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Exchange hosting is not a one-size-fits-all choice

There are two distinct sets of providers of Exchange hosting services depending on whether your organization is large or if SMB is more your size.

This article is part of an ongoing series of articles about Exchange hosting.

Market overview

As discussed in parts one, Exchange hosting makes a comeback, and two, Decision points for Exchange hosting: Pros and cons, of this series, Exchange hosting has been growing nicely since the release of Exchange Server 2003, which makes it easier for application service providers (ASPs) to offer the service. This is largely due to performance enhancements across the Internet as a result of the new Outlook 2003 cached mode and remote procedure call (RPC) over HTTP.

An increasing number of companies are evaluating outsourcing Exchange hosting. They feel it will counter the cost and complexity of building a comprehensive e-mail solution that includes spam filtering, virus scanning, robust and scalable storage and regulatory compliance requirements. Some are finding these bundled services a compelling addition.

Market analysts see continued growth in the Exchange hosting market driven by businesses that want an enterprise-level messaging platform and infrastructure without the cost of buying and maintaining it themselves. The hosted Exchange business has grown by 80% in the past year, according to Ignacio Davila, the product manager for Microsoft's platform hosting group. Morgan Cole, product manager of hosted messaging and collaboration at Microsoft, said there are more than 12 million hosted Exchange mailboxes worldwide today.

Large-company market leaders show a gamut of services

For large enterprises, the market leaders are AT&T Global Network Services, EDS Corp. and Hewlett-Packard Co. These companies offer a very wide range of outsourced services to meet the variety of enterprise needs. They typically offer fixed per-user pricing with performance guarantees. Service-level agreements (SLAs) define expectations for availability and performance and they are monitored very closely by both the customer and provider teams.

In the small and mid-sized business (SMB) market, the field of providers is growing rapidly. The prices and overall value range widely as the market continues to develop and define itself. In the SMB category, there are two distinct categories for Exchange hosting: shared and dedicated. Shared hosting is where numerous companies share one Exchange Server. In dedicated hosting, one Exchange Server is dedicated for the use of one company. Dedicated servers typically offer greater flexibility and stability, while shared Exchange hosting tends to cost less making it more appropriate for smaller businesses.

There are a lot of providers in the SMB category. The following companies represent the wide range of services they offer: 1&1 Internet Inc. offers a large disk quota of 1 GB for $6.99 per month. This is a great solution for smaller companies, though it may be limiting for larger ones because some of the basic features of Exchange Server are missing. eOutlook, a service from Apptix, is a newer offering, and Mi8 Corp. has been around for a while, and both offer shared Exchange hosting with all the basic features of Exchange Server at a good price.

Another small-to-medium market leader worth mentioning is Group Spark's, which offers both shared and dedicated Exchange hosting -- with 100% service-level agreement (SLA) -- for SMBs. For companies that need a comprehensive offering, this service seems to offer everything from compliance-driven archiving to SharePoint hosting. For solution providers that want to offer hosted Exchange to their customers without building the infrastructure, Group Spark offers a private-label program that allows resellers and providers to offer hosting branded as their own.

What to look for when selecting vendors

Because a plethora of vendors offer hosted Exchange services, it can be difficult to choose one. Here are some questions and considerations to use in your evaluation process:

  • What is the SLA? The standard is 99.9% and 100% is exceptional.
  • Is the SLA guaranteed? What is the penalty if it is violated?
  • What is the actual uptime percentage over the previous 18 to 24 months?
  • How many Exchange Servers in total does the vendor operate?
  • Is the server shared or dedicated? Dedicated is typically preferable, although the size of the hosted company may not warrant it.
  • What is its backup and recovery process?
  • Is there a contract-term length? Shared vendors typically don't have a contract.
  • Are there setup fees?
  • Does the vendor support the latest Exchange Server features: Outlook Mobile Access (OMA), Exchange ActiveSync, and RPC over HTTP?
  • Are there fees for VPN access? Most vendors do not charge for this.
  • What monitoring systems are in place? Ideally, MOM 2005 should be used.
  • Does the vendor provide a backup Mail Exchange record in case the primary fails? This is a must, but, surprisingly, many providers don't offer it.
  • What is the technical support availability? The better ones offer 24/7 support.
  • Does the vendor give you access to a Web-based provisioning tool that lets you manage users, distribution lists and so on?
  • Are other key features provided, such as Blackberry Enterprise Server, SharePoint, spam filtering, virus scanning, OWA, POP3, and IMAP?
  • Is the vendor running the latest version of Exchange Server SP1?
  • When the next version of Exchange Server is released, will you receive a free upgrade from the vendor?


Exchange hosting is a good solution for some businesses. For small organization that want more functionality than its ISP's limited POP3 e-mail; for the medium-sized organization with limited technical resources; and for the large organization that wants to consolidate and outsource, Exchange hosting is worth looking at. Read all the articles in our Exchange hosting series to learn more about this service and how it could benefit your company.

Lee Benjamin has more than 20 years of experience in the messaging industry. Since retiring from Microsoft in 1997, he has consulted through his company, ExchangeGuyConsulting, for enterprise- and medium-sized organizations and software firms. His main interests are migrations, directories, security, mobile access, calendaring integration and RSS. Benjamin is also a regular trainer for Pinnacle Training Corp., an analyst at Ferris Research and a regular contributor to

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