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Comment by dotBen | Hacker News Reader

Contrarian view...

by offering <50 email accounts for free, Google essentially destroyed the market for any other startups or companies to come into the market and offer non-enterprise B2B email services... thus limiting competition and innovation.

One could argue that the removal of the free tier at this point is simply because they've created an entrenched position, but one could also suggest that this creates a modicum of opportunity for another player to try to enter this space.

Certainly until today the $ size of the addressable market in the small business email space was practically $0 given Google's position.

[discuss :)]

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> Certainly until today the $ size of the addressable market in the small business email space was practically $0 given Google's position.

Rackspace Mail (formerly MailTrust) has about 200k paying customers for small business e-mail hosting. I've been paying them to host mail on 8 of my domains for years -- Gmail was never appealing to me for various reasons -- so the 24/7/365 support, daily backups and 100% uptime SLA easily made MT/Rackspace the right choice.

It's $2 per mailbox per month, or less than half Google's price, but there's a minimum of $10 a month -- so it's only cheaper if you have at least a couple mailboxes/users.

As an aside, Google also gives away web analytics for free, yet there's still a billion dollars a year spent at other web analytics firms. There are always ways to compete with free.

I just helped several companies move to Google Apps from Rackspace over the weekend; their web interface is horrible and Google provides a much better experience on mobile (both iOS and Android) than Rackspace ever could.

That only matters if you care about the web interface. Lots of businesses don't, they're all on Outlook. I use Thunderbird (IMAP); I've literally never logged into Rackspace's webmail client.

The 2$ plan does not sync with anything. The 3$ plan only sync's mobile with webmail (big woop). For "real" business email you need rackspace exchange which is 10$ a month per user, this adds up very quickly with a lot of users.

One of the companies specifically migrated to avoid MS licensing costs (i.e. moving from Outlook to Chrome for the mail interface, Docs on the web/LibreOffice on the desktop).

The take away? You're always gonna pay. Somehow, somewhere, you're gonna pay. Might as well make sure you're getting a good deal rather than hunt for the free lunch.

I expect Google will find some way to encourage me to upgrade my legacy free Apps account over the next year.

Edit: And I just realized that my Google Plus account is tied to my Google Apps account. If they raise prices on me I'm screwed.

I decided fairly early on to not use my Google Apps account for my Google+ because I figured that in the future I'd want to have the ability to migrate elsewhere without losing all my Google+ stuff...

Start migrating your circles to a gmail account :)

so, as it happens Bill Boebel (one of the founders of MailTrust/WebMail.us) is an investor and board member of my startup WP Engine ;)

To be fair, Google Apps for Business didn't get going until 2007 which is also the year Rackspace acquired WebMai.us. I'd say the market for B2B email contracted severely the moment Google Apps's free offering became established.

100% uptime SLA? Really?

Why not? SLA generally just means they'll pro-rate a refund for the downtime, so even if they only achieve 99% over a year it won't cost them a huge amount.

That's not the point. The point is NO ONE can promise 100% uptime. One can promise a 99.999% uptime and refund for the downtime. If one promises 100% uptime, either he's lying or he's just stupid.

I don't know the details of the email SLA, but for infrastructure: power, networking etc. on our hosted Rackspace servers, we have a 100% SLA. And it's not a lame prorated thing: they pay 5% of the monthly cost back for 30 hours of downtime.

So 99% power/network uptime in a month would cost them 70% of what we pay per month.

http://www.rackspace.com/managed_hosting/support/serviceleve...

An SLA isn't about promising what they will deliver, not really, it's about what they will deliver if they want to keep 100% of the customer's payments.

That's the pattern that has happened to map base-layer tiles since Google started charging: http://bits.blogs.nytimes.com/2012/03/20/daily-report-some-s...

Still, $50/user/year doesn't give you that much room for manoeuvre as a startup...

Google just removed their own ability to convert free customers to paid ones as they grew. Switching cost of email is extremely high, so a startup in this space could easily charge more than $50/yr/user once they're already in.

Granted they're lacking the integration with all of Google's other services, but given how bad google's multi-account sessions are and the fact that basically everyone is logged into their personal gmail account already, that might actually be a good thing.

Plus, $50/yr/user adds up pretty darn quickly at scale. Not as much as all of these video services that cost about $100/yr, but like I said, the cost of switching email providers is insanely high - once you have a customer, it's almost guaranteed you'll have them forever unless you screw up at massive, catastrophic scale. Though because of that, you have to have a crazy-good hosted offering to get people to sign up in the first place; demoing a mail service is hard and Gmail (personal) has been a great way to show what their paid services offer for businesses.

If someone's already committed to paying, they can be convinced to pay more. It's hard to convince someone getting something for free that they should start forking over dollars.

Compared to what? You can provision your own apps and run your own services for less?

I think he means as a vendor of mail services, $50/year/mailbox means you can't make enough profit unless you're huge, and even mid-sized, $50/year/mailbox might not let you provide very good service.

Same with Google Reader. After they shut down Google Reader social features most heavy users flock to newly created services.

When Google Reader was social & free (and without ads) it wasn't perfect but it was good enough to destroy competition.

What are these new services? I seriously can't find anything that's even comparable.

theoldreader.com seems nice

Fastmail.fm has been around quite a while, and while I still would consider them a success, I don't think they have done much in the form of innovation. Most of the innovation I have seen in email for the year, has been in the form of the client, not the server.

From what I have read on the fastmail.fm blog, etc, they tend to do some very good stuff on the back-end, particularly(open source) contributions to the Cyrus IMAP server. These, I understand, have improved the failover and resilience of the IMAP server a lot. These might not be "innovations" in a technical sense, but they certainly make Cyrus a much better server for Enterprise users.

The less said about fastmail.fm's "innovations" on their web interface the better.

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