Gmail vs. Traditional E-Mail: Savings Adding Up

A new Forrester report reveals how much cheaper Web-based e-mail such as Google's Gmail is in comparison to traditional e-mail installed on-premise for businesses with up to 15,000 users. But analysts warn that most enterprises won't be making a wholesale switch to Web-based messaging for years to come. Instead, they might pursue a hybrid model where they move some e-mail services to the cloud and keep some on-premise.

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For typical information workers, Forrester estimates that it costs a company $25.18 per user per month for an on-premise e-mail system, including the hardware, labor and other costs associated with managing e-mail in-house. Alternatively, for companies using Google's fully Web-based Gmail, it costs a mere $8.47. Microsoft Exchange Online, Microsoft's version of a fully cloud-based e-mail, isn't quite as cheap as Gmail but rings in at $20.32 per user per month.

The research was based on a survey of 53 enterprise-sized companies in both Europe and North America.

According to Ted Schadler, a Forrester analyst, many companies underestimate the cost of their on-premise e-mail, which should include staffing, maintenance, storage, archiving, mobile access and financing. All of those costs are typically included when you get the per user per month price with cloud-based e-mail.

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