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Breaking down the Exchange Online vs. on-premises choice

The continuous feature release model of Exchange Online might be a boon for some, but others might consider the need for constant training to be a detriment.

We all know the cloud is there, but how does an organization determine if a move from an on-premises platform is the right one?

Many companies currently using Exchange Server cannot escape from the siren call of the cloud. Untold numbers of organizations will weigh the pros and cons of Exchange Online vs. on-premises Exchange Server. There are many reasons to move to the cloud, just as there are ones to stay put.

Whether the cloud is better requires some deeper analysis. I've spent most of the last eight years migrating organizations of every size to Office 365. Over that time, I've grown familiar with the motivations to move to the cloud, as well as the ones to maintain the status quo.

This article will dig into the Exchange Online vs. on-premises Exchange Server debate and examine the differences between the two offerings, as well as which has the advantage in certain areas.

Is Exchange Online less expensive?

In many cases, the first selling point of Exchange Online is the cost. Since Exchange Online and Exchange on premises are very different, it's difficult to do an apples-to-apples comparison. To get started, you must look at several factors.

The first factor to weigh is how long you plan to keep your on-premises servers. If you upgrade your on-premises servers every three years, then it's likely those costs will exceed the payments for Exchange Online. If you plan to keep your on-premises Exchange servers for 10 years, then you'll likely pay considerably less than Exchange Online.

There are a number of costs associated with on-premises Exchange, such as hardware, electricity, data center space and repair costs. Due to all of these factors, the real answer is a lot more complicated than the de facto response from Microsoft that the cloud is always cheaper. Of course, it's to the vendor's benefit to get as many companies signed up for an Office 365 subscription as possible.

Is Exchange Online more reliable?

Just as there are several ways to look at the question of cost, it's also difficult to determine reliability in the Exchange Online vs. on-premises equation.

Microsoft touts its 99.9% uptime guarantee for Office 365. Upon closer inspection, does that assurance hold up?

Open any Office 365 tenant at any time and look at the service health dashboard. Every tenant I check has items marked in red almost every day, but those customers still pay for the full subscription. I'm not saying Office 365 has a lot of downtime, but that 99.9% uptime guarantee is more gray than it is black and white.


What are the perks and drawbacks
of a switch to hosted email?

As for on-premises Exchange, there is no way to evaluate the overall reliability of Exchange Server. I've seen organizations that almost never have problems, while others experience numerous major outages. I don't think Office 365 is more reliable than on-premises Exchange, but my expectation is data loss is less likely with Exchange Online.

Exchange Server is a very complicated and difficult product to manage. Unless you have some very talented Exchange admins, Exchange Online is the more stable choice.

Do you get newer features with Exchange Online?

In this area, there is no doubt which platform has the advantage. Due to its nature as a cloud service, Exchange Online gets new features well before on-premises Exchange. Not only that, but there are many features that are exclusive to Exchange Online. For a company that wants all the latest and greatest features, the clear choice is Exchange Online.

Every organization has specific needs it must consider, and quite often the traditional on-premises mail system does the job.

However, there is a downside to the constant stream of new features. It can take time for both users and administrators to recover from the culture shock that sets in after the migration to Exchange Online when they realize the feature set changes constantly. There is always something new to learn. Many workers prefer to come into work without spending time to learn about new features in the email system.

What's the final verdict?

Now that you've gone through the Exchange Online vs. on-premises deliberation, which is better? With the sheer number of factors to consider, there is no definitive answer.

Every organization has specific needs it must consider, and quite often the traditional on-premises mail system does the job. For example, a company that relies on public folders might see some difficulties migrating that feature to Exchange Online and decide to stay with the on-premises Exchange.

It's no secret Microsoft wants its customers to move to the company's cloud services, but they continue to develop on-premises versions of their software.

Microsoft plans to release Exchange 2019 later this year. When that offering arrives, take the time to evaluate all the features in that release and determine whether it's worth moving to the cloud. For some organizations, on-premises email might continue to be a better fit.

This was last published in May 2018

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