Cloud email - a tale of two markets

July 1, 2013

Dyslexia mode

Summary:: We seem to be looking at two very different cloud email markets: the SMEs where take up is strong and enterprise, where we have yet to see any significant change. But how quickly might the enterprise adopt?

I was fascinated to read Michael Coté's attention to two very different research surveys on the topic of cloud email. He says:

A while back I posted a quick quote from recent Gartner prognosticating about cloud email. The up-shot was that right now, it’s just about 8% for all types of companies, globally (except India and China for some reason). Someone from SpiceWorks left a comment that a recent survey of theirs indicated something much different, at least across the more SMB focused demographics they asked (out of 539 respondents, 46% were in companies of 10-99 employees, 23% were from companies of 100-249).

The Gartner research makes some interesting predictions:

Gartner expects that 10% of enterprise email inboxes will be hosted in the cloud by the end of 2014.…adoption will accelerate from the first half to 2015, reaching 33% penetration in 2017 and 60% by 2022.

Here's the contrast: Gartner reckons it will be close to another nine years before cloud email moves into the majority while SpiceWorks says we're on the cusp of that change. (see image below)

The only rational explanation as Coté implies comes from the demographics. As the image above shows, Spiceworks draws attention to two other classes of application: file sharing and productivity suites, both of which demonstrate solid uptake. Who are the winners on the vendor side? Again from the SpiceWorks research:

The growth of Office 365 should not surprise since Microsoft dominates the office productivity landscape regardless of business size. The bigger question is the extent to which Microsoft is able to build out its fast growing position in SMEs to embrace the larger enterprise. If Gartner is right then we're years away from seeing significant shifts. However, if last week's validation of cloud services coming from the Oracle/Salesforce.com deal acts as a leading indicator, then it might be faster than we currently realize.

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