Hosted Exchange? A Better Deal?
Alexander Muse , December 22, 2007
Most of our clients use Exchange for their electronic email. If you spend time running the numbers comparing hosted Exchange to having your own internal Exchange solution I think you will find that an internal solution is less expensive. There are a few exceptions including companies who ONLY use Exchange ~ if your company has no other applications to manage it may be worth looking into a hosted solution. But if your company has an office with users you are better off leasing an Exchange solution from Dell. If you are interested we can sit down with you and explain.
Hosted Exchange providers would beg to differ. They even provide very amusing calculators. For example, Rackspace offers a hosted Exchange solution for 22 users for $11,861.52 per year. They claim that a similar internal solution would cost $227,255.00 in year one and $151,534.00 each year after that (see graphic at bottom). Huh? Really? Of course, Rackspace suggests that if you buy their hosted Exchange solution you won’t need bandwidth (i.e. your office no longer needs a T1), you won’t need servers (you can save your files on your laptops) and you won’t need IT support. Hosted Exchange is a great alternative to leasing software and equipment. If you don’t have a reason to use IT support besides email you should seriously consider a hosted solution, but if you have other applications that need support (i.e. computers, laptops, accounting software, backups, Blackberry devices, Treos, iPhones and so on) you might be better off leasing the software and equipment.
Why isn’t a hosted solution cheaper? Simple, Microsoft’s licensing arrangement does not allow a hosting provider to ’scale’. When you sell more licenses to Exchange you don’t get a better deal ~ you don’t get to pay less per license as you grow. Even worse, as you grow the software you need to manage a larger hosted Exchange environment grows. It actually becomes more expensive per user as you get bigger and bigger.
