More Than Half of Enterprise Email Will Live in the Cloud By 2020

Web-based e-mail will comprise at least 10 percent of the license seats in enterprises through 2014, but will hit 55 percent by 2020 as it reaches mass adoption, according to Gartner.

Web-based, or cloud e-mail, is hosted by providers such as Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), VMware’s Zimbra unit and several startups, and provisioned to users over the Web. Many people question the security of this approach.

However, the cloud saves IT administrators the time and hassle of setting up and configuring on-premise e-mail systems such as Microsoft Exchange Server and the Outlook end user software, as well as IBM Lotus Domino Server and Notes end user client.

Gartner, which has keenly tracked the rise of Google’s Gmail, Microsoft Exchange Online and other rivals, recommends smaller businesses, or even sectors such as retail, hospitality and manufacturing to move to cloud-based e-mail over the next two years.

Gartner analyst Tom Austin said the cloud will come to represent the dominant  provisioning model business communication and collaboration technologies in 10 years.

Why will it take that long, when Gmail has 40 million users in Google Apps, and Microsoft Exchange Online will no doubt leverage the company’s massive enterprise reach to gain traction?

Austin blamed "asset inertia," in which businesses are loath to switch from their long-term on-premise e-mail contracts; the focus on strategic, rather than cost-cutting plays to gain competitive advantages, and Webmail systems whose promise is greater than their practice.

Moreover, most businesses who say they use cloud e-mail also retain small on-premise systems to house and protect sensitive data generated by C-level executives.

Austin said businesses hold back from going all in with the cloud because of the perception that early adopters pay a premium in terms of acquisition cost.

Noting that cloud-based systems are forward priced, Austin said businesses should secure cloud contracts now, but force vendors to commit to reducing prices as the cloud e-mail becomes a commodity instead of a novelty.

Google charges $50 a user per year for its Google Apps, which includes Gmail, Google Docs and several other apps. Microsoft Exchange Online is part of Office 365, which includes tiered pricing starting at $6 per user, per month.

Austin’s colleague Matt Cain proclaimed Gmail a credible enterprise e-mail alternative to Microsoft Exchange. Austin and Cain will present their findings at the Gartner Symposium/ITXpo in Orlando, Fla. Next month.  

To read the original eWeek article, click here: Cloud E-mail to Comprise 55% of Enterprise Seats by 2020