Did the CEO/MD hand over their company’s control to Microsoft?

Do you have third-party software controlling in the company you’re about to invest in? Would you know if you did? What would be the effect on sales if inappropriate software is being used? How would you know the impact? This blog looks at one area where the technology you take for granted may have a real impact on the viability of the company you’re about to invest in.

In the last week two correspondents’ email systems have decided that my email was spam and returned them. If I didn’t know them personally and call them to tell them about the problem, they would never know. My correspondents were not even aware that messages were being checked, let alone rejected from legitimate people. The message telling me my correspondence was rejected was terse and accusative implying the problem was mine. If I were a potential customer, I would be likely to give up and go away. A lost sale. Could have been the email from a key customer. The key customer who might eventually have led to the Company Exit.

Who are the people who reject messages and how much email are they causing to be incorrectly rejected (how many false-positives are there)?

Here is a table of some of the anti-spam companies I have come across recently (in no particular order) :

Company providing service Comments How to get email through
Barracuda Networks, California “World leader in email and Web security” Register on their website.
Softcom A Danish company. Unknown.
Frontbridge A Microsoft company. Unknown.
Spamhaus.org Used by The Carbon Trust. Make a request via website.
Yahoo Provide anti-spam service for BT Internet . Wait 48 hours and try again. If not successful, fill in website form.
Composite Blocking List GlobalGold of Harlow use the CBL. “The CBL expects you to resolve the problem.” And “Of late a lot of people are emailing us and asking us to delist an IP address. We can’t do it more quickly than you can. It’s a LOT faster if you do it yourself.”
Hostedmail.com No website. Owned by contactprivacy.com of Toronto, Canada. None.

All of these companies have rejected one or more email messages from me. And as you can see, their attitude ranges from: “don’t care” to “if you feel lucky…”. Although it may seem reasonable to be asked to register on a website to send your email, consider the following issues:

  • How many websites will you have to register on?
  • What if the email telling you about the rejected email was, in fact, a spoof (called “phishing” in the trade)? That email asks you to click on a link taking you to a website to enter your email address. Actually that link may take you to a website that installs a Trojan on your PC and secondly once they have your email address, what will they do with it?

So what are the real false positive rates? I’ve done some web research and there is very little hard evidence. Phrases like “our system rejects less than 1%” and “between 2% and 7% including email to no-existent accounts” can be found on web sites. So little help there.

For me over the last 12 months, it works out at about 1 in every 200 emails being incorrectly rejected – that’s 0.5%.

What are the consequences of such a high false positive rate?  Consider Barracuda Networks. They allowed through 156,063,328 emails on the 3rd May 2010. Assuming my usage patterns are representative, this suggests that Barracuda Networks, just one company, is responsible for over 3/4 million legitimate emails being rejected in one day!

So, what does this mean for a prospective target investment?

  • Business Angels should check all services being provided to a company. Look through the list of invoices paid and find out what they provide to the company. In particular pay attention to those companies with internet access in place since the actual provider of anti-spam service may be hidden.
  • Business Angels should ask what the rational was for using the service and what affect the false positive rate has had on customers to date. This question may provide some insight into how the management team look at their business processes.
  • Business Angels should be aware of the damage incorrect positives has on the reputation of the company they are investing in.

In the last year the number of emails rejected by anti-spam service providers appears to be increasing. As this increases, more and more businesses are likely to lose customers/suppliers and never know why. Anti-spam measures are starting to bite in a way many Managing Directors and CEOs have not considered…

This Post Has One Comment

  1. It’s just the tip of the iceberg though. Far too many SME’s don’t properly manage their IT and as a result they’re losing not only customers but often any chance at being at all profitable.

    Just recently I’ve been offering consulting with a business that went under as a result of out of control costs caused by their failure to understand the importance of their IT and how it could have been reducing their costs. The business is now running with better IT and far fewer staff (therefore less overheads).

    In short small businesses need to invest in IT, which doesn’t have to mean spending lots of cash, sometimes it’s better to spend the time making sure the IT is right.

Leave a Reply

Your email address will not be published. Required fields are marked *