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Exchange Server: To host or not to host


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The benefits -- and risks -- of hosted Exchange

The idea of moving Exchange to the cloud stirs fear in IT pros, but hosted options make sense for some firms. Here’s how to decide if it is right for your company.

Today, IT managers of all stripes face tough questions about whether to keep IT resources in-house or move them to an external provider.

These choices stir angst in the hearts of many IT professionals, who often fear that moving applications off-site means losing control. Or they worry that it will wrest data and application control from the safer confines of a company’s four walls. These long-held objections sometimes keep applications in-house when the wiser choice might be to send them elsewhere.

Now, there are plenty of arguments for keeping Exchange Server in-house. On-premises email services enable you to keep tight control on access. You can ensure that data is stored and backed up correctly. On-premises services also bring the comfort that you’re meeting security and compliance requirements. Still, maintaining in-house deployments of services such as Microsoft Exchange is a strategy whose value proposition erodes with every passing year.

By comparison, moving Exchange to a hosted provider lets IT to return to the business of maintaining a company’s mission-critical tasks. It also frees IT departments from managing applications when they lack the resources to do so. So consider these questions: Are you up to date on the latest security technologies needed to protect your data? Do you have properly trained Exchange administrators managing your messaging architecture? Can you guarantee five nines of uptime, and can you do so at a reasonable cost? Many hosted Exchange services can answer yes to these questions. Can you?

It’s the ability to fulfill these business requirements that makes hosted Exchange an increasingly attractive proposal. But of course, a hosted Exchange model isn’t for every company.

Is on-premises Exchange still the status quo?
For years, many IT shops have been managing on-premises messaging infrastructures. With an experienced and talented IT team in place to accomplish daily management tasks, an on-premises Exchange infrastructure can fit all your business needs. The team can make architectural alterations, such as adding unified communications or collaboration features without have to wait on a third party.

Keeping Exchange on-site also eliminates concerns about data ownership. When Exchange resides within your LAN, you know that data is protected, secured and visible only to those with permissions. In highly secure organizations, an on-premises Exchange installation may be the only solution to fully meet challenging data protection needs.

But with total control comes uneasiness. Exchange Server is often the lifeblood of the business it serves; critical communications infrastructure must connect users through all available mediums. And today that includes more than just email: Unified communications, instant messaging, presence, textual voicemail and other mediums have quickly become important pieces of the day-to-day business communication paradigm.

A central problem with these new technologies is keeping IT staff current with product changes and evolution. Today’s unified communications technologies, for instance, are very different from those of just a few years ago. Even more important are the approaches used to deliver those technologies. These ancillary pieces require experience gained only through exposure. Once these communications applications are functional, managing them only distracts internal IT from daily maintenance activities.

The benefits of cutting the cord
Now set your in-house Exchange expertise against a hosted Exchange environment whose business is devoted to maintaining the application. In a Tier I hosted Exchange vendor’s world reside the world’s most-experienced Exchange administrators: IT gurus that live, eat and breathe a single technology across numerous customers.

Moving Exchange to a third-party means not only moving data and communications infrastructure but also shifting the burden of the infrastructure’s daily care and feeding to an off-site expert. Additionally, subscribing to another company’s Exchange infrastructure means that you must rely on its expertise to create exceptional availability. Most providers will stipulate their uptime guarantees, and most can guarantee that uptime at a level that’s far higher than you can affordably reach on your own.

But every IT service has its bad days. And a primary argument against moving to hosted Exchange centers on the repercussions when a hosting provider goes down. Typically that hosting provider is liable for reimbursing fees for the duration of the outage. But is downtime really an argument against hosted options? The situation wouldn’t be much different if you ran an in-house Exchange deployment and experienced an outage. And when this happens, who pays for your lost business? The most probable answer is no one. Considering that most hosting providers can leverage economies of scale to nearly eliminate uptime, your risks are relatively nominal.

The cost model of running Exchange off-premises is also enticing. In the long term, hosted Exchange services may be more expensive than owning your own equipment; however, never trust a return on investment (ROI) you didn’t create yourself. A hosted Exchange model does eliminate one important budgetary risk: unexpected costs.

Moving to a hosted model converts the sometime-unpredictable cost of in-house email to one that’s easy to plan. Each user pays a fee on a per-month basis. Essentially, you need to plan only for an annual increase of just a few percentage points to account for inflation; your business finance officers will appreciate the predictability.

The risks of letting go
One major argument against outsourcing email concerns the loss of security and regulatory control. When data is stored outside your LAN, how can you be sure that it’s inaccessible to those outside your company, including competitors? How can you ensure that your hosting provider is meeting regulatory requirements? You need to be able to answer these questions before moving over to a hosted platform.

Further issues arise with businesses that have already made an investment in the Exchange infrastructure. For those that have purchased servers, networking and storage and that have trained on-site personnel, trading in those investments for a per-month charge can break the financial model. With assets firmly entrenched, moving to a hosted model can eliminate all the expected benefits while greatly increasing the total cost of ownership. If this situation represents yours, tread carefully.

Issues of longevity and concern about selecting the right provider also top companies’ list of reservations about the hosted email model. Vetting a provider is an important part of any hosted service engagement; however, losing that provider can create a business problem of massive scale. Some Tier 1 hosting providers have become seasoned at servicing Exchange clients, which reduces some concern as their corporations and offerings mature. But it’s wise to err on the side of caution.

Calculate your ROI, understand your use case
At the end of the day, only you can decide whether your business will benefit from switching from on-premises Exchange to a cloud-based offering. Smaller and newer organizations can realize greater ROI by starting with the hosted model. With a short-lived corporate history and a small user base, these companies can immediately turn on services and enjoy even the most bleeding-edge technologies. More-established businesses will have a harder time justifying the move.

Notwithstanding your size, level of complexity or corporate history, hosted Exchange services aren’t going away. They are one of the growing stable of IT services that have matured enough to be packaged and sold. As revolutions in IT slow over time, we’ll see more offerings hit the market.

If you’re unsure of which option would work best for your company and prefer to dip only a toe into the options before committing, the best solution may be a combination of two alternate possibilities. Currently, some vendors have combined an Exchange product with other mail systems to create a type of hybrid Exchange offering. With the hybrid Exchange model, users who need Exchange Server’s full functionality can get it. Users who need a basic (and less costly) mail client can get what they need. Hybrid Exchange isn’t for everybody, but for those businesses with two classes of users, it might save you a few dollars.

The bottom line is this: Don’t fear the cloud; use it where it makes sense.

About the author:
Greg Shields, MVP, is a partner and principal technologist with Concentrated Technology. An IT industry analyst, author, speaker and trainer, you can find Greg at

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