As soon as a few years ago, if a small business wanted professional and reliable MS Exchange services to push to mobile devices and work with Microsoft Outlook, the easy decision would be to pay for MS Exchange hosting with its annual fee per mailbox. In a business that had a handful of employees (i.e. a small mortgage or real estate firm that lived and breathed with email), this was a smarter business decision compared to having your own Exchange server and hardware.
Recently, Gmail's email services (including calendar, etc) have encroached on the small business email territory. Gmail is free and works with mobile devices. The storage space increases everyday (it's up to approximately 8GB now). However, a downfall to using Gmail for business is that each account is independently owned by the Gmail user, so the email account cannot be shut down by the employer and reviewed.
Ultimately, serious small businesses will stick with MS Exchange hosting, while small "mom and pop" shops will use Gmail. The gap between the two services in the business world is still wide, but at least Gmail provides a robust and feature-rich service for free.
