Everybody knows that email is important, but should each company develop, own, support, and maintain its own email infrastructure, or should it instead use lower-cost or free services? That is the question that Michael Jagger, CEO of Provident Security, faced as he contemplated a costly upgrade of the company's internal email infrastructure. Founded in 1996 by Michael Jagger as a way to pay his undergraduate tuition, Provident started out as a company that provided special event security. Today, it has grown to become a full-service security company with more than 4500 customers and 200 employees. Offering a wide range of services for residential, commercial, and industrial clients, Provident is organized into three divisions: guard services, alarm services, and special event/personal protection. Guard services offers uniformed security guards and specializes in high-tech and pharmaceutical markets; it also offers community and mobile patrol services that guarantee a five-minute response to burglar alarms and client emergencies. The alarm services division installs, services, and monitors alarm systems for residential and industrial clients, including sophisticated closed circuit television (CCTV) and access control systems for the high-risk buildings of clients such as the federal government. The special event/personal protection division provides security for many important public figures, including elected officials and business leaders. The company's email system was based on Microsoft Exchange/Outlook and completely managed by the company's small but effective internal information systems staff. After an increase in volume, however, the system was beginning to show signs of strain. In addition, recent analysis indicated that to cope with projected growth, Provident would have to invest a further $60 000 in a combination of hardware and software upgrades and operating expenses. To combat this expense, one employee suggested that Provident convert its internal email to Google's $50-per-user corporate G-mail service. This service was very similar to Google's popular consumer email system and could be accessed from any Web browser, which meant that it required no hardware or software and was available anywhere. And not only was the service comparatively inexpensive, but it allowed Provident to maintain its existing email IDs and it integrated easily into other popular and useful Google applications, such as Google Docs and Google Calendar. A few other organizations had already converted to G-mail, and as he considered whether to authorize the increased expenditure or not, Michael wondered whether it was time for Provident to get out of the email business.

Question:

How does the industry in which a firm operates or the actions of its competitors affect your recommendation? (Hint: Would your recommendation differ if Provident was a health services organization?)