Google's Gmail has less than 1% of enterprise e-mail market, Gartner says

Gartner: Gmail nears 2 million business users, but Microsoft still dominates

Despite a few high-profile deployments, most Google Apps customers have only around 50 users and represent a tiny portion of the market.

Google's Gmail has captured less than 1% of the enterprise e-mail market, according to Gartner. Despite a few high-profile deployments, most Google Apps customers have only around 50 users, making the overall number of business users relatively small, the analyst firm says.

Google Apps vs. Microsoft Office

"We estimate that Google has between 1 million and 2 million users of GAPE [Google Apps Premier Edition], which points to good growth over the year, but still gives it less than 1% of the overall enterprise e-mail market," Gartner said in its latest MarketScope report on e-mail systems. "Google had some high profile wins with Motorola's wireless division (20,000 seats) and the City of Los Angeles (30,000 seats). Overall, we estimate that there are about 15 companies with over 10,000 GAPE seats each, and that the average customer size is around 50 users."

Those 50-user companies don't count toward Gartner's estimate, which tracks enterprises worldwide, with 100 seats or more.

Gartner's estimate, published on Aug. 12 of this year, is quite different than Google's public pronouncements about the size of its user base. Google says "more than three million businesses run Google Apps."

Google recently updated that number -- back in April, it was claiming 2 million businesses run Google Apps. 

Google's estimate of 3 million businesses could include many that do not use Gmail at all, because that's only one component of Google's office suite. For example, it could include businesses with a small group of employees that use Google Docs but not other Google services, even if they do so in addition to Microsoft Office.

In any case, Gartner's estimate shows just how far Google is from catching Microsoft as the primary provider of business email. Gartner analyst Matthew Cain says the analyst firm counts only paid users of the business version of Gmail, whereas Google's numbers count paid and unpaid users with "the vast bulk being unpaid."

Google declined to comment on the Gartner findings.

Microsoft, meanwhile "has by far the largest share of any supplier, and it certainly has well over half the market for enterprise seats," Cain says.

The business version of Google Apps, including Gmail, Docs, Google Calendar and other tools, runs $50 per user per year. Free versions of all these tools exist, but the $50 fee entitles customers to a 99.9% uptime SLA, additional storage, customer support and security features.

Gartner's MarketScope report, which is similar to the analyst firm's "Magic Quadrant" series, upgraded Google's e-mail rating from "Promising" to "Positive."

The positive rating was also applied to IBM, Mirapoint, Novell and VMware's Zimbra. Microsoft was the only vendor to receive a "Strong Positive" rating.

Xandros, owner of Scalix e-mail, received a rating of "Promising" and Open-Xchange received a "Caution" rating. None of the eight systems evaluated received the lowest rating, "Strong Negative."

According to Gartner, Google has made progress with Gmail in the past year by adding "support for a native connection to the Microsoft Outlook client … a more comprehensive approach to managing and security mobile devices … ActiveSync for calendar and e-mail mobile support … migration tools for Microsoft Exchange … contextual gadgets for displaying imported data in the message," and a FISMA-compliant service for government customers. 

"We believe Google has made substantial progress in becoming a mainstream vendor," despite launching the business version of Google Apps only in 2007, Gartner said. However, Google still lacks some common user features and a "deep management console," so third party vendors have had to fill the gaps, the Gartner report continued.

Follow Jon Brodkin on Twitter: www.twitter.com/jbrodkin

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