In a letter to employees last week, University of California Davis (UCD) CIO Peter Siegel announced the university’s recent decision to terminate its evaluation of Gmail, citing concern with Google's ability to keep email correspondences private and doubt over whether “outsourcing email [was] in compliance with the University of California Electronic Communications Policy."

And they are not alone. Yale University made a similar decision just last month, citing analogous reasons.

While the resource savings associated with a move to the cloud, particularly the Google cloud where organizations benefit from a massive economy of scale, are undeniable - large enterprises and institutions are beginning to ask the scary questions: How secure is the Google cloud? And can data ever be completely private in a shared hosted environment?

And the conclusion many large organizations are coming to, is no.

Because Google provides little to no direct control over the location and security of customer’s data in the cloud, enterprises and institutions must simply “take it or leave it” – as Google bundles it.

Are there alternatives? Yes, but generally at a higher cost than Googles very inexpensive Gmail. For organizations looking to take advantage of the benefits of hosting their mail, but concerned about data privacy, a dedicated hosted environment, where there is no commingling of data, is the best alternative.

But as the Cloud becomes a more popular alternative to in-house applications, this is a question every organization will have to explore themselves.

What do you think? Are UCD’s fears unfounded? Does your organization host their mail or are you still keeping these applications in house?