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 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.