Press Release

STAMFORD, Conn., July 2, 2008 View All Press Releases

Gartner Says E-Mail Will Lead the Charge Into Mainstream Adoption of Cloud Computing

Percentage of Commercial Mailboxes Using a Cloud-Provisioned Model to Grow from 1 Percent of Enterprise Seats in 2007 to 20 Percent in 2012

Driven by falling prices and new vendors, the percentage of commercial mailboxes using a cloud-provisioned model will grow from 1 percent of enterprise seats in 2007 to 20 percent in 2012, according to Gartner Inc. The push into the cloud e-mail market by large suppliers will cause fundamental restructuring of the e-mail market, analysts predicted.

"Events during the past year have created the conditions for the rapid growth of the cloud delivery model for enterprise e-mail, with companies such as Google, Yahoo, Dell and Microsoft all making major investments in cloud computing," said Matthew Cain, research vice president at Gartner.

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

Mr. Cain said that until recently, the cloud computing market has largely been the domain of small suppliers, but it has been rapidly transformed into a market where the largest IT companies are aggressively competing. He said that vendors such as Google, Microsoft and Yahoo have consumer mail platforms that serve millions of users and that the opportunity and the challenge is to transfer the economies of consumer mail to enterprises.

Gartner believes the biggest expenses for the providers of cloud-provisioned consumer mail are currently electricity and storage and that the biggest cost for enterprise e-mail operations during the next 10 years will be level-one help desk support as reduced licensing and operational costs improve enterprise cloud-based e-mail economics.

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

"As large suppliers push into the cloud e-mail market we'll see a fundamental restructuring of the e-mail market," said Mr. Cain. "Traditional e-mail software-as-a-service (SaaS) 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-customized e-mail."

From an end-user point of view, Mr. Cain said that companies with fewer than 1,000 seats typically have had the highest costs associated with e-mail and would stand to gain significantly from the cloud approach. He also advised companies undergoing major e-mail transitions to examine the cloud model to deliver better e-mail economics. Finally he said organizations with complex topologies characterized by geographic diversity and those with less than 99 percent uptime should consider the cloud model to simplify support and improve uptime.

Additional information is available in the Gartner report "E-Mail and the Cloud." The report is available on Gartner's Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=688123&subref=simplesearch. This document is part of the special report on cloud computing. A full listing of the reports is available on Gartner's Web site at http://www.gartner.com/it/products/research/cloud_computing/cloud_computing.jsp

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