Business ideas that changed the world: Email

The business idea that shaped the technological, commercial and social lives we have today

When: 1971
Where: USA
Why: By providing a cheaper, quicker and more convenient form of correspondence, email has changed the way we communicate for ever
How: Scientists and technologists wanted to create a method of exchanging digital messages electronically
Who: Many people are credited with contributing to email’s evolution, but Ray Tomlinson is often hailed as its original inventor
Fact: Queen Elizabeth II was the first head of state to send a message by email

For most people, it’s hard to imagine life without email. Whether it’s to communicate with colleagues or clients or to make plans with friends for the weekend, we all rely heavily on this digital method of communication. You only need to see the pained expressions on colleagues’ faces when the email server goes down in the office, to grasp its significance to modern living.

Globalisation and the increased popularity of outsourcing mean that colleagues are often scattered across the globe: email is an instant way of communicating with them without the cost, or hassle, of organising face-to-face meetings or conference calls.

The background

Although, for the most part, email (short for electronic mail) has only been part of our everyday lives for the last couple of decades, it’s actually been knocking around, in one form or another, since the early 1960s. Not only does it pre-date the internet as we know it today; it was arguably a key tool in its creation.

Electronic message exchange in its most basic form has existed from the old days of timesharing computers, which were first unveiled at Massachusetts Institute of Technology in the USA in 1961. This technology enabled multiple users to connect to the same mainframe computer via remote dial-up. In 1965, email was devised to enable the various users of a time-sharing mainframe to communicate with one another through a process that was as simple as leaving a memo on a colleague’s desk.

This early form of email enabled hundreds of co-workers to correspond. But the messages could only be exchanged between people working on the same mainframe, and there was little or no interoperability. Even when the technology developed as far as allowing inter-organisation messaging, mainframes could only communicate if they ran the same email system and proprietary protocol.  Just as it is necessary to write an address on an envelope before a letter is put in the post-box, computers needed to identify where they should be sending these important, and sometimes sensitive, communications.

In 1971 Ray Tomlinson, an engineer working on the development of ARPANET, the antecedent of today’s internet, set to work on a system for sending emails between separate computers. In a process that he claims took only a few hours, Tomlinson took a program called SNDMSG, capable of sending emails over a local system, and merged it with another program called CPYNET, which had been developed to send files to other computers connected on ARPANET.

Tomlinson then picked the ‘@’ symbol from a keyboard to separate the name of the user or recipient of the email, and created the simple convention ‘user’s name-@-their computer’s name’ for email addresses. In October 1971 he sent the first-ever email from one machine to another, sitting right alongside it, using the ARPANET connection. Although Tomlinson’s memories of the event are vague – he doesn’t even remember the content of the message – he is now widely credited as the ‘father of email’. And through the various incarnations of email and the internet, the ‘@’ sign has endured, becoming a symbol of the digital age.

Email quickly became the most popular application on the ARPANET, and began to generate interest from further afield. Some of the early adopters of email were in the US military because it was a good way to communicate with comrades stationed at other bases. And it wasn’t long before its use spread to the corporate world, with the emergence of tailored commercial packages. By 1978, 75% of ARPANET traffic was email.

Innovations in the market

Another key technological, and social, development that influenced the evolution of email was the rising popularity of the personal computer, or PC. These computers contained a piece of software called an offline reader, which allowed the user to store their email on their own machines – where they could read them and prepare replies – without actually being connected to the network, almost like an early version of Microsoft Outlook. This was particularly useful in places where connection costs (basically the price of a telephone call to the nearest email system) were expensive; once an email had been written, users only needed to connect in order to send it.

In the early 1980s a flurry of new interconnected computer networks, inspired by ARPANET, began to spring up, creating the need for a set of industry standards that were capable of fostering communication between the new networks. In 1982 the simple message transfer protocol, or SMTP, was established as a standard for the sending and receiving of email; two years later, the Post Office Protocol, or POP, was created to homogenise the storage of email. Both formula were fairly basic but these early standards played a crucial role in building bridges between the various networks; anyone could now send email to anyone else, simply because they used the same essential protocol.

With common standards in place, people began to wake up to the potential of email. In 1983 MCI Mail, widely credited as the world’s first commercial email service, opened for business with a grand press conference in Washington, DC. Other services followed suit; in the late 1980s two of the most recognisable early email systems, Pegasus and Microsoft Mail, went live to the public, while CompuServe developed an email service for its subscribers. Then, in 1992, Microsoft Outlook, an integral tool for business email, went live.

These easy-to-use, inexpensive services played a crucial role in the subsequent propagation of email. Whereas in the past a specialist service was needed to send emails, a host of companies were now giving away email accounts and inviting users to send and receive messages, with no need for technical knowledge or pricey equipment.

Much faster and cheaper than conventional mail, and with the ability to send attachments such as pictures, documents and spreadsheets, the advantages of email rapidly struck businesses around the world. Sending out copies to multiple recipients was considerably easier with email than with any other form of communication.

With global internet usage increasing to 16 million people in 1995, and then to 147 million people in 1998, all the conditions were in place for email to become a cornerstone of people’s daily life. In 1990, around 15 million email inboxes were in use worldwide; by the end of 2000, this had increased to 891 million. To date worldwide email accounts continues to grow to 4.1 billion and this is expected to reach approximately 5.2 billion by the end of 2018.

Commercial impact

As more and more people began to connect to the internet in the mid-1990s, email quickly became big business. In 1997, just a year after it launched, Hotmail was sold to Microsoft for $400m – demonstrating that the market leaders were willing to pay vast sums for a simple, accessible product tailored to the email market. The Lapel button was used to market the MCI Mail electronic mail service, ca. 1985.

The creation of more sophisticated anti-spam tools did little to check the rise of email marketing, which has grown steadily, in line with overall email use. The roots of email marketing were laid in the 1980s, when bulletin boards, the precursors of modern online forums, began to receive messages about promotional offers and product launches. By 1995, the number of advertisements sent by email was outstripping the number sent out by regular mail, and the volume of marketing messages has continued to increase exponentially over subsequent years.

The wider commercial impact on business is impossible to calculate; there’s no way of adding up the number of sales, mergers and staff hires that have been triggered by email correspondence.

Email systems such as Microsoft Outlook have evolved into fully fledged personal organisers, placing email at the heart of people’s daily lives, and the emergence of chat-based programmes such as Windows Live Messenger, not to mention social media, video-conferencing and online dating sites, has made online correspondence a familiar convention for millions.

In a 2010 study from technology market research house Radicati Group the majority of business communication was done through email with over 108.7 billion emails sent and received everyday day. To date mail use continues to grow in the business sector, with Radicati forcasting that by 2018, business email will account for over 139.4 billion emails sent and received per day. Every aspect of email is now extremely lucrative – the global IT security market, which focuses heavily on email, is now worth $16bn, while the value of email marketing has reached £350m in the UK alone.

The rise of email has also led to the demise of ‘snail mail’. Around the world the volume of conventional letters posted has fallen steadily, threatening the viability of postal services in many mature economies.

What does the email look like today?

Most of the business world relies upon communications between people who are not physically in the same building or city or even on the same continent – especially in the 21st century, when globalisation means that teams are more likely than ever to be geographically dispersed and businesses of all sizes require cheap, flexible correspondence tools.

Furthermore, the pace of change shows no sign of slowing down. Perhaps the biggest single change in email was the emergence of the smartphone, which enabled users to check their emails on their phone’s screen. The convenience of the smartphone, which allows people to browse their messages from almost anywhere on earth, has led to huge market takeup with the majority of people now checking email on their phones rather than desktop or laptop.

The development of cloud computing, which allows companies and individuals to access key applications online and avoids the need for expensive desktop software, is another key change. Cloud computing allows a business to ‘rent’ an email server, paying an external party to manage their email system and install all the necessary software updates – an option which most businesses have now adopted.

Email marketing has also greatly evolved over the years; developing from batched (a standard email was sent out to all and focus was more on the offer that the recipient) to predictive (big data is used to anticipate respondents and therefore influence content) to today's agile email marketing, whereby emails can be updated at the moment of open to suit recipient's time, device, location etc.

Social media platforms, such as Facebook and Twitter, have created their own versions of messaging services, enabling people to privately communicate on the social platforms. However none of which have overtaken email as the predominate communication tool – in fact Facebook's email service, which intended to become the one inbox where users could send and receive emails and messages, was eventually abandoned in 2014.

Today anyone who owns a smartphone must have an email and according to a recent Forbes report, email marketing was the primary channel driving just over one in four online sales this year. And without the invention of the email back in the 1960s we may never have seen the creation of instant messaging services and social networking.

Email remains one of the most significant communication tools in contemporary business and personal life – and appears set to remain important, however it develops next.


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