Do Mimecast Increases Amount to Price Gouging?

Critics allege the email security and archiving vendor is capitalizing on the Jan. 11 closure of Intel’s competing MacAfee SaaS Email Security product line, also known as MX Logic.

Aldrin Brown, Editor-in-Chief

January 20, 2017

3 Min Read
Do Mimecast Increases Amount to Price Gouging

A new pricing structure by email security and archiving firm Mimecast is ruffling the feathers of some of its MSP partners, who allege the steep increases appear timed to coincide with the shuttering of the vendor’s main competitor. 

Earlier this month, Mimecast informed partners that it had “remodeled the price lists” to focus on just three service packages and three popular add-ons, resulting in an increase of the minimum order per customer to $1,200 per year.

The changes go into effect on April 4.

Writing in a blog post this week, principals at Chicago, Ill., MSP Switchfast Technologies accused Mimecast of capitalizing on the Jan. 11 discontinuation of Intel’s MacAfee SaaS Email Security product line, also known as MX Logic.

“It appears that Mimecast knew they had their MSP partners’ captive and decided to damage them just to improve their profit and stock price,” Switchfast’s Nik Vargas alleged. “Their decision is short-sighted and will cost them MSP business and market share long-term.”

Switchfast said the new pricing is particularly punitive to smaller MSPs.

Mimecast officials told customers that the streamlined packaging would ultimately be in the best interests of the vendor, its partner MSPs and end users.

“Ultimately, our ability to effectively serve sub-25-seat organizations with our TTP (Targeted Threat Protection) offering drove the decision to change to a bundle/minimum AOV (average order value),” Eli Kalil, Mimecast’s senior vice president for global channel sales, wrote in an email to partners.

“In order to best serve customers of all sizes, we made programmatic changes to how we price and package our solutions to small organizations,” the email continued. “We have a renewed focus on those who are most concerned with advanced security and archival use cases, which is where we see the bulk of the market opportunity for partners.”

The changes have drawn a fair bit of criticism on the Internet, with some MSPs trading advice about possible alternatives to Mimecast.

“Basically, they’re eliminating the entry level filtering packages and replacing them with bundles,” a poster identified as BostonMSP wrote in a discussion on Reddit. “The lowest of the bundles costs more than their Mimecast Express package and comes with considerably less features.”

Mimecast suggested that MSPs serving smaller customers consider other options.

“If you have smaller customers who only care about isolated targeted threats or advanced archival, then the logical choice might be offering them Microsoft native 365, as it should support them sufficiently and allow you to continue to add value and price the service effectively for your SMB customers,” Kalil’s email said.

But Switchfast’s Vargas argues that three months notice for the change is inadequate. Intel/MacAfee gave more than a year of notice before shutting down that service, during which time many of its former customers engaged Mimecast, he wrote.

“MSPs have spent the better part of the past year pitching Mimecast as a replacement and setting up clients with the service,” the blog said. “After configuring thousands of end users with Mimecast, MSPs are rewarded with this suspiciously timed, price-gouging maneuver.”

Mimecast officials defended the move in a statement late Thursday.

“Mimecast values our relationships with all of our MSPs and we’re looking forward to working together to more effectively best address the needs of both our customers and partners,” Kalil said. 


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About the Author(s)

Aldrin Brown

Editor-in-Chief, Penton

Veteran journalist Aldrin Brown comes to Penton Technology from Empire Digital Strategies, a business-to-business consulting firm that he founded that provides e-commerce, content and social media solutions to businesses, nonprofits and other organizations seeking to create or grow their digital presence.

Previously, Brown served as the Desert Bureau Chief for City News Service in Southern California and Regional Editor for Patch, AOL's network of local news sites. At Patch, he managed a staff of journalists and more than 30 hyper-local and business news and information websites throughout California. In addition to his work in technology and business, Brown was the city editor for The Sun, a daily newspaper based in San Bernardino, CA; the college sports editor at The Tennessean, Nashville, TN; and an investigative reporter at the Orange County Register, Santa Ana, CA.


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