Here’s a news flash: Microsoft, the company that dominated big corporate email systems in the pre-cloud era, has a healthy start in the cloud epoch, at least among big companies.
New Gartner (IT) research holds that among big companies surveyed, Microsoft (MSFT) Office 365 holds 8.5% market share compared to 4.7% for Google (GOOG) Apps for Work, which has strong traction among startups and smaller companies.
But perhaps more interesting is that the bulk of big companies haven’t made the cloud move at all. Nearly 90% of the companies surveyed worldwide, still use on-premises email or some other, presumably legacy option. Many use email hosted and run by another company. When Gartner last tracked the on-premises email market back in 2012, before cloud options hit big, Microsoft Exchange Server led the category with more than 80% market share.
To get the new cloud numbers Gartner researchers looked at the public mail routing information—the email server addresses listed in company’s domain records—of some 40,000 public companies worldwide.
Phew.
While the overall share numbers may not overwhelm anyone, the progress Microsoft and Google have made in the market is worth noting, Gartner analyst Nikos Drakos told Coins2Day.
Generally speaking, the perception that Microsoft does better in big companies while Google does well in smaller concerns held up. Microsoft Office 365 was used by more than 80% of companies that use cloud email and that have more than $10 billion in annual revenue. Google, on the other hand, was used by 50% of the companies using cloud email that have less than $50 million in revenue.
Microsoft also did better in companies that focus in regulated industries—like utilities, energy, and aerospace companies. But Google does very well in software companies, retail establishments, advertising, media, consumer products, and travel industries, according to the numbers.
In the old model, big businesses paid up front for an enterprise license for the email server software, which typically ran on company-owned hardware and was upgraded every three years or so.
Read Coins2Day’s Q&A with Microsoft CEO Satya Nadella.
That is shifting to a “Software as a Service” world in which customers pay a fee for each user per month, although they still typically pay at least for a full year up-front. And now, the software runs in Microsoft or Google data centers, and those companies handle all the hardware, software, and networking upgrades so the customer doesn’t have to sweat them.
There are lots of caveats here. First, the fact that the providers are running the email doesn’t mean perfect performance. As some recent embarrassing outages from both vendors attest.
Second, the move to cloud adoption—whether that means software-as-a-service options like Office 365, or to public cloud infrastructure like Amazon Web Services, is still very much in its very early days. A lot can happen.
For more on Google, watch:
And, it’s worth noting that Amazon (AMZN), which is the biggest provider of public cloud infrastructure, just made its own business email WorkMail product generally available last month. It’s far to early to gauge any uptake yet, but it bears watching.
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More broadly, email is a technology that’s had its epitaph written many times over the past decade. People were (and are) overwhelmed with spam and phishing attacks. Other technologies like SMS and text messaging were going to kill it; then curated messaging products like SocialCast, Slack, or Jive were going to give it the heave-ho.
But for all that negative commentary, most normal humans still need to get and send email. Email, despite all the reports of its imminent demise, remains a mission-critical application, Drakos told Coins2Day.
