Microsoft Exchange 2010

Hosted Exchange pricing is one of the most compelling arguments used in convincing people to use software as a service, or outsourcing their email services. On the surface it looks like a basic calculation. Setup costs plus running cost versus monthly fee for per seat licensing. It isn’t always that easy though, contrary to what many would have you believe.

The standard calculation is upfront costs vs. monthly ones. For example, for a 5 user mail system the calculation is often illustrated as follows:

• Cost of Exchange server hardware                      $3000
• Small Business Server with 5 Licenses                        $560
• Anti-virus for Small Business Server                     $400
• Backup tape drive                                           $420
• Setup fees                                            $1700
• Annual estimated maintenance cost @$100 month       $1200
• Total cost for first year                                 $7380

The hosted model looks something like this:

• Cost of Exchange server hardware                            $0.00
• Small Business Server with 5 Licenses                        $0.00
• Anti-virus for Small Business Server                     $0.00
• Backup tape drive                                           $0.00
• Setup fees                                            $0.00
• Annual estimated maintenance cost per server           $0.00
• Monthly mailbox cost per user $15×5                   $75
• Annual charge for 5 mailboxes @$15 per month each   $900
• Total cost for first year                                 $975

On the surface hosted Exchange pricing looks to have proved a compelling case. However, these are simplified examples. What it doesn’t take into account is bandwidth, tolerance, SLAs and support.

Many hosted service providers will have a robust support system that offers 24/7 support for issues, but that isn’t a given. Neither is tolerance. To survive long, the service provider needs to utilize server clustering or virtualization to keep downtime to a minimum, but that again, is not a given.

Bandwidth is a big issue, especially as net neutrality is becoming such a hot topic. Hosted Exchange pricing doesn’t take into account the end-users bandwidth costs, which can be considerable unless they rent a fixed pipe. With our email habits often including large files, such as .pdfs or CAD drawings, bandwidth becomes a problem.

In an in-house situation, the only bandwidth problems are the internal network or where the business emails externally with any frequency. These issues can be managed internally. A 10-base-1000 internal network costs relatively little to implement, but buying that kind of bandwidth from an ISP can cost considerably more.

However, to balance that argument, the costs for an in-house Exchange Hosting system is also oversimplified. Servers don’t work in isolation, they need a network, security and availability to be productive. That doesn’t often get factored into a calculation. While it can be argued that most organizations already have a network in place, it isn’t always sufficient to cope with the extra traffic.

Then there is maintenance. Costing it at $100 per month is a very simplistic, and in our opinion generous amount. A server technician costs much more than that, and this calculation is only good in larger businesses where the cost per head is split among many servers.

Hosted Exchange pricing is a complicated process, and one that needs to be undertaken thoroughly in order to get it right. Be wary of these oversimplified pricing illustrations and make your own. It might save you some money.

Email hosting is becoming more and more common. Many companies will not want to have their email accounts hosted with the same company that hosts their website. This is to keep everything separated as well as to provide an extra layer of information security. An Email host is a very delicate business requiring perfect up time as well as special attention so that emails arrive on time and in tact. Any delay of an email can result in both time wasted as well as money lost.

Many larger email hosting customers use Outlook or another desktop management program. These programs download and upload email through the program to the email account associated with the program. These email accounts require that the upload/download speed work at all times. It must also be rather speedy to ensure that emails are sent and received on a regular basis. Check with your email hosting provider about SMTP lag times or restrictions. Some providers may limit the amount of “pushes” that can be done within one hour. Other providers may not visibly limit the number but secretly limit the amount that can be sent each and every hour.

There are a number of different ways in which an email host can charge for accounts. The host can either charge per account or for the entire plan for a company. It depends upon the account. Many hosts implement limits on total file attachment size. Anything over ten MB is extremely generous for a host to give. Do not neglect checking into the hosts IP address. Some email hosting companies have been abused or abused their servers themselves. These servers sent out spam emails and were blacklisted by major ISP’s. This simple black listing could cause problems with the deliver ability of messages as well as cost you a number of customers.

There are a number of tools available to check how many websites are hosted on a specific server. It is slightly more difficult with an email hosting company but is still able to be done. While it is common for companies to put hundreds of websites onto one email host server, it is important to check server specifications. Any server that has a load higher than the number of processors should not be handling any more new accounts. Also, ensure that these servers have adequate processing power. One dual core processor is not enough for a server with hundreds of thousands of email accounts. Any web host that is providing this type of service should be avoided at all costs!

Customer service is the last step in the email hosting chain. While no one ever wants to have to speak with customer service that does not mean that it does not happen. In fact, it may be much more common than you think. Talk with customer service about any small problem and see if they will help you. Pricing may be the final factor but without a good customer service team, an email hosting company has nothing!

Email hosting is a growing industry. While there are a number of different businesses that offer complete exchange hosting solutions, off site email hosting is seen as another step in redundancy. Best of all, email hosting costs just a fraction of traditional full hosting package bills. Email is seen as less data intensive as well as easier to manage due to less user troubleshooting being required.

Email hosts still need to be verified before they are used by any type of business. Most reputable email hosts will allow for a trial account to be created so that any fears can be put to rest. SMTP download speed, account settings, HTTP headers and test emails can be sent to ensure that the account will meet your needs. Email hosting can be a difficult business to succeed in. Excellent customer support is rare to find. Companies that provide it often do not have an excellent quality product. Finding a combination of both an excellent quality product and superb customer support is not impossible.

Email hosting is all about redundancy. Hosts need to have redundant systems in place to ensure that you continue to receive email even if your main server down. This could be due to a power outage or a hardware problem. Typically, another server in another data center will pick up the slack. However, hosts who want to save money and do not want to pay for the extra cost will try to skimp. Talk with your email host to ensure that at least double redundancy is in place for your email hosting solution.

SMTP lag time is a big problem among web hosts. Having your email download to your computer is important to some individuals. Depending upon whether or not it is important to your email hosting solution, you should check the SMTP download time on multiple machines. Most of the time you will not encounter a problem, should you notice one, contact the support at your email host.

Each email hosting account should cost no more than three dollars per month. This price allows a host to provide excellent quality support and a first class product. The email hosting company should not offer “unlimited” disk space or “no size restriction” attachments. They are simply not going to be able to back this up should they be faced with a situation of abuse. It is always better to deal with an email hosting company that sets definite limits rather than a company that oversells what it is able to provide. It shows that the company actually respects their customers as well as is honest about their product.

Email hosting can be one of the most difficult web products to select for your business. Email is so vital to so many different functions of a business. Whether it is communication with a client or receipt of an invoice, email powers almost everything. Check out the many specialized email hosting providers before making a final decision on who hosts your email.

Microsoft’s partners are saying that users are not in a hurry to upgrade to Exchange 2010. Market researchers have also concluded that the adoption of Exchange 2010 will get delayed until late 2011.

Microsoft has claimed savings by the use of Exchange 2010 but customers are not likely to buy it. The email system, however, has earned appreciation from its testers still users are not queuing up to buy.

There are many reasons behind this lag. First of all, Microsoft’s claims about savings do not appear as appearing compelling to users. While certainly there is truth in the saving claims of Microsoft, but an organization needs to have the correct environment to take proper advantage claimed by it. It might be a good decision for an organization to buy Exchange 2010 if it wants to move to the cloud some of its mailboxes, or if the organization is in a good condition to change its voicemail system. Microsoft’s claim of storage saving is still debatable! The only non-debatable fact is that not many organizations have yet shown interest in buying the new email system.

Yet another reason is that it is too early a shift after Exchange 2007. Organizations have waited for a long time for Exchange 2007 and many changes have broke the ISV and internal processes (i.e. to remove the Recipient Update Service) and also because it was a difficult install process. Just after shifting to 2007, migrating to 2010 will be a lot of unplanned work for organizations.

Even users are not yet interested, but some feature innovation is extremely good in Exchange 2010. Hybrid cloud innovation makes a good sense and is useful for businesses of any size.

Metalogix has surveyed more that 800 administrators and found that around half of them are still using Exchange 2003, and on top of that only 20% of them planned to upgrade to 2010. The survey was conducted shortly after the release of 2010. Apart from the fact that Exchange 2010 was released before the survey, most of the administrators planned to migrate to 2007, therefore the conclusion by Metalogix that the adoption of Exchange 2010 will not increase for at least two years more.

Despite user skepticism, Microsoft is marketing its new exchange server as a cost cutting choice. According to the cost saving calculator of Microsoft, users can save hundreds of thousands of dollars every year if they switch from 2003 to 2010. Most of the calculation requires use of the new exchange as a unified communication server. Most of the savings are in the form of third-party fees for services like voicemail, archiving and mobility. If those services are found in house, then savings may not be found.