Should you host your own email?

A recent study suggests that one in ten businesses will outsource their email to the cloud by 2014 and more than half by the end of the decade.

Research by Gartner says that "by the end of 2014, penetration of cloud email and collaboration services (CECS) will stand at 10 percent". That's a large number of businesses that will have some of their most critical data held outside the enterprise.

Many smaller businesses use managed service providers to remotely administer their systems. One low cost tool that many have used is cloud-based email services. The phenomenon isn't limited to small business though with larger organisations such as Monash University shifting from an internally hosted solution to Google Apps.

Although Gartner believes that the time is right for some enterprises — particularly smaller ones and those in industries with long underserved populations such as retail, hospitality and manufacturing — to move at least some users to CECS during the next two years, analysts warned that readiness varies by service provider and urged caution. "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. Right now, the list of reasons to move to CECS is long, as is the list of reasons to avoid it."

Because of the perceived issues facing a move to cloud-based communications, Gartner expects the shift towards CECS to be slower than they initially anticipated with 10% market penetration to be reached in 2014 rather than 2012. However, by the end of the decade, they expect CECS penetration to exceed 55 percent.

Amongst the issues Gartner sees is reticence to abandon existing infrastructure. Organizations seek to extract maximum value from their investments in email and switching early can be like trading in a 2-year-old, low-mileage automobile.

Also, CIOs are focused on strategic initiatives that help them to grow or transform the enterprise. Moving to cloud-based or SaaS email services is generally viewed as a cost-saving move rather than a strategic initiative.

"Finally, the practical realities of the vendors' CECS offerings, when examined up close, are sometimes less compelling than the glossy stories they tell," Mr. Austin said.

Although it seems that a shift to cloud-based systems is inevitable, it's interesting to note that Gartner's research shows that many businesses retain some internal email services. Also, there's a perception that early adopters don't reap the full benefits as newer technologies are fully bedded in and service commoditisation delivers cheaper pricing. "There are several reasons why enterprises might not want to be ahead of the curve on CECS, not least the perception that early adopters pay a premium in terms of acquisition cost, and that by waiting the organization can avoid paying an 'early adopter premium,'" said Mr. Austin.

"However, cloud-based collaboration services appear to be forward priced and, while we do expect the cost of CECS to follow a cost-learning curve, the motive for much of the investment in CECS appears to be cost reduction. Thus, if CECS otherwise makes sense for an enterprise, it would be far better off proceeding now, while requi

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