Outsourcing transactional and marketing email delivery and SMTP as a service – a strategic review of SES, Pure360, Mailchimp, Mailgun and Mandrill

There are two categories of emails sent out by most organisations:

  • Marketing – sent to a segment of the organisations mailing list to promote a service or product (possibly third party)
  • Transactional – sent to an individual user regarding a transaction that they are involved in. e.g. hanging password, adding content, interaction from another user

Pure360 and MailChimp provide excellent turn key SAAS products for sending marketing emails aimed at the Enterprise and SME sectors respectively. Transactional emails have always been more complicated and are generally managed through internally hosted SMTP servers frequently installed as an afterthought alongside web servers. As volumes of email increase deliverability issues become more costly and harder to manage across multiple servers, to this end I am in the process of evaluating Amazon SES (simple email services), Mandrill (recently launched my Mailchimp) and Mailgun (recently acquired by Rackspace).

Pricing

Based on 1 million emails of 50Kb each

  • Amazon SES $105 per month
  • Mailgun $407 per month
  • Mandrill $200 per month
  • Send grid $800 per month (for this reason I’ve not looked into them any further)

Mailchimp and Pure360 pricing is not directly comparable as it is based on list sizes and tends to be negotiated at this scale.

Implementation

All three integrate via proprietary RESTful APIs or SMTP with authentication.
The ability to implement either service by configuring IIS and Postfix SMTP servers to relay email through it has several advantages:

  • very easy to run a pilot
  • eliminates downtime during migration since emails will simply queue
  • applications are not dependent on synchronous web service calls to send emails but can communicate with collocated SMTP servers
  • eliminates vendor lock-in entirely

Integrating via the RESTful APIs involves an extremely high level of vendor lock-in on a technical level due to vendor specific APIs and commercial/product level due to vendor specific features, but quickly delivers functionality that would otherwise have a massive implementation cost.

Feature set

This is the point where I realised that I’m comparing apples and oranges.

Mailgun is a broad product that provides an API to manage mailing lists, receive incoming emails and fire restful event handlers, track the lifecycle of emails and report.

Mandrill provides an API similar to Mailgun but goes further offering template management via the API and through a web interface that also includes rich pre-built reporting tools.

Pure360 and Mailchimp offer complete email marketing solutions in the cloud with integration options.

Amazon SES is a fire and forget SMTP server that lets you do limited aggregate reporting on outcomes (Deliveries, Bounces, Complaint, Rejects) – this is true SMTP as a service with few frills.

Conclusion

SES, Mailchimp/Pure360 and Mandrill/Mailgun are positioned differently on the cloud services spectrum. SES is Infrastructure as a Service (IAAS), Mandrill/Mailgun are Platform as a Service (PAAS) and Mailchimp/Pure360 are Software as a Service (SAAS) and all three approaches to email delivery have their benefits.

IAAS leaves you with the ultimate flexiblility and the lowest transactional costs and is suited for:

  • legacy apps or very simple new builds due to┬álack of migration/implementation costs or lock-in when implemented via SMTP
  • applications that require extremely complex and bespoke features or workflows
  • extremely high volume environments

PAAS has a strong and flexible feature set with higher transactional costs and total vendor lock-in and is suited for:

  • complex transactional email based applications
  • self branded SAAS email services

SAAS has minimal implementation costs (a simple two way sync), marginal costs only slightly higher than PAAS, minimal vendor lock-in since you can always integrate with additional providers, a strong feature set but minimal flexibility so is a good fit for:

  • quick, low cost implementations and pilots to prove markets
  • offering clients integration with a third party service to provide high quality email marketing facilities with limited options for direct monetization for a negligible cost
  • providing in-house email marketing solutions

The PAAS option here has quite a narrow range of applications and I would be very worried about either reinventing the wheel and regretting not going SAAS or lacking flexibility and incurring high costs and so regretting not going IAAS.

If anyone has any recommendations of other providers please get in touch.

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