Hosted Exchange Vs In-House Exchange!

Hosted Exchange 2010

You can’t get away from cloud computing in 2012! There is no doubt that the emergence of “the cloud” though not a new concept has expanded the range, and flexibility of services IT departments have access to for their businesses. One of the clear winners in the popularity stakes looking at the dramatic rise in adoption is Hosted Exchange email. Previously, businesses limited choices which were either to stick with a limited POP3 service, or to purchase and host their own Exchange environment.

Now with Hosted Exchange, organisations can have all the flexibility and benefits of an in-house Exchange without the capital expense and maintenance headaches associated with managing it. So, should your business go Hosted Exchange or should you manage your own Exchange environment internally? Let’s look at some of the Pros and Cons!

Purchase and Maintenance Costs

There are what seems like a never ending list of costs associated with building and maintaining an Exchange server environment: Many smaller businesses simply cannot afford this, and until Hosted Exchange they were limited in the type of email service they could use. Typically you should expect to see upfront and ongoing costs for;

Hardware: Depending on the size and spread of your business, an Exchange environment will require anywhere between 1 and 3 servers, more if you have multiple sites. These have a typical lifespan of 3 years and will require maintenance and additional hardware along the way. By going hosted you don’t need to worry about these costs.

Maintenance and Exchange backup: Servers require constant maintenance, updates and management which utilises skilled staff resources. Backing up Exchange properly is also costly and time consuming to maintain. Costs will also increase as your data volumes and archives grow. Going Hosted eliminates these costs and resource issues.

Software Licensing: From Exchange Server itself, to the server operating systems and user licenses, everything is an additional expense, and needs to be maintained and kept up with as you grow. All of this is included in your mailbox subscription by going hosted.

Scalability and Return on Investment

An important thing to consider when deciding on either hosted options versus an in-house Exchange setup is how quickly and easily you can scale it. This is an important factor in planning as you want your investment to be future-proof and give you the best return on investment possible for your IT budget. When building your in-house Exchange you will naturally build bigger than you are now to allow for increased capacity, but what happens if you never need it, or your business contracts during quiet periods? You spent more than you needed to, thus reducing your return on investment and you can’t simply return a few user licenses for your money back.

By using Hosted Exchange you can accurately predict exactly what your Exchange costs are going to be going forward, and what they will be if you expand or contract the number of users you have. You simply pay a fixed monthly subscription price per mailbox and can typically reduce or expand the numbers of mailboxes you require instantly. This subscription based computing is one of the most significant ways in which cloud computing is changing the way businesses access and use IT, as and when they need IT!

So why would you stick with In-house Exchange

After examining the benefits, flexibility and improved return on investment of Hosted Exchange, it’s hard to see why businesses would opt to buy and maintain their own Microsoft Exchange environment, though some will continue to do so. One reason might simply be peace of mind that they are keeping their data in-house rather than being hosted by someone else. Other organisations may have legal requirements too, where a company could be legally or contractually bound to host, control and save all communications in-house. In addition there are also potential tax considerations, as servers represent a capital expense and can be depreciated whereas services can’t. Lastly, the simple belief in the business that “we’ve always done it this way and it works for us”!

Moving to Hosted Exchange also has great benefits; it’s cheaper and more flexible and can be scaled according to the changes in the business along with the associated costs. In-house Exchange still has its place though for businesses with legal or contractual restrictions, so everything must be carefully considered before deciding on which option is best suited to your business.

Ideas for moving forward!

We would recommend that all businesses conduct both a cost and operational assessment before making the choice, to see which option suits your business best!

Cloud4 provides Free cloud readiness reviews for businesses who are looking at moving to Hosted Exchange. For more information or to book a Free review just visit the website here or email us at

One thought on “Hosted Exchange Vs In-House Exchange!”

  1. Hosted Exchange is completely scalable, so you will never outgrow or pay for unused services. You can easily add or subtract storage mailboxes and other features as your business needs change.

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