Recession lowers SaaS resistance

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The upside to the recent global economic meltdown is that it is spurring the adoption of software-as-a-service (SaaS).

This is because costs have to be trimmed without compromising technology or compliance requirements, says unified e-mail management group Mimecast.

This week, Mimecast announced it had received a £13 million (R160 million) shot in the arm from two private equity companies to help speed up its penetration into the global managed e-mail market.

Based out of London, Mimecast was founded by two South Africans, Peter Bauer and Neil Murray (CEO and CTO respectively), in 2004, with the aim of reducing enterprises' burden of managing their own e-mail systems, and the resultant time and cost impacts.

Mimecast's services take care of the storage, archiving, security and compliance issues that surround the management of e-mail services. Its services currently focus on Microsoft's Outlook and Exchange services. However, the company hopes to use the new investment to increase its offerings to other e-mail services and products.

“We offer to take care of all the issues that comprise the e-mail ecosystem, with the exception of the actual e-mail system itself,” Bauer says.

Management has worked on a strategy to get Mimecast noticed and accepted by international research firms, such as Gartner and Forrester Research, as enterprises often use these to plot their technology paths for the near and medium future.

Gartner has already cited Mimecast as the “most cool” application in its storage and archiving analysis, and Forrester Research featured Mimecast in its assessment of what it offers to end-users.

Bauer says the investment in Mimecast by private equity firms Index Ventures and Dawn Capital will enable the company to focus on its plan to penetrate the North American market. It will allow it to increase its research and development spending and, then, following some reorganisation, gear itself to take on the rest of the world.

“The economic downturn has really helped us,” Bauer says. “Enterprises are looking at upgrading their e-mail systems without the costs involved of running a large IT staff that is an expense that is not necessarily core to their operations.”

A total of 175 people are employed in its Johannesburg, London and North American offices, of whom 25 are directly involved in research and development. This development takes place using C++, utilising traditional Microsoft platforms, with the core platform being a Java-based engine.

The prospects for expanding Mimecast's client base in developing markets, such as the rest of Africa, are good, says Mimecast SA MD Garth Wittles.

“The roll-out of infrastructure, such as the undersea cables, the building of new data centres and the generally rapid increase in connectivity means that many African organisations can leap-frog their technology, not worry about having to install and build large IT organisations, and go directly to software-as-a-service,” he says.

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