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Google’s (NASDAQ:GOOG) Gmail application commands only 1 percent market email market share in the enterprise, but that’s enough for Gartner to proclaim the application has become a credible competitor to Microsoft (NASDAQ:MSFT) Exchange Online and other Web-based email services, proclaimed Gartner.
Gmail is the search-engine provider’s cloud-computing messaging software, which became a household application in July 2009 after five years in beta.
Though well behind the hundreds of millions of users Yahoo Mail and Microsoft Hotmail enjoy, Gmail has a hardy, loyal user base. Google doesn’t reveal how many Gmail users it has, though experts estimate somewhere between 150 million to 200 million users access the application for personal and/or professional communications.
However, it might be easier to pinpoint how many people use Gmail for business. Google Executive Chairman Eric Schmidt revealed Sept. 1 that Google Apps has 40 million users, with 5,000 joining per day. Gmail is the flagship messaging application for Google Apps.
Google hasn’t revealed how many of those 40 million users pay Google $50 per user, per year for the Google Apps for Business edition, though the company claims hundreds of thousands of users are paid customers.
Still, Gartner said the enterprise version of Gmail is gaining traction in commercial organizations with more than 5,000 seats and now has nearly half the market for cloud email in that market sector. Gartner analyst Matthew Cain predicts big growth for the cloud email niche.
“While cloud email is still in its infancy, at 3 percent to 4 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 hasn’t been as accommodating as it could be when it comes to Gmail.
The company apparently focuses on 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 organizations execute one more on-premises upgrade through 2014, or even employ a hybrid system of cloud and on-premise in-boxes.
That’s an approach Microsoft currently promotes as it begins to more aggressively ramp up its Office 365 cloud suite, 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 next month.