“The way I first perceived email was, it was something my parents did for work.” These words are from a 21 year old senior interviewed by the Wall Street Journal for an article on the perception of email amongst younger generations.
Our first reaction when we started reading was that it was going to be yet another article forecasting email’s imminent demise. But in reality, it’s clear that insights like these actually help us understand that there still is a future for email as a communication tool.
Nowadays, with 2.6 billion email users worldwide and three out of four of those users on consumer accounts, email is more alive than ever. Even more reassuring is the other one out of four users who rely on email as a business tool.
So while our younger peers generally do not use email for personal communication, email is actually even more synonymous with business (and adulthood) for them than for older generations.
This means that the business email market will remain one of the strongest segments in the industry and one of the most promising for growth as well. With that said, how has the market is changed in the last few years and who are now the big players in it?
The Cloud revolution
The evolution of the cloud computing has indeed been revolutionary for just about every sector of industry, forcing many complete market redefinitions. Hundreds of thousands of companies have realized the benefits of cloud email and have replaced their on-premises solutions with new cloud email services.
Data provided by the Radicati Group’s independent analysis shows that over the next four years, the number of in-house email hosting will sharply decline in favor of cloud email solutions.
By the end of 2019, on-premises mailboxes are expected to account for only 36% of business email accounts worldwide (449 million users), while cloud business mailboxes will account for the majority 64% of accounts(815 million users).
To refer to Radicati’s analysis again, here are five key elements of why companies have chosen to replace their on-premises email services with cloud solutions:
- The gap in functionality between on-premises email and cloud email solutions has disappeared. Most cloud solutions now come with additional features beyond what can offered with on-premises solutions, see below.
- Many larger organizations that are often geographically dispersed find that cloud email services allow them to more easily unify users under one infrastructure, removing the costs associated with staffing an IT department at each of their organization’s locations.
- Cloud business email providers are leaders in other sectors of technology and are capable of offering much more advanced security for their email services.
- Packaged along with the core services are full featured cloud productivity suites that offer a wide range of business collaboration services beyond email.
- One big advantage of cloud email solutions is their adaption to mobile devices.
Email, a consumer service and a business necessity
The numbers and analysis above show that the business email market is one of the most promising, which helps explain why the major tech companies have been focusing their efforts in the field for the last few years.
The market has created a new revenue stream for the big players, because beyond considering email as a consumer service, it is also a business necessity that has become the biggest selling point for cloud services.
“Gmail for Work is why people come,” declared Amit Singh, Google for Work president.
Thanks to their email services, companies can upsell productivity suites and collaboration software to their customers. In addition, these companies open up their platform and foster entire ecosystems of third-party applications that solve countless other problems. Ultimately, this strategy allows companies like Google or Microsoft to become key providers of business software and their services have become engrained in the workflows of countless other companies.
Google vs Microsoft, the new battle
The cloud business email market is distributed amongst dozens of players, but two excel over all others: Google and Microsoft. The combination of both account for 54% of the worldwide market – Google with 28.7% of the market, and Microsoft with 25.3% in 2015 -.
How is this war evolving and are there any other players who are taking on Google and Microsoft? In future articles, we will analyze this environment in further depth. We plan to also look into how the market is receiving new innovations that are changing email as a communication channel.