Cloud email poised to surpass on-premises installations among SMBs

If current trends continue, by the end of the year, more small companies will be using hosted email services than those installing solutions in their office — and Microsoft 365 is gaining on the Google solution.

If current adoption patterns continue, by the end of the year, the number of small and midsized businesses (SMBs) using cloud-hosted options for email could overtake the percentage of those relying on an on-premises solution, ongoing research conducted by IT professional community Spiceworks has found.

Hosted email deployments grew by 4 percent over the past year, to 46 percent from 42 percent, according to data published in the organization's June 2013 "Voice of IT" report (PDF). At the same time, the number of on-premises installations shrank by 3 percent, to 49 percent from 52 percent.

The survey included more than 500 global SMB respondents, with the majority (46 percent) representing companies with 10 to 99 employees; 11 percent came from smaller companies (one to nine employees), and 23 percent came from the next size bigger (100 to 249 employees). The research process was sponsored by LogMeIn.

Among the primary considerations motivating this shift (as cited by survey respondents) are these five things:

  • Reducing burden on IT staff (67 percent)

  • Accessibility to email anytime (61 percent)

  • Built-in backup and archiving (59 percent)

  • Cost savings (52 percent)

  • Ease of deployment (49 percent).

Security concerns continue to be the main factor keeping holdouts from making the switch, according to the data. The research also shows that the battle is heating up between Google and Microsoft. Approximately 30 percent of the cloud email users have opted for Microsoft 365, compared with just 16 percent in 2012. Google still has a slightly larger following (32 percent), but that's down from 34 percent last year. The two other top service providers in this category are GoDaddy and Rackspace.

The biggest jump in cloud service adoption came for productivity suites, which further explains the email adoption trend. (That's a big shift in mindset compared with last year's survey .) Approximately 35 percent of the respondents are currently using cloud versions, with the majority using Google Apps compared with Microsoft Office 365.

That could change, however, as more SMBs create cloud usage policies and sanction specific applications. It turns out that Office 365 does far better among small companies that have formal policies regarding this. The dark horse in this category is Zoho, which also offers a series of cloud-hosted applications including CRM and other productivity tools. Ease of interface is the primary consideration for this category.

Here are some other survey highlights:

  • Almost 50 percent of the survey respondents indicated that their employees were using a file-sharing service such as Dropbox, Google Drive, Box, YouSendIt, or Microsoft SkyDrive. About one third (31 percent) of respondents discourage people from using them, but only 4 percent block these services on the office network.

  • When it comes to collaboration, the top choice is Microsoft SharePoint. But a much newer company, Evernote, is close behind as an approved solution — and it has a far higher rate of viral adoption among employees who are using cloud collaboration services without the explicit approval of their IT team.