Lately, we have been getting many questions from business owners about Hosted Exchange versus In-House Exchange. As an IT professional, who has been in the business longer than I’d care to admit, this was very exciting news! Not so long ago we had to explain the benefits of Exchange to our customers and now they are bringing it up in conversation, asking for specific solutions. This definitely makes a more interesting conversation. Many of the clients that we have been talking with seem to like the Host Exchange concept and think it’s the way to go mainly due to the fact that is “cheaper” then building and maintaining an in- house Exchange environment. But the truth is it’s not always that simple; there a two factors in determining which exchange solution is right for you: How many users? What is your upfront and long term budget?
We will start by analyzing two companies, Company A and Company B. Company A has three employees, while Company B has twenty five employees. For comparison purposes, all employees in both companies have blackberries (because, let’s face it who doesn’t nowadays?) and require 5GB mailboxes per employee (standard). Now let’s take our calculators and do some math.
Company A
Hosted: The industry standard per mailbox is generally around $10. To be even more specific, Intermedia (Our favorite Hosted Exchange provider) charges $10.30 per mailbox and $32.85 for three mailboxes. Then add in a blackberry per employee at $9.95 a pop, for a monthly total of $29.85 for all the employees. So our monthly total for 3 users with blackberry support is $62.70 that adds up to $752.40 annually.
In-House: Considering the cost, generally, there is really no good reason for a 3 man shop to have an in-house Exchange server. You will be wise to stick with hosted Exchange.
Moving right along….
Company B
Hosted: Intermedia has a plan for 25 users at $270 per month add in Blackberry’s for $248 per month for a total of $518.75 per month. That comes out to $6225 a year.
In-House: Presumably if you’re a 25 person shop, you already have a server. Therefore to consider the true cost of bringing Exchange in-house, we need to look at the difference of software with Exchange versus software without Exchange. Lucky for us, Microsoft has a product suited perfectly for small companies, perfectly named Small Business Server (“SBS”). The cost to buy SBS and the appropriate Exchange licenses is $4,300 (includes Exchange and Blackberry licenses for 25 users). The same set up with a standard server (not SBS and no Exchange) is $1,200. The difference between the two setups is $3,100, approximately six months of hosted exchange.
It’s important to consider set-up and maintenance for Exchange. If you’re a 25 person shop, hopefully you have someone maintaining your IT infrastructure. The cost to implement SBS with Exchange should be a flat rate negotiated with all your other needs. Generally any IT solutions provider worth their salt should be able to maintain this SBS set up for around $350 a month (includes backup and spam filter for all users).
In conclusion, in-house Exchange is cost effective (if set up and maintained properly) and can give you granular functionality that you may not have in a hosted Exchange environment. Obviously we did two extremes in the examples above and there is a lot of middle ground. If you have any questions, please feel free to contact us for a free evaluation of your needs.