Channelnomics

The Cloud E-mail Tipping Point Is Near

Cloud application provider Intermedia is celebrating: Today, it officially topped the half-million supported e-mail accounts mark, becoming the first Microsoft partner globally to reach this impressive milestone and capping a 40 percent customer activation growth rate.

Intermedia, though, isn’t alone in supplying cloud-based e-mail services. Microsoft has literally hundreds of hosted Exchange providers in the U.S. and around the world. Many with which Channelnomics has spoken, including AppRiver, Perimeter and Reflexion, report strong and sustained growth in account activations as more end users migrate from on-premises e-mail servers to cloud-based services. And scores of managed service providers and data service providers are also supporting or offering cloud e-mail.

Microsoft is expanding the availability of Office 365, which includes e-mail, to partners through its once-limited syndication model. The change gives Microsoft partners the ability to host and bill for cloud services previously available only through a referral model. The expansion of the syndication model means companies like Intermedia are losing their privileged exclusivity held since the debut of BPOS and the “software plus services” model in 2008.

While Microsoft practically owns the on-prem e-mail server market, it’s hardly alone in the cloud e-mail world. Day in and out, Microsoft battles Google for mind and market share in cloud e-mail. IBM wants to rekindle its e-mail business with the cloud version of Lotus. And VMware has cloud ambitions for its Zimbra platform.

Intermedia’s 500,000 hosted Exchange e-mail accounts is impressive, but it’s hard to say what the exact percentage of cloud e-mail is in terms of the total market. According to a recent Spiceworks Inc. survey, only 15 percent of SMBs have adopted cloud e-mail services. That’s probably indicative of the rest of the market, but the market is shifting rapidly as more users see the convenience, cost savings and manageability of cloud e-mail services.

What the Intermedia milestone and the continued success of other hosted e-mail providers may reflect is a tipping point when on-prem e-mail becomes obsolete and cloud-based e-mail is the dominant digital communications medium. In that regard, Intermedia and other service providers like it are leading the way into the e-mail cloud.

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