We were scheduled to adopt Google apps this February, but at the last minute a group of professors stymied the proposal for a number of bogus "privacy" concerns, which included, and I wish I was kidding about this one, a fear that our data could be hosted on a Google server in a country with questionable human rights laws. What?!
Meanwhile, we use the ancient open-source Horde e-mail system, which is slow, frequently down, and far less secure than Google's. It's expensive to maintain, and its webmail interface looks like it was designed by a kindergartener in the mid-90's. Plus, our pricey yet outdated university servers are just sitting in some random IT room on campus, and are probably far more susceptible to data theft than anything in the cloud (both virtually, and in the form of someone just picking up the servers and walking out with them).
The future is in the cloud. Institutions wise enough to adopt it will enjoy huge benefits; those who are too afraid will be left behind.
And don't even get me started on the generally sorry state of technology use in education...