According Gartner, surge in hosted email will likely to represent 20% of the commercial email market by 2012 even though it was only at 1% in 2007.
The report stated that:
"Gartner's E-Mail SaaS Threatens Third-Party Vendors report warned that traditional third-party product vendors will suffer in four key areas.
Applications core to the running of on-premise email, such as disaster recovery, and spam and virus filtering tools, will be significantly affected by the move to SaaS email solutions, as will applications that extend the email platform, such as encryption and archiving.
Client-side applications, meanwhile, may not be affected initially, but are likely to decline as the prevalent storage model moves from client to server side, and users access emails via a browser rather than a client."
We have been helping partners to deliver IT smarter with a wide range of products in our hosted model starting with hosted Exchange, SharePoint (collaboration), archiving & compliance and wireless email.
Simply put, on-premise is not looking good as the cloud (hosted) model gains adoption and accelerates in this economy.