article is a little old but i don't think i've seen it before:
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Digital Digestion: We Have Mail
June 29, 1999
by: Pimm Fox
Critical Path, the newly minted public company which specializes in e-mail services, looks ready to grab some headlines with services designed for those of us who have grown tired of just being able to send and receive e-mail.
You mean there is more?
Yes, but before that, let's look at who provides the e-mail services for Sprint, American Airlines, Kraft and the United Nations.
That would be Critical Path.
In addition to British Telecom, ICQ, E*Trade, GE Capital and US West, Critical's customers are of high enough caliber that demand services such as storage capability, message re-routing and multiple domains and mailboxes. This puts the company ahead of the competition in terms of scaleable services -- for now.
Humble Beginnings
Founded in San Francisco in 1997, its original mandate was to provide e-mail hosting solutions to Internet Service Providers, Web hosting companies and corporations. But the service demands just kept growing to include things such as secure message delivery.
That's one reason behind the company's recent acquisition of dotOne.
With the takeover, Critical Path gets direct access to the telecom arena -- where dotOne was particularly strong -- and where customers are increasingly worried about the security of their e-mail traffic. And they should be.
This growing market is in addition to the e-mail outsourcing and Web hosting services which are estimated to be a $7.5 billion market by next year. Right now there about are about 245 million e-mail boxes generating 2.1 billion messages each year. The numbers for both should jump to 555 million e-mail boxes generating 6.6 billion messages by 2002.
That's a lot of messages to store, route and protect. Critical Path's effort to provide corporations with a way to do this are mirrored in the staff, servers, software and maintenance that supposedly give the firm an edge.
Unknowns Galore
I say "supposedly" because growth in a company's given sector doesn't necessarily translate into profits even for the industry leader.
So what if the company has a history of losses; that the estimates for e-mail are pie-in-the-sky because there is no historical basis for the calculations; new technology and platforms are yet tested in real-world environments, or doesn't quite factor in intense competition from others that offer enhanced e-mail services?
Who cares, this is the Internet remember!
The bright spot is that Critical Path doesn't sell directly to consumers -- no free strategy here -- and the loss of $10 million last year doesn't stand out from the crowd of other companies doing the same thing.
If Critical Path (with $250 million in cash) can turn the oneDot takeover -- along with its takeover of Fabrik Communications -- into bigger and better contracts and profits then it has a chance against similar companies.
If not, well there's always free e-mail.
(Pimm Fox is the former Business Editor of The San Francisco Chronicle. He has worked for The Wall Street Journal, Newsweek Magazine and The New York Times. His work has appeared in Institutional Investor, Financial World, and CEO Magazine.) |
