The percentage of commercial mailboxes using a cloud-provisioned model will grow from the existing one per cent of enterprise seats to 20 per cent in 2012, says a report from Gartner. This push into the cloud email model will cause fundamental restructuring of the email market.

"As large suppliers push into the cloud email market, we will see a fundamental restructuring of the email market," said Matthew Cain, research vice president at Gartner.

"Traditional, dedicated server model-hosting vendors will fare better based on their ability to offer larger-scale and more customised email. Traditional email software-as-a-service (SaaS) vendors will come under tremendous price pressure from mega-scale vendors," he added.

Cain said after email applications that will drive the adoption of cloud computing include instant messaging, social networking sites, web casts and podcasts.

"There will be a sizable collaboration and a mix of applications such as email and IM will lead mainstream adoption of cloud computing," said Cain.

Companies undergoing major email transitions could examine the cloud model for better email economics. "While large enterprises would not see substantial cost benefits, the cloud delivery model will enable them to redeploy their IT infrastructure, alter strategies to free up people and, most importantly, optimise user performance," he added. Even businesses with complex topologies and those with less than 99 per cent uptime could consider this model to simplify support and improve uptime.

Gartner believes the biggest cost for enterprise email operations during the next 10 years will be level-one helpdesk support as reduced licensing and operational costs improve enterprise cloud-based email economics.

The whole cycle – from evaluating the vendor to signing a contract to data migration – would take about six months. He immediately added, "However, the transition might be largely invisible to the users as the migration is smooth."

According to Cain, financial organisations will have a reserved approach because of security and compliance issues, "While we see interest across verticals towards this model, the financial and banking companies would be the last ones to adopt it," said Cain.

Latency and security remain concerns. "Companies that want to get out of the email business should opt for this model," Cain said.

The research and advisory company predicts that the adoption of cloud email will start with small companies and move to mid-size companies, and by 2012 the model will serve the largest firms with more than 50,000 seats.

Companies such as Google, Yahoo, Dell and Microsoft are all making major investments in cloud computing.