andrew.kantor@roanoke.com

981-3384

A Blacksburg company has been cashing in on the needs and fears of a lot of smaller businesses.

Webmail.us (formerly Excedent Technologies) provides e-mail hosting services to small- and medium-sized companies around the world. In other words, it handles all a business's e-mail needs - managing every aspect of the computers and software that process incoming and outgoing messages.

In these days of spam and viruses, it's a growing market. Webmail.us increased its revenue 175 percent from 2003 to 2004 (although the company would not disclose the actual revenue figures). In the last 18 months it has hired 14 employees, bringing its payroll to 21, and continues to hire one or two a month. It just signed up its 5,000th customer and is adding them at the rate of several hundred a month.

And, said Chief Executive Officer Pat Matthews, "We are profitable and cash-flow positive."

All this without any outside funding; it got its start in 1999 with about $100,000 from friends and family.

The secret of its success is tied to the success of e-mail as a critical business tool.

To most people, using e-mail is as simple as starting Outlook Express and reading or sending messages.

But there's a lot going on behind the scenes, whether your e-mail is handled by your company or your Internet service provider. Mail servers - powerful computers that handle a lot of a business's data tasks - have to take in thousands of incoming messages each day. Those must be separated into the right mailboxes; the servers also take your outgoing messages and route them across the Internet.

These days, those servers are likely running some kind of anti-virus software to protect you and other Internet users from malicious software. And more and more companies and ISPs also run corporate anti-spam products to stem the ever-growing tide of junk messages.

But all this hardware and software needs to be maintained - a potential time sink for a small company.

That's where Matthews' company comes in. In a nutshell, it handles a company's e-mail, soup to nuts.

"Managing an e-mail system is a constant, ongoing task," Matthews said. "It's not like other software ... it literally needs to be updated daily."

A company concerned with viruses, spam and the latest scourge, "phishing," could have its hands full. Matthews is counting on those companies seeing the benefits of handing off the maintenance and the problems.

"It's cost effective these days to outsource instead of going out and purchasing hardware and software," he said. "Spam is still on the rise, computer viruses are still out there, and one thing that everybody is talking about is phishing attacks." Phishing involves someone trying to trick you into giving away your bank account or credit card information, often through messages that appear to be from legitimate financial institutions or businesses.

David Poteet, president of New City Media, which develops Web sites and applications for a variety of companies, said his company switched to Webmail.us last year, and brought a number of its clients along as well.

"We were running our own mail server both for ourselves and for our hosting clients," Poteet said. And the spam and viruses were pouring in. "It was getting to the point where it was beyond our ability to deal with the filtering."

New City Media gave its customers the option to pay a small fee to have Webmail.us handle their messaging, and most, said Poteet, "were happy to spend 10 or 15 dollars a month to end the flood of spam and viruses." (Webmail.us charges $2.50 per month for a single account with discounts for businesses that use more; 25 addresses would cost a company $35 per month.)

The alternative would have been to have New City Media manage the mail system, or, like many companies, to run it themselves.

As Matthews put it, running your own e-mail services "means building or buying, installing, and managing [the servers]. Then you integrate the antivirus, then you integrate the anti-spam, then you work with your antivirus vendor to set up anti-phishing."

In other words, it's often worth it to outsource.

Webmail.us has been successful enough to move to new digs within the Virginia Tech Corporate Research Center. Matthews said the company has also been talking with local private investors to raise capital as part of a new round of funding.

"We were shooting to raise $500,000," he said. "We're going to fall a little short of that, but in the last 12 months our business has been operating so well ... it has allowed us to close off funding a little short."