Google's trying to advertise "Going Google", using Google Mail and Google Apps for all your business's work. I don't consider this a terribly good idea.

In less Google-focused circles, this is called "Cloud Computing", because network services are typically drawn as a cloud in block diagrams:

I've worked at two places now that "went Google". Sometimes it reduced the IT load. Other times… Google Apps is unresponsive (either too slow to use, or just down) at least once a week. It's always too slow for comfort (I'll get back to that in a moment).

Gmail has rather strict restrictions on sending a lot of messages (whether "I forgot my password" or more spam-like newsletters), and on the content of the messages, which can lead to the account being temporarily or permanently shut down. The hacks to work around that cost more time and effort than getting a proper mail server & sysadmin would have.

Your data & email are entirely at the mercy of someone else, who may shut you down at any time, for any reason they feel like, and may be difficult or impossible to get an explanation out of. If it's your gmail junk email box, that's no big deal. If you're running a company on it, it's a big deal, maybe a company- and career-killing bad decision.

This isn't specific to Google. Google's fine, as cloud computing servers go. There are five problems inherent to storing your information in the cloud:

Speed

If an operation takes 1x time in memory, it'll take 100x longer on a local hard drive, 1000x longer on a local area network, and 10K-1M x longer over the Internet. Saving a file might take milliseconds (0.001 seconds) locally, but can take 1-10 seconds or longer to the cloud. Most Internet connections are not symmetric, which means they upload files MUCH slower than they can download, often 5-10x slower.

Reliability

Sending something over the Internet is not all that reliable; it's entirely possible for a connection to just fail. Usually you can just resubmit, but I'm sure everyone has lost web comments or posts when a submit failed. Or worse, when they hit "Back" by accident, or when the browser crashed. That's why I write every blog post in BBEdit, save it locally (actually, I neurotically save after every paragraph), and THEN post it to my blog through a web form.

Offline Use

You can't use any of your documents or mail offline if they're in the cloud. If your office or home Internet goes out, you can't do any work, you're completely shut down for the day. Wifi and tethered cell phones can give you some coverage when you're out of office, but they're even less reliable.

Backups

Do you have redundant offsite backups? I do. Any halfway-competent sysadmin will. On one hand, the cloud gives you a permanent offsite backup. But you have no control over it. You are entirely at the mercy of Google. Maybe they'll suspend your account. Maybe you'll delete a file by accident; can you get it back? How far back is it saved? These aren't insurmountable, and Google's databases are safer than most home users non-backed-up data, sitting on a single computer. But for a business these are terrifying risks.

Privacy

So Google has all your documents. Your mail. Your contacts. Your business plan. Your financial data in spreadsheets. And they're scanning it. No Google employee should, supposedly, ever see it, but the search engine does… and accidents happen, and people aren't always trustworthy.

So what's the alternative? Get a real mail server & a sysadmin to run it. Store your documents in version control (preferably Perforce or maybe Mercurial; Subversion is awful for non-programmers, and painfully slow). A wiki on a LAN can work, but has the same problem of slow updates, and makes anything except wiki markup a pain to work with.