of catching up to do with research on the history, compliance, and inner workings of the email ecosystem
• Offering email as a service implies constant support and upgrades, which might be difficult for an in-house team. As such, you’ll likely need third-party support for your open-source solutions, antivirus / antispam solutions, as well as DNSBL and URIBL support.
• Depending on where you and your users live, compliance can quickly become a nightmare and its own department
• If you opt for building your email service on top of an existing open-source solution, you’re lowering costs but also limiting what you can build to what’s possible with that solution.

Cost Breakdown of Building vs Buying

Since we’re speaking of compliance, we should break down the costs of compliance and of the other factors that go into building your own email solution:

• Development Costs. This lengthy endeavor includes planning, design, actual development, testing, QA, and managing integrations. It will make a big dent in your budget. Do you have what it takes to pull through?

• Hardware and Software Costs. Whether you host your email servers in the cloud or on-premise, the associated tech needs will end up costing you a lot. From servers to ports, software licenses, applications, support tools, and even the electricity bill - all need to be factored in before you decide whether to build or buy.
• Compliance and Security Costs. Security typically means spending on third-party vendors to secure your servers and your users’ accounts, data, and emails. Compliance is a complex, overlong, and legalese-filled process that needs dedicated people to oversee it.
• Staffing Costs. Let’s imagine for one second you have all the developers you need with all the know-how required to launch an email solution. That’s rarely the case, but even then you still need at least one person (if you’re an ISP, probably a lot more) dedicated to monitoring and maintaining your email infrastructure and safeguarding deliverability.
• Crisis Costs. If a single thing goes wrong, your users won’t be able to send emails - the cost of managing such a crisis will severely damage your business. Mostly, that’s because of:
• Business Costs. Email isn’t a passing fad, it’s a necessary, dependable global communication method that over 4 billion people use, many for day-to-day business operations. Outages can have unforeseen ripple effects that will come back around and prove costly to you and your company.

Beyond these, many costs are hidden since you can’t predict the future: maybe you’ll have too many users at once, a high churn rate, or a small error that ends up crippling your service. All these can drive up costs significantly - are you prepared for that?

On the other end of the spectrum, here are some typical costs incurred if you buy your email solution:

• Integration and Deployment Costs. Buying an email service isn’t enough, you need both the people and the know-how to install it and integrate it into your existing business systems, and then deploy it to your users.
• Hardware and Software Costs. Even if you buy the email solution, there will still be hardware and software costs related to managing it and keeping it afloat, You might need tools to optimize integrations. You might need support software to manage customer service. It will depend on your business case, but if you’re an ISP with thousands or tens of thousands of users, you can’t ignore these costs during the planning stage.
• Staffing Costs. If you decide to buy rather than build, staffing won’t be as time-consuming or complex. That doesn’t mean you won’t still need people to manage this new service you’re adding to your business. The specifics will be up to you and your vision for the department, but you’ll at least need testing, email client monitoring, SLA monitoring, and, most of all, customer support.
• Scaling Costs. This part will vary depending on the email service you choose to buy. Some come equipped with auto-sizing that effectively helps you create more accounts as you need them.
• Support Costs. Whether you create a new support department or integrate email service support into your current team, you will always have costs associated with customer service. From the people that need to be trained, managed, and paid, to the tools they use to make their workflows easier - everything has a cost that needs to be factored into your final decision on build vs buy.
• Custom Development Costs. Since you’re buying the email solution you’re going to offer to your client base, you’ll need to adapt it so it aligns with your brand identity (logo, colors, fonts, etc).

It would be unfair to us if we didn’t mention that Axigen can effectively mitigate and even eliminate many of these costs related to buying your email offerings. Stick around for the end of the article for more info.

Advantages & Disadvantages of Build vs Buy

*Axigen actively addresses this build vs buy concern — with custom development as a core offering of our business.

Risk Assessment of Building vs Buying an Email Solution

Risks of Buying Your Email Solution

Using a simplified model of risk assessment for project management, we can deduce that the biggest risks you should plan for when buying an email solution are:

• Communication issues between 3 parties. It can get confusing, particularly when there are too many people involved in solving a customer’s issue.
• Complex customer support issues. This is a medium-impact risk because your team probably won’t have the knowledge to fix the issue right away, and instead will have to go through your vendor for support.

Risks of Building Your Email Solution

Similarly, for building an email solution, you should be ready with a plan of attack for the following risks:

• Product issues. If you end up developing your own solution, you’re going to go through a lot of trial and error. The best way to deal with this is to be proactive - testing and QA will be vital to the success of your product launch.
• Loss of service. Even then, since it’s a product you’re developing in-house, you shouldn’t aim for Six Nines uptime from the start. Instead, be prepared to repair your product on the go if something goes wrong.
• Unexpected costs, as mentioned above, can make or break your overall project. Be ready to put a lot of money into your product before you reap any significant ROI.

The correct way of handling these risks and others you may find is to prepare a response plan with the goal of removing the risk, lowering its probability of occurrence, or mitigating the impact it may have on your business and email users.

How to Decide Between Building vs Buying

Don’t fool yourself and mistake context for certainty — the final decision on whether to build or buy will still be tough even with all you’ve read up to this point.

You might wait until the last minute to do it - so if you’re still on the fence, answering some simple questions might help you towards the better path:

1. What’s your budget?

Depending on how much you’re willing to put forth, the decision might become clearer. However, you have to keep in mind that costs, although generally higher when you decide to build, can still change based on your business case and industry trends.

That being said, you should pick one and stick to it rather than be paralyzed by the decision because of uncontrollable factors. Pick what makes sense for you and your budget in the short to medium term.

2. What’s the focus of your business?

On the other hand, maybe you’re all set to build an email solution from a financial standpoint. Next, you should remind yourself of your company’s focus - what you want to achieve and your core values. If email doesn’t resonate with you, maybe it shouldn’t be a focus for your team for the foreseeable future.

3. Do you have a timeframe for your email service launch?

If you’d like to launch sooner, then sticking with the buy option is a surefire way to make your deadlines. That’s not to say buying won’t be time-consuming - it will involve quite a bit of back and forth with your vendor, plus specific requests that take time, such as custom development.

However, in the long run, buying is still a faster way to go to market than building.

4. Are your developers able to build such a solution or do you need to hire new people?

Did you consider how knowledgeable your devs are in the area of email? A quick survey - either live or through text - might help you get a feel for how your devs would greet such a decision on your part. If you need to hire new people, remember it will also increase your overall costs.

5. Are you able to build something that’s as good if not better than the market standard?

Few have as much experience in the email space as a dedicated email service vendor. Before you commence building your own solution, you should ask yourself whether you can truly match or improve on existing email solutions.

7. Can you handle the compliance and security side of email?

Depending on your federal, national, or regional regulations, you might be embarking on a monumental task that you’re woefully unprepared for. You need to:

• ensure the privacy of your users’ data
• safeguard the security of their accounts and information
• be ready with effective systems for lawful interception

8. Is there an alternative you can opt for?

Up to this point, we’ve presented a very black-and-white overview of the build vs buy decision. You’re probably thinking: there’s gotta be another way, right?

Good news, there is! It’s called Axigen — and it’s a solution we believe you might like, particularly after considering all the above points. Let’s explain:

Tailor Your Solution with Axigen and Eliminate Risks

Our product, Axigen, through its many optional add-on packages, can help reduce or even eliminate many of the risks traditionally associated with buying a software solution to offer it as an extension of your business services.

By going for our email solution, you receive a fully-featured & white-labeled email server software with 24/7 support, a full security stack, and built-in calendaring and collaboration tools. You can also  deploy Axigen on your existing infrastructure, both on-prem and in the cloud - it’s 100% up to you.  

List of available email client add-ons:

• Professional Services. Under this basic package, we can help you with infrastructure requirements, sizing, deployment, integrations, and custom setup per user.
• Managed Services. Beyond integration and deployment, we can also help manage your email solution. Once live, we can aid with email client monitoring, SLAs, stress-testing, and proactive problem-solving, reducing the number of support tickets you’ll potentially receive.
• Training Packages. Need help learning how to use or administer the Axigen email client? No worries- we can hold meetings to run you through the theoretical part of the product, and then we can go together through training exercises to show you how to deploy, monitor, and back up the platform. We also provide assistance for any specific client requests.
• Custom Development. Need a custom-made app? We’re here to do that. Need your design and brand fully integrated into your product? We can help with customization, and not just by adding your logo (that’s available for everyone). Need any other custom features? Reach out and let’s discuss them!

Next Steps

Have you decided on build vs buy?

If not, let’s have a call and we can help you make that decision in a calm and professional manner (we promise we won’t try to sell, after all, our product sells itself ?).

If yes, that’s great! If you picked buy, we’re waiting for you to shoot us a message. If you picked build - congrats! You’re about to embark on a wonderful journey, and we wish you the best of luck!

Regardless of your choice, you’re taking your first steps in the email space! So we’d like to be the first to welcome you to the industry that supports the biggest global communication method in history! Good luck, and we hope to see you around!