Hi. I’m Alec Peterson, the CTO at SparkPost. I’ve been building large-scale email infrastructure for a long time—in fact, I’ve been a member of the leadership team here for 10 years. I love this business, and I know how important getting it right is to our customers, including the developers who do such amazing work with our service.
The last few days have been interesting ones in the transactional ESP market. Mandrill (operated by MailChimp) announced that they were making major changes to their offering, including ending their free tier. Shortly afterwards, SparkPost announced a previously-planned change to our pricing structure, notably increasing our free tier to 100k free emails per month.
While we’ve been absolutely thrilled with the response, we did hear from a couple folks who questioned whether it’s really possible for SparkPost to sustainably offer such a significant free tier. The answer, unequivocally, is yes. I’d like to provide a few details on why we can do it, and why SparkPost is uniquely suited to offer this level of free service.
There are a few things that are important to understand about how we do things at SparkPost. Our history is not only in email infrastructure, but also in delivering the highest performance (meaning most efficient) email infrastructure on the planet. That’s not hyperbole. Before we were SparkPost, we were (and, in fact, still are) Message Systems, the leader in on-premises email infrastructure.
Our customers are the most demanding high-volume senders on the planet. We have several on-premises customers who individually send more email than the entire transactional ESP market combined, and they do so using the Momentum platform on just a couple dozen of servers. To service those customers, we’ve had to push the envelope in terms of performance for the entire existence of our company. In other words, building and optimizing email infrastructure that outperforms anything else on the planet is something that we always have done as an organization. And we’re really good at it.
The fact that our cloud infrastructure is built around the de-facto standard for high-performance email is an undeniably powerful position to be in, making all sorts of things possible. Like, for example, offering 100k emails per month for free.
Our deep experience, however, is only part of the story. We’ve also built a remarkable cloud architecture for our service. When we architected SparkPost, we made a strategic decision to build it upon cloud-based, fully virtualized infrastructure, notably Amazon Web Services (AWS). By leveraging AWS, we’re able to forego worrying about managing our own physical plant with buildings, cages, man-traps, security guards, power, generators, UPSs, racks, servers, spare parts, networks, switches and various transit providers. You get the picture. But just as importantly, we have virtually instantaneous access to as much burst capacity as we could ever need—whenever we need it. And what’s more, when we aren’t sending bursting traffic, that elastic capacity goes away and we stop paying for it. That’s the best of both worlds: virtually unlimited capacity, combined with a highly efficient cost model.
Of course, even the most efficient business can’t run without revenue. And while the free plan we just introduced is a great fit for some senders, we also know that for businesses who need a dedicated IP address, or who need to burst beyond 100k/month, one of our paid service tiers is a better solution. In fact, when we crunch the numbers, our conversion percentages and analysis of customer volume overall tell us that we’re making a really sound business decision. Far from being a threat to our business, the 100k/month free plan is, in fact, a business driver that combines a great long-term option for some senders with a fantastic upgrade path for customers looking to grow their email presence even further.
By the way, I want to also point out that we are not in the business of selling data, and do not ever plan to be. We take privacy really seriously. Respecting it is one of our core principles. We understand that a natural reaction to a generous freemium offer is to assume the provider is selling data to outside parties. However, that’s not the case here, and you have our commitment we will not do this. Not now, not ever.
Our business at SparkPost is email infrastructure. We think MailChimp is a great company, and we have a ton of respect for them and the work they do. We also understand and believe what their CEO said in their announcement letter about a “fit” issue with the Mandrill product. Transactional email isn’t the business they’re in. But it’s the fundamental core of our business, and we’re here for the long haul.
Check us out! Whether you take us up on the 100k free emails per month plan, or a paid plan, we’d really like to have you. Our love for developers runs deep. I think you’ll be impressed.