I think email is on the decline just like the iPhone isn't selling anymore - only in news reports. Yes, it's not as popular as it once was however it is still a major method of communicating with customers. The availability of Google Apps (and similar services) for small to medium sized businesses is - from a sys admin perspective - an amazing thing. Their spam/malware protection is better than any other product I've ever used and it does it's work transparently.
I would counter that not only is email not in decline, it has become so important that individual businesses are outsourcing its deployment to larger firms who specialize in delivery and security with geographically distributed service centers. When you can get 30GB of storage, multiple services, spam/malware filtering, and somebody to call when it breaks for $5/mo per employee why would you spend money on your own infrastructure to do a tricky service like email?