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What are the pros and cons of a hosted Exchange Server deployment?

Microsoft offers traditional Exchange Server licenses and cloud computing-based Exchange Server subscriptions. This raises the question of which licensing model makes sense for your enterprise. Is it better to use a traditional Exchange Server deployment or outsource Exchange using a hosting provider? Here are some pros and cons of each model to help you decide what's best for your organization.

In 2008, Microsoft announced that it would offer both traditional Exchange Server licenses and cloud computing-based Exchange Server subscriptions. With more options, this raises the question of which licensing model makes more sense for your enterprise. This tip from Exchange Server expert Brien Posey weighs the pros and cons of traditional Exchange Server deployments versus cloud computing models.

Although Microsoft offers its own hosting service, several major ISPs also host Exchange Server. If you're seriously considering using a hosted Exchange service, then it's extremely important to think about more than just subscription costs. Here are four things to contemplate before making a decision:

  • One of the most important things to consider is the provider's service-level agreement. You must know what level of service you're paying for, and what you're entitled to if the hosting provider experiences an outage. A reputable provider should offer you a credit for any amount of time that the service was unavailable.
  • Find out if the Exchange hosting provider will help you migrate existing data to the hosted server, or if you must do this yourself.
  • Check to see what happens to your data if you cancel your subscription. Some hosting providers retain ownership of your data as a way to prevent customers from canceling their subscriptions.
  • Make sure that the provider is actually using Exchange Server 2003 or Exchange 2007, and not an outdated version of Exchange or some other messaging platform. Additionally, you should to be aware of their support policy.

Should you use a hosted Exchange Server provider?

Possibly the biggest advantage of outsourcing Exchange Server is simplicity. Using a hosting provider frees you from day-to-day tasks such as patching your servers. On the other hand, you're basically at the mercy of the hosting provider.

Do they keep their servers up-to-date? Are they running the appropriate anti-malware software? How do you really know for sure? These are some big issues, especially if your organization is subject to various security regulations. Some companies may outsource their messaging platforms to achieve compliance with certain regulations. The hosting company provides the organization with a written guarantee of compliance, and the organization doesn't have to worry about performing its own message archiving and other required security procedures.

More on Exchange Server licensing and hosting:
Microsoft Exchange Server 2007 licensing demystified

Hosted Exchange Server to infiltrate the enterprise


Another issue to consider is performance. Outsourcing is attractive to smaller companies who find the monthly fee minimal compared to the cost of purchasing a server and necessary software licenses. Exchange hosting providers can offer the messaging service at a low price for two reasons.

First, a provider will often use a single mailbox server to host multiple email domains. This means that you likely will share server space with several other companies. Therefore, your Exchange Server performance could suffer as a result of how heavily another company use Exchange.

Second, hosted Exchange providers know that monthly fees add up. Over time, you could purchase your own Exchange Server with the money that you've spent paying a hosting provider each month. On top of the monthly fee you must pay, many hosting providers also charge additional fees each time you add or remove a mailbox, restore a backup or need them to perform any other administrative activity.

Unfortunately, there is no cut-and-dry answer to the question of whether a hosted Exchange Server solution is right for your company. I believe that a hosted solution works best for smaller companies that can't afford an IT department. It can be more cost effective in the long run for larger companies to manage their own Exchange Servers and retaining control of their organization.

About the author: Brien M. Posey, MCSE, is a five-time recipient of Microsoft's Most Valuable Professional award for his work with Exchange Server, Windows Server, Internet Information Services (IIS), and File Systems and Storage. Brien has served as CIO for a nationwide chain of hospitals and was once responsible for the Department of Information Management at Fort Knox. As a freelance technical writer, Brien has written for Microsoft, TechTarget, CNET, ZDNet, MSD2D, Relevant Technologies and other technology companies. You can visit Brien's personal website at www.brienposey.com.

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