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Should my small business move to Office 365?

We're a small company with 200 mailboxes in on-premises Exchange 2013. What could Office 365 do that on-premises Exchange can't?

A lot of companies use Office 365, including Exchange Online, instead of on-premises Exchange. For many organizations, the decision is more about what they don't get from Office 365, instead of what they do get. I run my company's email in Office 365. Because I don't want to manage my own Exchange deployment, Office 365 is the best decision. For the sake of convenience, I'm willing to give up control of infrastructure decisions.

One of the primary advantages of Exchange Online is a highly available messaging option with a strong service-level agreement. The equivalent on-premises infrastructure could be cost-prohibitive and a logistical headache for a small- or medium-sized business. There's also the immediacy of Office 365. It's as close as admins are going to get to snapping their fingers and having Exchange 2013 deployed. From an ongoing maintenance perspective, admins will always have the latest version of the product, the latest updates and newest features.

Arguably the best feature of Office 365 is that it supports hybrid configurations with on-premises deployments of Exchange Server. Fundamentally, it doesn't have to be a "one or the other" decision because the limitations of one can be fortified by the strengths of the other. But the reality is that organizations don't want to move all or even part of their messaging system to the cloud for a number of reasons. For these organizations, the on-premises deployments of Exchange 2013 will provide the same functionality as Exchange Online without the potential limitations of a shared infrastructure.

My recommendation is to carefully review the service descriptions Microsoft published for Office 365. If admins find anything in the service description that's a deal breaker for their organizations, it's better to find out before beginning a migration to the cloud. Even if admins find a stopgap, a hybrid option could be the right answer for an organization.

About the author:
Richard Luckett is a consultant and instructor specializing in messaging and unified communications. He's been a certified professional with Microsoft since 1996 and has 20 years of experience in the public and private sectors. He's a Microsoft Certified Trainer with more than 15 years of training experience with the Microsoft product line and received the Exchange MVP award in 2006, 2007 and 2008. He's also an expert in deplo ying and integrating Exchange Server and Lync Server. He leads the Microsoft training and consulting practice at LITSG.

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Why would a small biz Not use Office 365?
Because that small biz do Not want to give their Data/Emails to Microsoft :-)
Agree 100% with John1776.
Companies do NOT want to give their Data/Emails to Microsoft.
This forum is obviously very strongly promoting the Microsoft approach. Fair enough, we understand that.
But an organization with 200 users should have competent IT management and support.
Given this, together with the fact that Exchange Server is not rocket science, once an in house environment is configured, you have:
1. An integrated, in-house Active Directory environment (no ADFS for single sign-on etc.)
2. Availability generally higher than cloud services. Azure had significant outages last year, for example
3. Efficient internal email, independent of network bandwidth.
4. Fixed license costs - generally amortized over 5 years - the anticipated lifespan of an Exchange Server implementation. Seeing the number of Exchange Server 2003 to 2013 migrations, this may be much longer even...
5. Internal security and control.

Obviously this is totally dependent on having IT competency. But if the organization does not have competent IT management and support, they probably consider their systems to be unimportant - irrespective of whether the business is dependent on them or not! - I have seen that too often before!!!
We are a larger company, closer to 3,000+ mailboxes and we do not use Office 365. The reason is cost. We still have a lot users on Office 2010 and it suits them fine. They have no need for an upgrade as most may only use Word and Excel plus Outlook for mail. A few who are using the other programs in Office on a regular basis have a newer version. Even myself being a developer I only have Office 2010 and I'm fine with it. Unless somebody can justify the ROI on a corporate wide upgrade, when we are running fine now, we will most likely stay put.