Email Service Providers versus On-Premise email Solutions

Recently a great discussion arose in a noted LinkedIn group called Email Geeks about the potential benefits of an on-premise email solution, as opposed to a hosted solution or Email Service Provider.
As advocates of both options, the C-Suite as well as sys admins and delivery experts at organizations should conduct a fair amount of due diligence before making the decision to bring an email system in-house.

Security and cost savings

Companies choose to switch to an on-premise or in-house solution for various reasons. Some move for security, while some might move for overall cost savings or a reduction in total cost of ownership. Most of the time it’s both. Decision makers might point to the number of overall messages sent in a given month to make such a determination and choose whether it is cost prohibitive to stay with their current ESP. There is *no* absolute number, since so many other factors need to be considered.

Until all the pieces of the puzzle are in place and before you are ready to take the leap to an in-house solution, please consider all the points below, and err on the side of caution. It may become cost-effective to move to an on-premise solution once you have a sufficient message stream to justify the added expense of software and dedicated staff. But, it takes more than one IT person.

Here are a few reasons to stick with your current ESP:


Data security in our industry is a real beast. Do you want the security of your data to depend on an external system? Security is perhaps the top reason why companies choose to bring their email in-house. ESPs need to quell any concerns from organizations about the integrity of their data related security.

ISO 27001 certification
Recently, Email Service Provider Emarsys achieved the highest level of Security Accreditation, announcing that they are now ISO 27001 certified. They are one of few ESPs to be granted this level of security accreditation. Given the rash of data breaches over the last couple of years, I think Emarsys has set the bar for security. I think once the security question is sufficiently answered by the Email service provider, it will reduce the allure of an in-house solution for many organizations.

The two key reasons for the growing interest in certification to ISO 27001 are the proliferation of threats to information and the increasing prevalence of regulatory and statutory requirements that relate to information protection. Information security threats are global in nature, and indiscriminately target every organization that owns or uses (primarily) electronic information. These threats are automated and data is exposed to many other dangers, from acts of nature and external attack to internal corruption and theft.

Data Management

Given the variety of marketing channels, managing complex data sets, can be so arduous that the term “data scientists” can be applied to those who are equal to the task. This is particularly true when data points encompasses many different silos. Email service providers that offer finely tuned tools to tie these disparate data sets together offer an invaluable resource that will gain further traction given that we’re still at the dawn of big data.

Aggregating the silos first, then segmenting the data and tethering it with business intelligence tools and systems, requires resources. Guidelines need to be in place while collecting this data. If you are not ready to manage large data sets on your own, look for an ESP with renowned data management expertise. Not all cloud-based ESPs will be able to manage a particular micro segment of your data, so choose carefully.

On the other hand, if resources are available to analyze your data and security is the top concern, than a couple of pieces to your puzzle are solved, when considering an in-house solution. In that case, the other question you need to ask yourself is whether you have the right personnel in place to succeed with an on-premise solution. It will take a dedicated staff and you need to be ready for the additional costs involved.


As my friend David Bronson of Turner mentioned, the question becomes, “Do I have the right people in place to do the job well, or will I get better service from my Email service Provider?” ESPs hire the best. They rely heavily on email deliverability experts who manage a large number of IPs, they automatically keep your lists clean through expert bounce management protocols which all helps in mitigating delivery problems. They also employ expert marketing strategists that give guidance from email design and social media to list growth strategies. And, the ability to manage and parse large data sets. ESPs have content creators that embellish every detail about the benefits of using their applications, and most ESPs now offer digital agencies a myriad of white-label solutions.

The tipping point in choosing an ESP or On-Premise email solution

The bottom line is, when it comes to the costs and benefits of an on-premise email solution, there is a tipping point on the horizon and it’s different for each organization. Tread carefully, as the costs can rise quickly, so you’ll want a cost-effective solution that can scale to your needs quickly. So, before you think about driving that Ferrari (purchasing an on-premise solution) you’ll need a driver’s license and a few gallons of gas, and when that time comes and your ready we’ll be that technology solutions provider you are seeking.

This post was inspired by David Bronson of Turner. Disclaimer: Emarsys is a client of Port25 Solutions, Inc.

About Fred Tabsharani

Fred Tabsharani is engaged in strategic marketing initiatives for Port25 Solutions, Inc., an email software company which serves Email Service Providers and leading enterprises. After receiving his MBA from John F. Kennedy University, Fred immersed himself into the world of email deliverability. He is a columnist for a few industry blogging portals and is also a member of several email based organizations including MAAWG and the Email Experience Council.

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