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Report: Email alone not enough

Even though it has become indispensable for business communications, email is no longer enough for many users, a new study says.

Even though it has become a necessary and critical part of business communications, email is no longer sufficient for many users, according to a new report.

As demand grows for products that integrate email with other applications, "email-only" vendors are challenged to develop packages and new market strategies to keep up, according to a new study by International Data Corporation.

CNET Radio has more with IDC's Mark Levitt
IDC researchers said demand is on the rise for products that offer more flexibility by integrating email and other applications, like voice mail, paging, and videoconferencing. This has forced a number of leading email vendors to revamp their offerings.

One such vendor is Qualcomm's Eudora division, which IDC used as an example in its study. During the past two years, the email software market has been turned on its head by the rising demand for products supporting Internet standards.

For Eudora and other Internet email vendors, this has been a double-edged sword, according to Mark Levitt, research manager of IDC's collaborative and intranet computing research division. Internet-ready demand validates companies' product strategies but offers entry to a host of new, mostly larger competitors with products that include email.

"We used Eudora because they know the market is changing and they're making moves to meet the new demands," Levitt said.

For example, Qualcomm now offers a Eudora messaging suite that offers support for IMAP4 (Internet Message Access Protocol) and LDAP (Lightweight Directory Access Protocol). In addition to the Internet messaging standards, Eudora Pro CommCenter 4.0 also supports fax and voice mail capabilities. Users can set up a "virtual office" with a phone number in more than 25 cities worldwide to send and receive faxes and voice mail using their CommCenter mailboxes, the company said.

Qualcomm boasts having more than 18 million Eudora users, but observers have long wondered what the company will do to maintain that market as software titans like Microsoft and Netscape Communications hone the messaging applications they provide with their software suites.

Although smaller email vendors face serious challenges from these larger competitors, IDC believes the smaller firms can continue to succeed in the marketplace by providing, through partnerships or acquisitions, products that give customers a choice of communications tools.

Thanks to Qualcomm's new moves with its Eudora Pro software, IDC sees sales for that product line growing by a compound annual growth rate of 125 percent from 1993 to 1998, with an installed base exceeding 11 million client licenses worldwide.

IDC also found that in melding messaging and collaboration, smaller email software firms must contend with a generation of software clients that are available for free in bundles with operating systems, Web browsers, office suites, servers, and as downloads off the Web.

"Market seeding" by companies like Microsoft and Netscape pose the greatest threat to the email client software business. Ironically, Eudora used the same tactics with its Eudora Light client to gain a foothold in the email market, according to Levitt.

In related news, small vendors aren't the only ones looking at bulking up their messaging packages to take advantage of the new market. Sources at IBM subsidiary Lotus Development have told CNET's NEWS.COM it has a team of developers working on its own universal messaging product. They would not give any further details.