MarketScope for E-Mail Systems
12 August 2010

Matthew W. Cain

Gartner RAS Core Research Note G00200865

The past year brought substantial progress in the long march toward provision of e-mail as a cloud service, but most activity still centers on premises-based offerings. Against this background, Gartner evaluates eight providers of e-mail systems.

What You Need to Know

This document was revised on August 17, 2010. For more information, see the Corrections page on

Because of the significant expense, complexity and IT group/user burdens involved in large-scale e-mail migrations, organizations must put considerable resources into making continuation or migration decisions about e-mail and calendaring systems. They must ensure that their e-mail and calendaring investments closely align with their long-term infrastructure commitments, such as directories, management platforms, application development strategies, databases, portals, desktop software and security models. They also need to examine current and future adjacent collaboration needs — including team workspaces, Web conferencing, social software and instant messaging (IM), given that the incumbent e-mail vendor is the leading candidate to supply these services. Finally, organizations need to start exploring the pros and cons of moving to the cloud provisioning model, and the suitability of user segmentation and hybrid deployment models.


The e-mail market saw a strong surge in innovation and competition in 2009. Google cemented its place as a legitimate competitor in the enterprise market, forcing Microsoft to halve its Exchange Online pricing and quintuple its per-user storage allocation to 25GB. Microsoft released a new version of Exchange (2010) after three years of development. IBM continued to face difficult market conditions, with defections to Exchange occurring steadily. Erstwhile Silicon Valley darling Zimbra was sold at a distressed price to VMware by Yahoo, which was jettisoning non-consumer properties to solidify its balance sheet. Novell also continued to struggle to gain momentum in the face of regular migrations from GroupWise to Exchange. Many of the other main competitors — Open-Xchange, Xandros/Scalix and Mirapoint — delayed expected upgrades in 2009 and increased their efforts to expand presence in ISP/telco markets.

On the periphery of the market Oracle took small steps with its new Beehive e-mail service. Cisco approached the official launch of its cloud-only WebEx e-mail service, based on the PostPath technology that it acquired in 2008 (an official launch is expected in 3Q10). We hope to include both vendors in the 2011 MarketScope, assuming there is sufficient uptake and client interest.

For end-user organizations, the two main issues will remain cloud e-mail and e-mail retention. Many organizations are trying to determine if a move to cloud e-mail makes sense, and if so, which vendor to choose. E-mail cloud services, however, are in their infancy, with only 2% to 3% of the market using cloud services, a figure we expect to grow to 10% by the end of 2010. Companies will continue to struggle with the issue of e-mail retention, which boils down to how much mail to keep, what kind of mail to keep, and where to keep it.

Market/Market Segment Description

This document addresses e-mail systems, the core component of which is a back-end service that provides a message store, a directory and a message transport mechanism, along with group/personal scheduling services. Although most e-mail system vendors also include a client, this is not necessary for inclusion in this document.

Inclusion and Exclusion Criteria

One vendor dominates the e-mail and calendar system market: Microsoft. Competition for the remaining market opportunity is fierce, with new vendors continually joining the fray. At present, over 25 vendors contend for this market, making it difficult to evaluate all participants.

While considering this large group of vendors, we reviewed e-mail-related inquiries from our clients and identified eight vendors they frequently asked about. All the smaller vendors should be considered attractive acquisition candidates due to e-mail's "anchor" position in a collaboration stack. Three providers — Open-Xchange, Xandros/Scalix and VMware/Zimbra — offer standards-based systems with some open-source options. Google is the only vendor with a hosted-only option, while Mirapoint is the only vendor whose offering is based on an appliance. Novell and IBM have historically been the closest competitors to Microsoft. We excluded vendors that focus exclusively on the ISP market, such as Critical Path, Openwave and Oracle (with its Sun Java System Messenger Server). Oracle's Beehive is also not included because it has yet to show sustained commitment to, and success in, the e-mail market. Cisco is not included because it has not yet officially entered the e-mail market.

Rating for Overall Market/Market Segment

Overall Market Rating: Strong Positive

E-mail/calendar systems are the most important communications channel for enterprises. Seat-count growth will slow as the market nears saturation (except in emerging markets), prompting vendors to poach customers aggressively from competitors. During the next few years, users and IT groups will struggle with an increasing number of communication modalities in addition to e-mail, such as IM, social software, Web and video conferencing, Short Message Service (SMS) and Really Simple Syndication (RSS). These communication mechanisms will augment, rather than replace, e-mail services. Companies will also increasingly examine cloud provisioning options, as opposed to premises-based deployments.

Evaluation Criteria

Table 1. Evaluation Criteria

Evaluation Criteria
Sales Strategy
The strategy for selling products that uses the appropriate network of direct and indirect sales, marketing, service and communication affiliates that extend the scope and depth of market reach, skills, expertise, technologies, services and the customer base.
Offering (Product) Strategy
The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements.
Geographic Strategy
The vendor's strategy to direct resources, skills and offerings to meet the specific needs of locations outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.
Direct, related, complementary and synergistic layouts of resources, expertise or capital for investment, consolidation, defensive or pre-emptive purposes.
Market Responsiveness and Track Record
The ability to respond, change direction, be flexible and achieve competitive success as opportunities develop, competitors act, customers' needs evolve and market dynamics change. This criterion also considers the vendor's history of responsiveness.
Marketing Execution
The clarity, quality, creativity and efficacy of programs designed to deliver the organization's message to influence the market, promote the brand and business, increase awareness of products, and establish a positive identification with the product/brand and organization in the minds of buyers. This "mind share" can be driven by a combination of publicity, promotional, thought leadership, word-of-mouth and sales activities.
Overall Viability (Business Unit, Financial, Strategy, Organization)
Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit continuing to invest in and offer the product and of advancing the state of the art within the organization's portfolio of products.

Source: Gartner (June 2010)


Figure 1. MarketScope for E-Mail Systems

Figure 1.MarketScope for E-Mail Systems

As of 24 June 2010

Source: Gartner (June 2010)

Vendor Product/Service Analysis


Google continues to make progress in the e-mail market with its Google Apps Premier Edition (GAPE). In 2009, in a long-overdue concession to enterprise sensibilities, the company removed the "beta" label from Gmail. During the past year some of the functionality added to Gmail has included:

  • Support for a native connection to the Microsoft Outlook client.

  • A more comprehensive approach to managing and securing mobile devices.

  • ActiveSync for calendar and e-mail mobile support.

  • Migration tools for Microsoft Exchange.

  • Plans for a GAPE compliant with the U.S. government's Federal Information Security Management Act (FISMA).

  • Contextual gadgets for displaying imported data in the message.

In 2010 we expect Google to add granular control of Google Labs features, support for multiple domains, more reporting and analytics, and more message-filtering services.

We estimate that Google has between 1 million and 2 million users of GAPE, which points to good growth over the year, but still gives it less than 1% of the overall enterprise e-mail market. Google had some high profile wins with Motorola's wireless division (20,000 seats) and the City of Los Angeles (30,000 seats). Overall, we estimate that there are about 15 companies with over 10,000 GAPE seats each, and that the average customer size is around 50 users. The largest companies committed to using Gmail are French auto parts manufacturer Valeo (32,000 seats), U.S. electronics manufacturer Jabil Circuit, and British business services firm Rentokil Initial (35,000 seats). In 2009, Google initiated a reseller program for GAPE, and opened an application marketplace for third-party vendors to offer GAPE-related services. We also saw the expansion of a network of third-party vendors helping organizations migrate to Google, from large general-purpose suppliers such as Capgemini and CSC to smaller, more targeted firms such as Appirio and Cloud Sherpas.

While momentum has been slow but steady (GAPE was announced in early 2007), Google has been met with a strong competitive response from Microsoft, which cut the price of its cloud Exchange service and bumped up its user storage allocation — diminishing the economic advantage Google had over Microsoft. Furthermore, Gmail lacks some common user features and lacks a deep management console. Nonetheless, we believe Google has made substantial progress in becoming a mainstream vendor, so we have raised its rating from "Promising" to "Positive."

Rating: Positive


In early 2009 IBM released Lotus Notes/Domino 8.5, which aimed to help lower operating costs with services such as the Domino Attachment and Object Store attachment-stripping service. That release had some stability issues, which were corrected with Notes/Domino 8.5.1 in 4Q09, which also added mobility and application development features. In 4Q10 we expect IBM to release Notes/Domino 8.5.2, which will have new server failover options and XPages development features, including better support for legacy LotusScript code. In 2011 we expect IBM to start delivering elements of "Project Vulcan," its vision for next-generation collaboration services, both as part of, and independently from, Notes/Domino.

IBM is offering hosted e-mail and collaboration services with the LotusLive platform, which makes Domino available in a dedicated software-as-a-service version. In 2H10 we expect Lotus to release a true multitenant version of Domino, which will enable it to compete more directly with cloud-provisioned Exchange Online and Google GAPE. The multitenant model, however, is not well suited to supporting pre-existing custom applications, so we expect the Notes/Domino cloud version to be e-mail only, thereby limiting its appeal to some Domino shops that want to operate both e-mail and applications in the cloud. IBM may add application support in a future version, however.

Business conditions in the e-mail market remain challenging for IBM as Notes/Domino customers — driven by a confluence of factors — continue to explore migration to Exchange. Those factors include a desire to standardize on a single infrastructure stack, move to a new e-mail client and invest in other vendors' adjacent collaboration services. In the 10 months ending April 2010, 116 different clients booked one or more calls with Gartner analysts to seek guidance on migrating away from Notes/Domino. During the same period, no Exchange customers asked us about a migration to Notes/Domino. As a result of these market dynamics, we are changing our rating of Notes/Domino to "Positive." The Lotus business unit as a whole, however, continues to prosper, and we expect it to remain lucrative and essential to IBM's long-term collaboration strategy.

Rating: Positive


Microsoft released the fifth version of Exchange in November 2009. Exchange 2010, which is starting to increase its market penetration, promises improvements in storage efficiencies, high availability and disaster recovery, as well as more granular administration control and user self-service options. We expect adoption to follow the normal trajectory of previous Exchange releases, peaking at 50% by the end of 2012. The real action, however, is around Microsoft's Exchange Online service, a subset of the large Business Productivity Online Standard Suite (BPOS) cloud collaboration offering. Throughout 2009 Microsoft added features to the service, and, more importantly, cut the price in half (to $5 per user per month), while quintupling the storage (to 25GB per user) — bringing it close to price and storage parity with Google GAPE. In November 2009, Microsoft said it had 1 million BPOS subscribers. We suspect that number has since doubled.

In 2H10 Microsoft will release the first service pack for Exchange 2010, with an emphasis on archiving, mobility, browser access, resiliency and management services. In 1H11 it will update Exchange Online with the 2010 version of Exchange, which is better suited to working in a multitenant environment. The current 2007 cloud release lacks some essential features, such as password synchronization, a health and performance console, multimailbox search and end-user password resetting. Furthermore, simple e-mail administration requests, such as to track a message, forward mail to an external mail box and disable ActiveSync require submission of a service request to the Exchange Online help desk, which creates operational inefficiencies for customers. Nonetheless, Microsoft continues to prosper in the e-mail market with both its on-premises and cloud options. Longer term, we will see the introduction of numerous hybrid e-mail models from Microsoft, with some mail boxes live in the cloud and others live on-premises. Google has emerged as its closest e-mail competitor, and it will remain so for the next few years.

Rating: Strong Positive


Mirapoint offers a suite of products including archiving, mail box and anti-spam/virus appliances. In early 2010 it released a new Dell-manufactured appliance, the Message Server 7000, which includes quad-core Xeon processors and a high-performance RAID controller. Mirapoint also added Apple iPhone support via a partnership with Notify. The company continued to evolve its archive appliance with new form factors and software upgrades in 2009. In 2010, it will deliver its 4.2 release of the mail box server, which includes improved search engine functionality, conversation threading, single mail box restore, and a new Dojo-based Web 2.0 interface with drag-and-drop, right clicking and widget support.

The company continues to target international and emerging markets. Mirapoint reports that it was profitable in 2009, when it added 200 new customers to its e-mail business, bringing the customer count to about 2,400 organizations and total e-mail seats to about 120 million. Mirapoint secured major deals with companies including Jaguar Land Rover, ITC Deltacom and Primerica Financial Services, which rolled out 200,000 e-mail and calendar seats to its field representatives.

Although the move to cloud delivery of e-mail could buoy Mirapoint's core business of selling to hosters, it could present a challenge to its enterprise business, as cost-sensitive customers are increasingly looking to Google, Microsoft and other vendors for these services. In addition, in the education sector, U.S. K-20 organizations are increasingly adopting no-fee e-mail services from Google and Microsoft, making for a difficult competitive environment for premises-based vendors.

Rating: Positive


In 2009, the GroupWise team focused on releasing version 8.01, which was primarily a fix release for 8.0. In 2010 we expect Novell to replace its GroupWise Mobile Server with ActiveSync for mobile devices via the Novell Data Synchronizer Mobility Pack. This product will synchronize GroupWise e-mail, calendar data and contacts with all ActiveSync-enabled devices. Other Synchronizer plans include SharePoint, SugarCRM and integration. Also expected in 2010 is Service Pack 2 for GroupWise 8.x, which will add more integration with Teaming + Conferencing, and the next major version of GroupWise, which will upgrade calendar, contact and administration services.

The real future of Novell's collaboration strategy is Pulse. This is a rich fourth-generation collaboration platform built on a microblogging service, with embedded security and management capabilities. Novell Pulse takes the core concept of microblogging and makes it the centerpiece of a broader collaboration platform. It seeks to appeal to organizations that are drawn to the functionality of the recently discontinued Google Wave and want additional security and management services. Pulse is clearly innovative, but it is independent of GroupWise.

The GroupWise base is being slowly eroded by Microsoft Exchange. Many organizations combine a migration from Novell directory services with a migration away from GroupWise. GroupWise users, however, are generally pleased with the e-mail system — Novell has done a good job with new releases, despite having a limited number of development personnel — but customers are primarily concerned about Novell's staying power in the market and the lack of third-party support. GroupWise, however, is a profitable business for Novell, and there is no suggestion that the company will drop the product. Given the limited development, we expect the functionality gap with Exchange to grow during the next few years. Plans for moving GroupWise into the fastest-growing sector of the e-mail market — the cloud — are progressing, but details remain unclear.

Rating: Positive


Open-Xchange is available as a General Public License version 2 (GPL 2)/Creative Commons open-source, commercially supported product. The company offers an e-mail server bundle (v.6), which includes installation tools, a Web-based administration console, technical documentation, Outlook, Mac and Thunderbird connectors, upgrades and patches. In 2009 Open-Xchange released a service pack for version 6 that included support for ActiveSync and publish and subscribe, along with public mail box aggregation capabilities and the ability to exploit social network contacts and deep links to SugarCRM. In 2010, Open-Xchange made available voice, fax and IM via a partnership with 4PSA, and it is expected to partner with SugarCRM.

Open-Xchange is a small vendor with 50 employees and revenue of under $4 million in 2009. It has 4,000 customers, representing 15 million paid seats, of which 2 million are educational and governmental premises-based seats in Europe, 6 million come from domain hoster 1&1, and over 1 million come from domain hoster Network Solutions. In 2009 the company added German telecom vendor Versatel (with 1.3 million seats) and domain registrars Dotster and NameCheap. So far in 2010 it has inked deals with Bull Germany, Dinahosting and Softline.

The company has de-emphasized premises-based deployments in favor of its cloud platform, targeting ISPs, telcos, mobile carriers and domain hosters. It struck a deal with Parallels in 2009, which resells Open-Xchange as part of its cloud platform for service providers. Open-Xchange's cloud value proposition is to provide revenue upgrade opportunities to hosters, which can give away the base platform (for which Open-Xchange gets about $0.50 per user per year), but to charge for incremental services such as mobility, the Outlook connector and collaboration services. With its strong push into the ultra-competitive service provider channel, Open-Xchange is less of an option for premises-based deployments, although large companies looking to cut e-mail costs by utilizing an ISP-type approach to service delivery might consider Open-Xchange.

Rating: Caution


In a deal announced in January 2010 — and since completed — Yahoo sold Zimbra to VMware for what was widely reported to be about $100 million, a substantial drop in valuation from the $350 million Yahoo paid for Zimbra in late 2007. As predicted in 2009's MarketScope, with the renewed consumer focus enacted by new Yahoo CEO Carol Bartz, it was quite likely that Yahoo would offload Zimbra. The motivation on the part of VMware was also clear: the company wants to move up the stack, from the operating system (where it faces severe competition from Microsoft and others) to a custom application platform (as evidenced by the purchase of SpringSource) to packaged applications — which is where Zimbra comes in.

Zimbra will have a great deal of autonomy in filling out a collaboration stack for VMware as the vendor looks to offer turnkey public and private cloud services to service providers and enterprises. We expect the Zimbra team to partner for, acquire or build microblogging, virtual work space and voice services, the last of these likely to come from Cisco, which is a close partner of EMC and VMware in cloud service development. Zimbra is also likely to exploit the EMC ecosystem, linking to Documentum for content management and turning to RSA for multifactor authentication.

We believe Zimbra will eschew substantial platform development in 2010 (7.0 is not expected until 2011) to focus on integration with core VMware services. In August 2010, the company released a version of Zimbra integrated with vSphere, with tight links to its high-availability, disaster recovery and backup services. This Zimbra/VMware soft appliance is targeted at Windows-centric companies with fewer than 1,000 seats and at hosters that want to offer dedicated cloud e-mail services to small companies. Later in 2010 we expect a software bundle of vSphere, SpringSource and Zimbra targeted at service providers and enterprises, as well as a richer Zimbra/vSphere bundle with support for the Microsoft Outlook client, BlackBerrys and multiple instances.

Founded in 2003, Zimbra claims to have 150,000 customers and 56 million paid seats, with the bulk of its seats coming from high-volume portal and ISP deals. Of the 56 million seats, 5 million are in the education sector and 40 million in the consumer market (Zimbra secured NTT and Vodafone as customers in 2009). The remaining 11 million are in the commercial sector, with about 7 million using a hosted model (Homestead and Brinkster are the largest partners), and 4 million using the premises-based platform. The commercial business ranges from small and midsize businesses (SMBs) up to large enterprises. Zimbra had some success with large enterprises in 2009, securing Bechtel (30,000 seats) and Arbonne (20,000 seats) as customers. About half of Zimbra's business is in the U.S., 30% in Europe and 20% in Asia/Pacific.

Rating: Positive


In 2009, Xandros released three maintenance updates, culminating in 11.4.6. The upcoming Linux-based Scalix 11.5 (originally expected in 2H09, but now due in 2H10) will add broader support for multiserver, multitenant delivery and extend tenant self-service administration capabilities, along with granular ActiveSync management controls. Those features are critical for expanding the Scalix business into the hosting market. As part of that effort, integration with the Parallels Automation platform is also under way: Xandros is waiting for Parallels Office Automation 2.0 (expected mid-year) for full integration.

Although Xandros has licensed Microsoft's Outlook Exchange Protocol (OEP), a remote procedure call instantiation of the Microsoft Messaging API protocol, it has chosen not to deploy it because its own Outlook connector is meeting customer demand for native Outlook support. It has developed its own caching and Secure Sockets Layer support for Outlook, which, along with group calendaring and free/busy indicators, public folders, shared contacts, tasks and notes, brings it close in functionality to a native Outlook-Exchange connection. In 2010, Xandros will also focus on client-side integration with social network services.

The number of Scalix customers hit 2,000 in 2009, representing about 1.2 million paid seats, with over a dozen implementations having over 5,000 users, including the Massachusetts State Trial Court and Radisson Hotels in Europe. In 2010, Xandros will expand its push into the SMB market with a partnership with Synnex, a North American Red Hat distributor. Xandros faces a very competitive environment as it pushes into the hosting market, and rising competition in the SMB market as more low-price cloud e-mail offers hit the mainstream from megavendors such as IBM, Cisco, Google and Microsoft.

Rating: Promising

© 2010 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor's appearance in a Magic Quadrant or MarketScope one year but not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or of a change of focus by the vendor.

Gartner MarketScope Defined

Gartner's MarketScope provides specific guidance for users who are deploying, or have deployed, products or services. A Gartner MarketScope rating does not imply that the vendor meets all, few or none of the evaluation criteria. The Gartner MarketScope evaluation is based on a weighted evaluation of a vendor's products in comparison with the evaluation criteria. Consider Gartner's criteria as they apply to your specific requirements. Contact Gartner to discuss how this evaluation may affect your specific needs.

The various ratings are defined below:

MarketScope Rating Framework

Strong Positive
Is viewed as a provider of strategic products, services or solutions:

  • Customers: Continue with planned investments.

  • Potential customers: Consider this vendor a strong choice for strategic investments.

Demonstrates strength in specific areas, but execution in one or more areas may still be developing or inconsistent with other areas of performance:

  • Customers: Continue planned investments.

  • Potential customers: Consider this vendor a viable choice for strategic or tactical investments, while planning for known limitations.

Shows potential in specific areas; however, execution is inconsistent:

  • Customers: Consider the short- and long-term impact of possible changes in status.

  • Potential customers: Plan for and be aware of issues and opportunities related to the evolution and maturity of this vendor.

Faces challenges in one or more areas.

  • Customers: Understand challenges in relevant areas, and develop contingency plans based on risk tolerance and possible business impact.

  • Potential customers: Account for the vendor's challenges as part of due diligence.

Strong Negative
Has difficulty responding to problems in multiple areas.

  • Customers: Execute risk mitigation plans and contingency options.

  • Potential customers: Consider this vendor only for tactical investment with short-term, rapid payback.