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Upside Growth for Public Cloud-Based Email Services

Software as a Service (SaaS) applications continue to lead the ongoing enterprise migration to cloud-based service offerings. Given the recent trends, corporate email is a SaaS application that's likely to experience significant new growth during 2016.

The cloud email market is still in the early stages of adoption with 13 percent of identified publicly listed companies globally using one of the two main cloud email vendors, according to the latest worldwide market study by Gartner.

Gartner found that 8.5 percent of public companies use cloud email from Microsoft's Office 365 service, while 4.7 percent use Google Apps for Work. The remaining 87 percent of companies surveyed have on-premises, hybrid, hosted or private cloud email managed by smaller vendors.

These findings are based on an automated examination of a large number of publicly available email routing records. Gartner used the email server addresses in the domain records of nearly 40,000 public companies globally, to find out which ones point to cloud email services from Google or Microsoft.

Rapid Adoption of Cloud Email Solutions

"Although it is still early days for cloud email adoption, both Microsoft and Google have achieved significant traction among enterprises of different sizes, industries and geographies," said Nikos Drakos, research vice president at Gartner.

Companies considering cloud email should question assumptions that public cloud email is not appropriate in their region, size or industry. Gartner believes their findings suggest that many varied organizations are already using cloud email, and the number is growing rapidly.

Among organizations using cloud email from Google and Microsoft, Microsoft is ahead in most industries, particularly in regulated industries including utilities, energy and aerospace. Google is ahead in industry segments with more competition and less regulation, such as software publishing, retail, advertising, media, education, consumer products, food and beverage, and travel.

"Among public companies using cloud-based email, Microsoft is more popular with larger organizations and has more than an 80 percent share of companies using cloud email with revenue above $10 billion," said Jeffrey Mann, research vice president at Gartner. "Google's popularity is better among smaller companies, approaching a 50 percent share of companies with revenue less than $50 million."

In some industries — such as travel and hospitality, professional services and consumer products — the highest usage levels are among the companies with the biggest revenue. More than a third of companies in these industries with revenue above $10 billion use cloud email from one of these two vendors.

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