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What Is an SMTP Server, and How Does It Work?

Angela Stringfellow

Last updated on

There are dozens of ways to communicate digitally today, yet email still stands the test of time. Email remains a prevalent way to communicate for businesses and individuals alike. An estimated 333 billion emails are sent daily, and that number is expected to grow to 376 billion by 2025. For most, emails are as simple as composing a message and clicking “send,” but the process behind sending emails is much more complex.

Behind the scenes, there are multiple systems, servers, and protocols that help deliver your emails. A critical email protocol known as SMTP helps set everything in motion and is at the core of sending emails. What is an SMTP server, and how does it work? We define what it is, how it works and discuss the pros and cons of running an SMTP server on your own versus using a third-party service.

Defining Simple Mail Transfer Protocol (SMTP)

Simple Mail Transfer Protocol (SMTP) is a standard method for transferring information via email, also known as an "email protocol." Email protocols are sets of rules used explicitly for sending email messages from one email account to another via the internet. Email protocols allow different email clients (Gmail, Outlook, Yahoo, etc.) and email accounts to exchange information easily.

SMTP is one of the most common email protocols and is the only dedicated protocol for sending emails. Email clients rely on SMTP to push messages from a sender account to a receiving account.

What Is an SMTP Server?

Now that we’ve defined what Simple Mail Transfer Protocol (SMTP) is, we can discuss SMTP servers. A server is software that provides a service to other computer applications within a network. An SMTP server sends, receives, and relays email messages using the internet to transfer information from one server to another.

SMTP servers act as the delivery tool that processes and sends emails from one destination to another. SMTP servers can deliver single, transactional, and bulk emails securely within minutes.

How Does SMTP Work?

SMTP can be a complex protocol, but we’ll explain the technical rules, commands, and sending processes without getting too granular.

SMTP servers are used over common email providers because SMTP are dedicated servers that allow scaling. The first step is to set up the SMTP server, which will enable email clients like Gmail, Outlook, or Apple Mail to communicate with your server. With the communication stream open, you are now ready to send emails.

Once you’ve sent an email, the email client will open an SMTP connection to your server. The SMTP server uses the internet to locate and talk to a domain name server (DNS). The DNS will provide the server information to help the email reach the right recipient. The server and the DNS work together to locate information, or Mail Exchanger (MX) records such as the sender’s email address, the recipient’s email address, and the email’s content.

If the sender and receiver’s domains are the same, the email will be sent instantly. If the domains differ, (for example, you’re sending an email from a Gmail account to an Outlook account), the DNS will need to identify the recipient’s domain to ensure it is sent to the correct server. Once this information is shared with the recipient server, that server will take over to complete the delivery and send the message to the recipient’s inbox.

Errors can occur when email domains and accounts change, or when other technical issues arise. Emails may bounce, be blocked, or get reported as spam, or technical issues between servers can occur. This is why it is essential to have an IT team to help with technical issues and why marketing teams should always scrub and “clean” email lists to help prevent errors and bounces.

Running an SMTP Server — Use Your Own or a Third-Party Service?

Now that you’re ready to run an SMTP server, the big question is, do you use your own, or a third-party service? There’s no “right” answer. It truly depends on your needs and the resources you have. Let’s start by looking at what it would take to run your own SMTP server.

Running Your Own SMTP Server

Running your own SMTP server can have many benefits, such as no sending limits. Some third-party providers will put caps or limitations on how many emails you can send per day, week, month, etc. With a dedicated SMTP, you can send all the emails you want. Another significant aspect of having your own server is having full access to monitor all delivery information. This can help you discover error codes and help you improve your email methodology. You also remain in complete control of your email lists, which is important for preserving private data from your company and your customers.

Though there are many benefits to running your own SMTP server, you should first consider whether or not you have the resources to accommodate it. Not only will you need someone knowledgeable to set it up, but SMTP servers need to be monitored regularly. For example, you’ll likely need a dedicated team to monitor and maintain the server, which can be costly.

Another thing to consider is that running your own SMTP server will require it to be local. When you have a local server, it can be vulnerable to power and connectivity issues in your area. You’ll need backup servers and other failsafe protections in place, plus a staff member with technical knowledge to fix things when they do fail.

Lastly, deliverability and security issues can arise. Even with a great team, there are still challenges preventing spammers from accessing your server. You’ll need to have protection plans and processes in place to detect unauthorized spam and adjust strategies as needed. However, if you have the resources to set up and maintain your own SMTP server, the benefits could make this a good option for you.

Using a Third-Party Email Service

Hiring a third-party email service can be an excellent option for companies that don’t have the staff resources or just don’t want to deal with the hassle of running their own SMTP server. Whatever company you choose will typically take care of the setup, monitoring, and maintenance of your email server. The plus side is that these services already have expert teams for technical support, security, and failsafe plans.

Third-party companies often have high security and IT support standards already wrapped into the service. You shouldn’t have to worry about additional costs, as most services are billed at a fixed rate. Lastly, these companies excel in emails. They know the ins and outs of ISPs and mailbox providers to ensure reliable deliverability. They have their processes figured out and know what works, so there’s no time wasted with trial and error.

Hiring a third-party email service can be less hassle and more secure, cost-effective, and reliable. However, a drawback for some is that you’re not in complete control. You have to rely on others to alert you of issues, relay information, and trust that they’re using the best practices. Not only that, but you also have to share information about your company and share your customer’s data (email lists) with them.

Dealing with their terms and conditions can also be a pitfall. As we mentioned above, sometimes providers have caps on how many emails you can send in a specific time frame. When hiring an email service provider, be sure to check for limitations and read reviews to find someone with superior customer support and domain expertise.


When it comes to marketing, advertising, and communication, email is still leading the race. If you want to send powerful and effective marketing or business emails, you’ll need to utilize an SMTP server.

If you're interested in setting up your own SMTP server, make sure you have the resources to negate some potentially expensive challenges. A lack of resources or the expense of running their own SMTP server is the main reason many companies choose to use third-party providers. These services can design hassle-free email infrastructures for reliable and secure sending. If you’re looking for a more robust way to notify your users about important information, promotions, and updates, MagicBell provides a notification inbox solution that developers can implement as a plug-and-play notification solution. Additionally, MagicBell’s inbox system makes life easier for developers as it can be implemented in mere minutes.