Will Businesses Exchange Microsoft Exchange for Gmail?

Right now, Microsoft (NAS: MSFT) Exchange owns the enterprise email market. But according to a report by Gartner, Google's (NAS: GOOG) popular Gmail service has a good shot at making a dent.

Gmail has long been popular among consumers, but breaking into business class would be huge victory for the search giant. Like most all of Google's big pushes, Gmail's strength lies in the cloud. The report cites that while Gmail's overall enterprise email market share is around a measly 1%, it has almost half of the market for cloud-based enterprise email, which is still in its early days.

Currently, cloud enterprise email accounts for only between 3% and 4% of the overall enterprise email market, but Gartner projects significant growth in that segment, potentially rising to 20% by the end of 2016 and 55% by the end of 2020.

One shall stand, one shall fall
Others have tried to crack the enterprise market with little success. Novell, which was acquired by Attachmate, offers Groupwise, while IBM's (NYS: IBM) Lotus Notes has been losing traction and Cisco (NAS: CSCO) shut down its cloud email attempts. Can Big G stand up to the challenge?

In recent years, Gmail has been the only cloud offering that has thrived beyond Microsoft Exchange and continues to gain momentum in the enterprise space. One challenge the company faces is being able to provide features that are unique to the enterprise market, such as surveillance capabilities used by financial institutions. Some larger organizations think Google is hesitant to focus on features that appeal to only a limited segment and instead gives its attention to front-end capabilities that cater to larger audiences.

You got the touch
Google is probably the only provider that has what it takes to present a potential threat to Mr. Softy's grip on the business email market. Google needs to address some of the back-end functionality requests from companies if it hopes to win them over. I've been a user of both Exchange and Gmail for years, and Gmail takes the cake in my mind. Business users with unique requirements are a far harder sell than are consumers with low switching costs on e-mail, but Google's offering includes some very compelling features beyond the attractive aesthetics -- Gmail is far more than meets the eye.

What do you think? Can Gmail take on Exchange? What '80s movie am I referencing? Share your thoughts in the comments box below.

At the time thisarticle was published Fool contributorEvan Niuholds no position in any company mentioned. Check out hisholdingsand a short bio. The Motley Fool owns shares of Google, IBM, Cisco, and Microsoft and has created a bull call spread position on Cisco.Motley Fool newsletter serviceshave recommended buying shares of Microsoft, Google, and Cisco and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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