The Software as a Service (SaaS) model for e-mail solutions is proving attractive for many customers and will represent 20% of the commercial e-mail market by the end of 2012.

According to Gartner, the SaaS e-mail market represented 1% of the commercial e-mail market.
Gartner analysts said that the impact of the SaaS model for e-mail will have direct and material consequences for traditional third-party product vendors, effectively cutting the addressable market for traditional third-party applications by one-fifth. However, by 2012, the move to the SaaS model for e-mail will create opportunities for new third-party applications.
"The lost opportunity to the traditional third-party market may be more than 20% because the earliest adopters of the e-mail SaaS model are small or midsize businesses (SMBs), which can represent up to 40% of the market when measured by the number of companies which are likely prospects," says Matt Cain, research vice-president at Gartner. "However, SMBs are less likely to buy third-party tools compared to larger organisations."