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March 2009 "Making every IT dollar count!" Part 3
Copyright Nash Networks
Executive Summary
E-mail us if there are any other topics you'd like to see covered, or subscribe to our newsletter:  For Email Marketing you can trust
How Big is the Problem? In the early 1990s, Paul Nash, now President of Nash Networks, was among a group of Internet pioneers who vociferously objected to the intrusive new phenomenon called “spam”. They worried that it would change the Internet irrevocably and for the worse. Turns out they were right.
 Most computers on the Internet are unsecured home computers, and very vulnerable to being “taken over” and used to send spam. In 2007, Internet guru Vint Cerf estimated that up to 25% of computers on the Internet – 150 million of 600 million - could be spambots. In 2008, the top 11 spammers alone were using over 1 million computers as spambots. The spam industry has grown so complex and sophisticated that it contains syndicates whose only function is to infect and control computers, that they then hire out to spammers by the hour. The Good News
What Does Spam Cost Businesses? This message is starting to look a bit hackneyed, but spam yet again conforms to the general pattern for Total Cost of Ownership of IT (see Part 1 of this series), which is that most costs are indirect and are caused by lost productivity. Most direct costs are borne by the ISPs The “good” news is that most direct costs of spam are absorbed by ISPs, who need to have powerful anti-spam systems in place – but those costs are ultimately passed down to consumers in the form of higher prices. Lost productivity is the stand-out cost of spam Lost productivity is estimated to account for 85% of the total cost of spam to the average organization, according to Ferris Research.  The cost comes from working time spent identifying and deleting spam. Nucleus Research put this at U$712 per employee per year in 2007, Ferris at U$800 (4c per person per piece of spam). The actual cost will depend on how many spam-e-mails a person receives per day; how long they spend on each; and what their time is worth. Other effects of spam on productivity are:
Other costs of spam Other costs of spam include:
 * Taken from Ferris Research estimates.
Spam Cost Calculators There are quite a few spam calculators on the Web. Handle with care. Those published by companies selling anti-spam services could produce cost estimates that are unrealistically high. We modelled our example above on Network World’s calculator. For the 50 employees in our hypothetical example above, the Comm Touch calculator estimated a cost of $41,063 per year in lost productivity, and Network Computing calculator put it at $31,335. Some of these differences are due to very different assumptions about extra storage needed. Network World spam cost calculator Network Computing spam cost calculator Comm Touch spam cost calculator Google cost calculator (in-house vs Google’s hosted anti-spam Using an ISP to Filter Spam In many cases, there’s precious little that businesses can do about spam. That’s because many smaller companies don’t have their own mail server. In those situations, the ISP is completely responsible for spam filtering. The good news is that they’re pretty good at it. The bad news is that they set their policies based on general needs, not individual customers’ specific ones. Some ISPs (e.g. Rogers) allow clients to choose spam options – most importantly, whether suspect e-mails should be deleted before users see them, or whether they should be “quarantined” in a folder that users can review. Other suppliers, like Google, offer no choices. Delete or Quarantine? In terms of lost productivity, quarantining suspected spam e-mails (in a mailbox that can be reviewed by the end user) is about 60% less expensive than aggressive deleting (where the end user has no easy access to the deleted message). Nucleus Research reports that it takes 1.6 times longer to look for lost, deleted messages than to review quarantined spam. Applying that to our earlier example, where the average employee spent 10 minutes/week to review quarantined spam, the same employee would spend 16.2 minutes looking for lost deleted messages. Let’s take a closer look at that for the hypothetical company from the table above:  In-House Mail Server: More Head-aches, But More Control Businesses that have their own mail server may or may not need dedicated anti-spam technology, depending on how the mail server is set up. In some cases, e-mail still comes through the ISP, but generally it does not. In these cases, dedicated anti-spam technology is essential. There are many good anti-spam options available. The biggest issue, both in choosing a solution and setting its parameters, is the constant trade-off between keeping out real spam and allowing legitimate e-mail in. How do spam filters work? Most spam filters use some combination of these techniques:
Hosted vs. in-house anti-spam Dedicated anti-spam technology can be on-site or hosted. On-site technology can be installed on the mail server, or consist of a stand-alone device on the network. Hosted solutions can be very cost-effective. Google has caused a stir with its $3/user/year hosted anti-spam and anti-virus service. That shaves $9/year off the typical $12/user/year, but as with many Google services, comes with limited support and no flexibility. The costs of hunting down lost legitimate e-mails could far outweigh the savings. Advantages of hosted anti-spam:
Disadvantages of hosted-anti-spam:
Legitimate E-mail Marketing Legitimate e-mail marketers constantly have to ensure that their mass e-mails aren’t mislabelled as spam and filtered out. Using e-mail best practices and legitimate providers will help optimize delivery rates. High-quality providers have an 88% delivery rate, compared with only 23% for spam.  Finally… A Brief History of Spam This has nothing to do with making IT dollars count, but it’s interesting, and a good excuse to take a few minutes to watch Monty Python.  As the video demonstrates, the term “spam” means something that keeps repeating and repeating, and is extremely annoying. The first spam-like e-mail was sent in 1978 when Einar Stefferud sent an e-mail to the entire West coast address list of ARPANET, the agency that developed the precursor of the Internet. In the late 1980s, users of “multi-user dungeons”, or MUDs, an early version of the chat room, started to use the term “spamming” to refer to annoying behaviours, like crashing the database, producing large numbers of objects using automated software, and flooding chat sessions with large amounts of computer-generated text. From 1994, the use of the term “spam” to refer to unsolicited commercial mass e-mails, and the actual practice of spamming, took off due to the untiring efforts of two tarnished immigration lawyers, a husband and wife team called Martha Siegel and Laurence Canter. Their “green card lottery” spam e-mail was the first large-scale use of junk e-mailing. Siegel and Cantor unapologetically defended the practice and actively promoted it, in the face of fierce opposition and legal challenges. In Internet lingo, “Siegel & Canter” evolved rapidly into “Spam & Coleslaw”. The list below shows some milestones on the road from there to here – “there” being a new phenomenon that many immediately recognized as a threat to the Internet’s integrity and functionality; “here” being today’s Internet where spam dominates e-mail and costs well over a hundred billion dollars per year. Some spam milestones 1978: First unsolicited e-mail sent to large number of users (Einar Stefferud to ARPANET) 1982: First e-mail chain letter 1991: Craig Shergold e-mail chain letter 1993: MAKE.MONEY.FAST spam chain letter 1994: Siegel & Canter “Green Card Lottery” spam kick-starts the commercial spam era 1994: Unsolicited junk e-mail widely known as “spam” 1994: “Good Times Virus” e-mail hoax 1995 : "Spamware" (spamming software) starts developing 1995: abuse@ addresses created to report spam 1995: List of 2 million email addresses offered for sale 2000: Taiwan (.tw) becomes the spam capital of the world 2000: Nigerian scam spam becomes infamous 2001: List of 209 million email addresses offered for sale 2007: 25% of the 600 million computers on the Internet could be spambots. 2008: Spam makes up 70% of all e-mails sent 2008: Up to 25% of all computers could be being used as spambots 2009: Spam predicted to cost $130 billion globally Sources 150 million bots Calculating the true cost of fighting spam Canter & Siegel Cost of Spam is Flattening — Our 2009 Predictions Cost optimization for e-mail infrastructures: Gartner ID G00164905 (2009) E-mail marketing: best practices - Optin E-mail marketing: best practices - MobileStorm Internet 2008 in numbers Keith Lynch's timeline of spam related terms and concepts Origin of the term "spam" to mean net abuse Return Path Q2 2008 (E-mail performance whitepaper) Spam ROI: Profit on 1 in 12.5m Response Rate Spam Costs Billions. The cost of spam in terms of lost productivity has reached $21.58 billion annually Spam filter software to block spam The Cost Impact of Spam Filters: Measuring the Effect of Information System Technologies in Organizations The Cost Of The War On Spam The Real Cost of Spam What spam really costs, Part I What spam really costs, Part II |
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