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Report: Gartner Says Move to Cloud-based Email Slowing

• By Dian Schaffhauser
• 09/29/11

Gartner is pulling back on its projections for how quickly organizations will adopt cloud-based email and collaboration services (CECS). The IT analyst firm said most enterprises won't begin their move to the cloud for these operations until 2014. By then penetration will stand at 10 percent. Originally, the company had predicted that the 10 percent mark would hit by the end of 2012. Then at that point growth is expected to take off, only leveling by 2020, at which point more than 55 percent of organizations will have shifted.

"Ultimately, we expect CECS to become the dominant provisioning model for the next generation of communication and collaboration technologies used in enterprises," said Tom Austin, vice president and Gartner fellow. "However, it is not dominant today; it will not be the only model; and it will take a decade or more for the transition to play out."

Austin said that the list of reasons to move to CECS is as long as the list of reasons to avoid it. He noted that organizations are moving more slowly than expected for three primary reasons:

• Inertia: Enterprises have sunk a lot of investment into their email systems and switching too early is like "trading in a 2-year-old, low-mileage automobile."
• Lack of strategic value: Right now IT managers are more focused on transforming and growing the business than on saving costs.
• Disappointment with vendor offerings: "The practical realities of the vendors' CECS offerings, when examined up close, are sometimes less compelling than the glossy stories they tell."

Austin also noted that frequently operations that appear from a distance to have gone whole-hog with cloud-based email actually still retain small, dedicated, on-premises systems specifically to manage the content generated by senior leaders for purposes of legal and regulatory compliance.

In spite of corporate reticence to move at least some of their users to CECS, Gartner did state that the time is right for some segments with "underserved populations" to adopt it. Although the company didn't reference the education segment specifically, it advised those organizations seeking cost reduction for email and collaboration applications to move now rather than later.

"Cloud-based collaboration services appear to be forward priced," Austin said. Gartner believes customers that implement the service earlier will be able to take advantage of the reduced pricing now being offered by vendors to drum up business, as long as those suppliers also commit to continue reducing pricing as it falls in general.

Gartner has issued a research report on the topic for subscribers, "The Cloud Email and Collaboration Services Market, 2011 Update," at gartner.com. Analysts will also be making presentations on cloud-based email at the Gartner Symposium/ITxpo 2011 in mid-October.