Up Against The Big Guys

FRAMINGHAM (03/10/2000) - Sendmail Inc. competes in two markets: corporate and Internet service provider. It faces stiff competition in both. Sendmail CEO Greg Olson estimates that one quarter of the company's business is with service providers, while sales to corporate customers make up the rest.

In the corporate market, messaging systems such as Microsoft's Exchange Server, Lotus' Notes/Domino and Novell Inc.'s GroupWise include a Simple Mail Transfer Protocol gateway with their products. These firms have saturated the Fortune 1,000 and continue to move downmarket to small and medium-size businesses.

Even so, analysts say Sendmail stands a chance against the competition because of its low price.

Analyst Mark Levitt at International Data Corp. says a high percentage of companies with Notes and Exchange still use the free Sendmail MTA and may have several MTA servers dedicated to the Internet and internal e-mail.

Information technology administrators "don't choose to use the MTAs with those products because they don't provide the same reliability and scalability of Sendmail," Levitt says. "As long as the price remains aggressive, there's little reason why an IT administrator would be reluctant to pay for the functionality and support of the commercial version."

Still, companies like Critical Path Inc. in San Francisco and Rockliffe Systems Inc. in Santa Clara, Calif., offer an SMTP gateway to many e-mail systems.

In the Internet service provider market, Sendmail competes with companies like Software.com Inc. in Santa Barbara, Calif.; Ipswitch Inc. in Lexington, Mass.; and Sun Microsystems Inc. Each of these firms offers a scalable messaging product with an Internet gateway.

Mirapoint Inc. in Cupertino, Calif., also develops a Web mail appliance with preconfigured software and hardware in a Unix-derivative environment. The turnkey approach lowers the administrative cost for corporate customers and service providers alike. Analysts say appliances offer an attractive alternative to providers looking to streamline costs.

Olson says price and the existing penetration of the free product will better his company's competitive chances.

Pricing for Sendmail Switch starts at $495, and pricing for Sendmail Multi Switch begins at $4,495. Pricing for Domino Mail Server 5.0 starts at $695, Exchange 5.5 starts at $799 and GroupWise 5.5 starts at $718.

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