Synacor has expanded its relationship with Windstream in the form of a multi-year agreement to provide hosted email for the service provider.
Financial terms were not announced, but the hosted agreement also includes email monetization via way of advertising. The agreement also broadens Synacor’s deal with Windstream, which has already been a portal customer of Synacor’s.
The Windstream deal also expands Synacor’s email and messaging business. Synacor acquired Zimbra, a provider of open source-based email, messaging and collaboration software, in 2015.
Notably, Windstream is outsourcing its email needs to Synacor as another major ISP, Verizon, shifts gears. As reported last week, Verizon is closing down its email business, but, as part of the transition, will provide its broadband customers with an option to retain their Verizon.net email addresses via AOL, which Verizon acquired in mid-2015, or shift to a different provider such as Google, Yahoo or Live Mail. Verizon, which acknowledged that there are “more capable email platforms out there,” is also in the process of acquiring certain Yahoo Internet assets, so it will soon have two major email platforms at its disposal.
Himesh Bhise, Synacor’s CEO, said there are still major synergies between email and portal products, as together they drive engagement, traffic and monetization.
“Rumors of the demise of email are greatly exaggerated,” he said, noting that it’s still a key tool for marketing, advertising, and customer retention. “Fundamentally, it’s going to continue to be an important platform.”
Bhise said Synacor won about 300 new small and medium business contracts for the licensing of Zimbra’s email software. Bhise also estimates that Synacor has about 500 million mailboxes on Zimbra’s platform worldwide.
As for future email-facing growth, he sees it coming from both consumer ISP and enterprise segments through direct sales and via Synacor’s reseller channels.
In a recent whitepaper focused on the email business, Synacor holds that ISPs should view inactive email accounts “as the lowest hanging of all potential fruit -- they have already walked through your door, you just have to turn on the lights and give them more of a reason to stick around.”
Synacor also believes that it’s not too late to drive consumer usage of ISP email, despite the popularity of “free” email services from sources such as Hotmail, Yahoo and Gmail.