This Is the Biggest Email Provider You've Never Heard Of A little-known company handles huge volumes of marketing missives, customer service notes and fraud alerts for the likes of American Express, Groupon, and PayPal.
This story originally appeared on Fortune Magazine
What company manages more than 2.5 trillion marketing notices, fraud alerts, statement updates and customer service messages annually for the likes of American Express, Facebook, Groupon, Oracle, PayPal, Salesforce, and Twitter?
Kudos if you guessed 17-year-old Message Systems, which is behind more than 20% of all "legitimate email" sent globally for a who's-who list of Fortune 500 businesses, telecommunications service providers and email marketing companies. In an environment fraught with spam concerns and nefarious phishing campaigns, that's not an easy feat but it's kind of a necessary evil.
"Email doesn't always get a lot of respect, but it's still the No. 1 communications channel on the Internet. "It's the one thing that works for marketers and customer service organizations," said Message Systems CEO Phillip Merrick, who joined the 150-person Columbia, Md.-based organization in April. If you recognize his name, it's because Merrick took software company WebMethods public in 2000 in what was then one of the biggest tech IPOs ever.
To be clear, Message Systems isn't the sort of service that runs your internal communications. It works with websites or and enterprise applications to send messages when certain things happen, such as when someone tries to use a credit card fraudulently or when a payment is due. Today, most of its traffic comes in the form of email, but it could also send push notifications to a mobile app or SMS text updates to a smartphone.
For this, businesses can expect to pay an annual fee starting around $50,000. (The free service lets someone send up to 10,000 messages in a month, but Message Systems will cut off anyone it thinks is a spammer.)
It's tough to find a direct competitor, but some services offered by venture capital darling Twilio, such as a feature that lets businesses embed text messaging capabilities into a mobile app, are broadly similar. (Twilio has $103.7 million to the older company's $38 million, although it's admittedly not an apples-to-apples comparison.)
Indeed, pushing more of Message Systems' services into the cloud is high on Merrick's agenda. "What we do is sufficiently specialized, this is something that companies don't want to do themselves," he said.