The e-retailer heads into the holiday shopping season behind a 30% increase in fulfillment spending and a widening net loss. North American sales increased ...
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The upshot of all this is that many companies will choose to outsource the e-mail puzzle calculations or build their own in-house server farms. In the weeks and months following any puzzle solution announcement by the major ISPs, we will likely see many companies offering outsourced puzzle solution calculation services.
Based on my calculations, the likely cost for outsourced e-mail puzzle calculations will be from 1/2 to 1 cent per e-mail. So sending a newsletter to 100,000 subscribers will cost $500 to $1,000. That may seem like a lot, but compared to physical mail postage at $37,000, e-mail is still inexpensive.
You could also build your own in-house mail server farm. Ten mail servers running puzzles 24/7 could be built for under $100,000, but of course server management and personnel costs go up from there.
It’s a lot more expensive than what we’ve all been used to. This is where the criticism of the puzzle solution surfaces: many consider it too expensive for legitimate e-mail marketers. Consider, however, that for the first time in years, the e-mail channel would be virtually pollution-free. The e-mails that do get sent will very likely be read. End users won’t have to wade through hundreds of spam e-mails each day, and they’ll pay far more attention to the e-mails they do receive. E-mail would, without question, experience a resurgence in credibility and utility. E-mail open rates would surge.
There’s no guarantee that the puzzle solution will become the spam solution chosen by the Internet community. It presently appears to be the most viable solution for stopping spam, but there are political and technical barriers to its widespread implementation. The estimate of 10 seconds per e-mail isn’t set in stone, for one thing.
There’s also the risk that the puzzle solution technology could somehow be cracked, meaning that hackers would find a way to bypass the 10-second requirement and send counterfeit stamped e-mails at a million per hour, spam-style. Microsoft hasn’t released technical details, and no source code is available to the developer community, so no one can yet say whether the technology will be secure.
What is clear, however, is that the Internet community is determined to stop spam, and the subsequent costs to legitimate e-mail marketers will not be their primary concern. ISPs like AOL are buried under a costly avalanche of spam, and enforcing something like the puzzle solution would save them millions of dollars each year while enhancing the user experience of AOL customers.
The fact that such solutions will cost you an extra $1,000 every time you e-mail 100,000 subscribers is simply not their concern.
The puzzle solution also has ramifications on the consumer side of e-mail as well. Since ISPs would be reviewing e-mail for the stamp of approval, personal e-mails would have to be stamped. That means that the ISPs will have to run their customers’ e-mail through server-solving puzzles. But since the e-mail sending/receiving formula is asymmetrical, that is, consumers send far less e-mail than they receive, ISPs would experience a net savings.
The most likely scenario would be ISPs limiting the outbound e-mail volume of users to, say, 50 e-mails per day. That translates into 500 seconds of CPU time per day per user, which is a little over 8 minutes. The average user would typically send far less than that, and some users would send no e-mail, so the actual expenditure of CPU time per user might be only 1 minute on average. This means each outbound mail server at an ISP could handle the outbound e-mail demand for 1,400 members or users on an ongoing basis.
Free e-mail is history
Large ISPs like AOL would need lots of outbound mail servers to support a user base of millions of people, of course. But under the puzzle solution, they could take all the incoming mail servers currently handling spam and reconfigure them to run puzzle calculations for their members’ outbound e-mail. If additional servers are needed, adding them would be inexpensive, since the puzzle solution takes the same 10 seconds even on slower, less expensive machines thanks to its CPU calibration logic. Meanwhile, ISPs would be greatly enhancing the user experience of their members thanks to the halting of incoming spam.
Whether it is the puzzle solution or something else, the rules of sending and receiving e-mail are about to be scrapped and rewritten. There’s little doubt that the days of sending unlimited volumes of e-mail for free will soon be history. Simultaneously, e-mail as a permission marketing medium will finally get the credit it deserves for being a fast, low-cost, personalized communications medium that can enhance company/customer relationships at many levels.
Mike Adams is CEO of Arial Software LLC.