Newsom is an upscale lowlife who knows absolutely nothing about IT. Sounds like he picked up on a magazine article on a plane flight and now he knows everything I work in SF financial district every day doing IT and NO ONE outside fasionable cocktail parties are talking seriously about this. Maybe his dog groomer might consider a move to O365, but a city or a corporation?
1. Small companies see the cloud for real savings when they just need simple apps, email, and even simplier security controls.
2. Medium and up (+100 heads) have more complexity and sometimes an app or two in the cloud (Salesforce, MS CRM, Email or Spam filtering) makes sense, but the data really resides in house. So go with Office 365 and let go the Exchange guru who probably did a lot more and hire a guy to maintain the AD sync and coordinate with Salesforce, etc. when something is not flowing. You still need support and service maint.
3. Large companies talk about it like Newsom and only so they can hear themselve say cloud. No CIO is going to take risks while Amazon "goes down" or Azure "is having a bad day". Sorry, they have their own diesel contracts for their own facilities on company property. Big IT even uses SMTP services only if they really make sense.
After having used hosted Exchange since 2002 I can say the hosts do hav a role, but they can not give us application customization our in house developers do with our in house core products.
Really the question here is: can it ALL be moved to the cloud? Yes, for some and soon for everyone else who will yield control. Today your give your data to LinkedIn, tomorrow Google.......appcreep