The SMB (small and midsize business) segment is the biggest adopter of hosted services in India, accounting for 55 percent of total market revenue.
According to a study released last week by Ascentius, entitled "Evolving market for e-mail and collaboration platform in India", their small company size, limited IT resources, and preference for pay-per-use model are key drivers for adoption in this market space.
Taking 2012 as the base year for the study, the research throws up some interesting insights. It evaluated three market segments: large enterprises with fewer than 1,000 employees, mid-market organizations with between 25 and 1,000 employees, and SMBs with fewer than 25 employees.
According to Ascentius, total revenue across on-premise, hosted, and cloud-based e-mail and collaboration platforms and services was estimated to be US$77.8 million in 2012 and expected to hit US$111 million by 2015, clocking 12.6 percent in CAGR (compound annual growth rate) over the forecast period.
However, the composition of platform by revenues is expected to experience tectonic shifts. Revenue from hosted e-mail and collaboration services grew to US$5 million in 2012, and is expected to grow to US$8.85 million by 2015 with a CAGR of 21 percent. In comparison, public cloud e-mail services achieved revenues totaling US$10 million last year and is expected to grow at 27 percent CAGR to US$20.5 million in 2015.
The Ascentius study noted SMBs accounted for 45 percent of revenue for public cloud e-mail and collaboration services, suggesting this segment is likely to grow at the expense of hosted e-mail services rather than the on-premise e-mail.
Microsoft Office 365 acquired 70 percent share of the public cloud e-mail and collaboration services market. Google Apps grabbed 29 percent, while Yahoo Business E-mail and Rediff Pro accounted for the remaining 1 percent.
"Businesses of all sizes are choosing Microsoft Exchange over Google Apps [because of] enterprise-class security, reliability, anywhere access, data privacy, and a familiar user experience," Tarun Malik, Microsoft's director of product marketing and strategy, said in the report.
According to the Ascentius study, Microsoft leads both on-premise and public cloud e-mail markets with Exchange Server grabbing 78 percent share and Office 365 clocking a 70 percent share, respectively.
Interestingly, while the goal of Google Apps is to carve a niche in the large enterprise space, it is finding greatest traction among mid-market enterprises and SMBs.