Enterprises move into cloud email

Gartner warns of 'fundamental restructuring' of email market

Robert Jaques, vnunet.com 02 Jul 2008

A push into the cloud email market by large suppliers will cause a " fundamental restructuring" of the email market, according to a new Gartner report.

The percentage of enterprise email delivered by a cloud-computing model will rocket from just one per cent in 2007 to 20 per cent in 2012, the analyst firm said.

"Events during the past year have created the conditions for the rapid growth of the cloud delivery model for enterprise email," said Matthew Cain, research vice president at Gartner.

"Companies such as Google, Yahoo, Dell and Microsoft are all making major investments in cloud computing."

Cain defines the cloud model as a style of computing where massively scalable IT-related capabilities are provided "as a service" using internet technologies to multiple external customers.

The analyst added that, until recently, the cloud computing market has largely been the domain of small suppliers, but has been rapidly transformed into a market where the largest IT companies are aggressively competing.

Vendors such as Google, Microsoft and Yahoo have consumer mail platforms that serve millions of users, and the opportunity and the challenge is to transfer the economies of consumer mail to enterprises.

Gartner forecasts that the uptake of cloud email will start with small companies (the only area where it is successful now) and move to midsize companies. By 2012, the cloud model will serve the largest firms with more than 50,000 seats.

"As large suppliers push into cloud email we will see a fundamental restructuring of the email market," said Cain.

"Traditional email software-as-a-service vendors will come under tremendous price pressure from mega-scale vendors.

"Established traditional dedicated server model hosting vendors will fare better based on their ability to offer larger-scale and more customised email."

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