Microsoft and Google Lead Cloud Email Market: Report

Microsoft Corp.MSFT +2.85% and Alphabet Inc.GOOGL +1.64%’s Google share a comfortable lead in the enterprise cloud email market, according to a new report by Gartner Research.


But that dynamic may soon change, with the arrival last week of Amazon.com Inc.AMZN +1.92% – currently, the biggest public cloud player – into the cloud-email arena.

For chief information officers, and other corporate IT buyers, shifting company email to the cloud is typically aimed at cutting on-premise infrastructure costs, while offering greater levels of functionality and accessibility.
But data security remains a concern, CIOs say.

In an analysis of 40,000 public companies’ email server addresses, Gartner found that some 13% lead back to Microsoft or Google cloud email services. The rest used conventional on-premise email applications, or a mix of hybrid, hosted or private cloud services managed by smaller vendors, according to the report, released Tuesday.

Of the two cloud services, Microsoft accounted for 8.5% of firms, through Microsoft Office 365, while Google Apps for Work had 5%.

Microsoft tended to be more popular among bigger companies, capturing more than 80% of firms with revenue above $10 billion. Companies with revenue below $50 million were roughly split between Microsoft and Google.

More broadly, cloud email adoption ranged widely by industry, researchers found. Just over 10% of banking and financial services firms used cloud email, compared to nearly 30% of advertising and marketing firms.
Microsoft had a larger share of cloud email users among highly regulated firms, such as utilities, energy and aerospace, while Google attracted software publishing, media, consumer products and other firms in less regulated industries.

By region, companies with cloud email services based in the U.S., Canada, Europe, Latin American and the Caribbean, the Middle East and Africa favored Microsoft. Only those in Asia and the Pacific region preferred Google, according to the report.

“Microsoft and Google have achieved significant traction among enterprises of different sizes, industries and geographies,” the report said. It urged CIOs to consider both of the main vendors, without dismissing either one “because of current market adoption trends.”

Add Amazon Web Services to that list. Last week, the cloud giant released its WorkMail email and calendar service for general availability.

The service, which was unveiled in preview a year ago, includes tools that enable corporate email administrators to manage encrypted data and choose the location of the data center where a company’s mailbox is stored, according to a post on the AWS blog. It also offers tools for booking meeting rooms or signing out company equipment.

But perhaps most worrisome for Microsoft and Google: Amazon’s cloud email service comes with migration and interoperability tools, to help users shift existing mailboxes from other services.