Gmail Hailed As Credible Rival For Microsoft Exchange

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Google’s Gmail commands half of cloud-based email, vying for market share with Microsoft and others

Google’s Gmail application commands only one percent of the email market share in enterprises, but that is enough for analyst Gartner to proclaim the application has become a credible competitor for Microsoft Exchange Online and other Web-based email services.

Though well behind the hundreds of millions of users Yahoo Mail and Microsoft Hotmail enjoy in the consumer world, Gmail has a hardy, loyal user base and a plan to colonise the enterprise.

Google does not reveal how many Gmail users it has, though experts estimate that somewhere between 150 million to 200 million users access the application for personal or professional communications. Gmail became a household application in July 2009 after five years in beta.

Flagship For Google Apps

It might be easier to pinpoint how many people use Gmail for business. On 1 September, Google executive chairman Eric Schmidt revealed that Google Apps has 40 million users, with 5,000 joining per day.

Gmail is the flagship messaging app for Google’s business offering, Google Apps, but the company has not revealed how many of those 40 million users pay Google $50 (£32) per user, per year for the Google Apps for Business edition, though the company claims  hundreds of thousands of users are paid customers.

Gartner said the enterprise version of Gmail is gaining traction in commercial organisations with more than 5,000 seats and now has nearly half of the market for cloud email in that market sector. A Gartner analyst, Matthew Cain, has predicted big growth for the cloud email niche.

“While cloud email is still in its infancy, at three percent to four percent of the overall enterprise email market, we expect it to be a growth industry, reaching 20 percent of the market by year-end 2016, and 55 percent by year-end 2020,” Cain said.

He added that, after the dominant Microsoft Exchange, Gmail is the only email system that has prospered in the enterprise space since its inception there in 2007. Google and Microsoft have squeezed Novell GroupWise and IBM Lotus Notes/Domino, which have both lost market momentum, and others.

Interestingly, Cain’s research revealed that Google has not been as accommodating as it could be when it comes to Gmail. The company apparently focuses on end-user feature functionality for the broader consumer market and largely ignores requests from financial services firms and others for features that satisfy their requirements on the back end.

“Banks, for example, may require surveillance capabilities that Google is unlikely to build into Gmail given the limited appeal,” Cain noted, adding that large system integrators and enterprises said Google’s lack of transparency in areas such as continuity, security and compliance can thwart deeper relationships.

While cloud email such as Gmail and Exchange Online are here to stay, Cain recommends that most organisations execute one more on-premises upgrade through 2014, or even employ a hybrid system of cloud and on-premises inboxes.

That is an approach Microsoft currently promotes as it begins to ramp up its Office 365 cloud suite more aggressively, which includes Exchange Online, SharePoint collaboration and other services.

Gartner will outline the battle between Google and Microsoft in the enterprise email market at the Gartner Symposium/ITxpo in Nice, France, 7 to 10 November.

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