Over two years ago I began working with a couple of SMB clients (around 30 staff in each) who were going to lose access to their Exchange Server infrastructure as a result of being sold by their parent company to become part of a much smaller organisation.

The new business owners were faced with making a significant investment consisting of new server hardware, 1 Exchange Server 2003 license, 1 Windows Server 2003 license, 60 Exchange CAL’s, along with anti-virus and anti-spam software licenses. With the software license costs approaching AU$15,000, and a modest server adding another $5,000, the new owners were understandably a little nervous to begin talking about what my consulting fees might be for installation and ongoing support.

Having been a happy user of a hosted Exchange mailbox service for my own business email for a little over a year at that time, it seemed prudent to recommend to my shell-shocked client that perhaps external exchange mailbox hosting may be a viable alternative. Pricing from U.S. hosted providers is $9.95US per mailbox per month, with Australian-based providers charging similar amounts, but aren’t as generous with storage space on the default plans.

I stayed with my first hosted exchange provider for 9 months, but the minimum hosting fee of $49.95US per month (equivalent to 5 mailboxes) seemed a bit rich after a while, and it only included 100Mb of storage for each mailbox. (They did provide free Sharepoint 2003 however, but I never used it.)

As a result I switched to another provider which included 200Mb of storage per mailbox (shared across all accounts), and a minimum of 3 mailboxes for $32.83US per month. Apart from being better value I like their administrative interface much better than the previous, so I’ve stuck with them ever since with absolutely no problems.

My current provider also includes AV protection and access to anti-spam software in the overall price, others may change a small amount extra per month for these services. (Hint: always sign up for antivirus and anti-spam services). I’ve never received a virus email, and my spam emails have been cut down to about 1 every 2 days on average. On top of this, Outlook Web Access (OWA) is available instantly so mail can be managed through an IE browser from any internet-connected pc, and they throw in a license for Outlook 2003 for every mailbox.

The Results - 2 years later
Both clients have estimated to be spending around $5000 AUD p.a. and estimate to have saved at least that much again each year in licensing and consulting fees. The best part is that administration requirements are almost zero, and the service has always worked.

Upsides and Downsides
In my opinion, if you are a small-to-medium sized business and want the groupware features offered by Microsoft Exchange, it’s hard to ignore a shared Microsoft Exchange Hosting service as a viable alternative to having your own server. I see the upsides and downsides as follows:

Upsides:

• You don’t need to run Windows 2003 server to have access to Exchange Server 2003 mailboxes.
• It’s far cheaper than buying a server and licenses.
• Almost no I.T. administration required (no server patching, software updating, backups or maintenance).
• 99.999% uptime guarantee.
• The hosting provider takes care of the rack space, servers, security, depreciation and the other physical and financial aspects of managing IT equipment.
• Enterprise-level AV and Anti-spam available at very low or nil extra cost.
• Outlook 2003 client software licenses included.
• Very simple administration through a web browser. Includes being able to add/remove mailboxes, change passwords, add additional domains, add additional email addresses, add/update global distribution lists. Etc.
• Simple to upgrade for access via Blackberry (costs extra)
• Outlook Web Access built in.

Downsides:

• Backups are done several times a week and retained for only 1 week, and restoring an information store in pst format can cost up to $450US. (This may not be appropriate for some organisations, but bi-monthly offsite backups are available as an additional service.)
• Outlook client username/password is not shared with your existing directory service. (Each time you start outlook, a password needs to be typed in).
• Works best with the Outlook 2003 client running in Cached mode, which only installs on Windows 2000 or XP clients.
• Phone support is U.S. based, and only partially available during Australia business hours if you have a problem. (Email support is 24×7).

Rod Bland is a Technology and SEO Consultant who owns several websites. Visit our site to learn more about how his IT Consulting services.