The growth of the public cloud all over the world has given SMBs more opportunities for a better return on investment on their IT services. Organizations that manage their email service can either keep it on-premises or migrate to an online email environment.

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Since Office 365 was officially launched in June 2011, Microsoft has set a new tone for IT services for SMBs. Small businesses can now benefit in many ways from the functionalities included in one single offer. From Exchange emails to collaboration tools and Office Apps accessible from multiple devices, Microsoft Office 365 is taking over as the go-to solution for SMBs.

When considering Office 365, organizations that manage their Microsoft Exchange email system in-house are faced with an important question: should we move our email to Office 365 or keep our Exchange servers in-house?

Each option has its pros and cons. This article will guide you through some of them, so you can best decide whether Exchange on-premises or Exchange Online is the best solution for your organization.

Advantages of running Microsoft Exchange on-premises

1. You keep full control of your activities

The hardware and email platform are all yours. You decide on the configuration, the upgrades and changes, as well as the timing. The full maintenance is your responsibility, including the installation of updates regularly provided by Microsoft. You decide on the sizing of your mailboxes. You can implement as many services as you want to provide your users with: ActiveSync, Webmail, public folders, transport rules, etc.

2. You get more flexibility for your customizations

In-house Exchange servers offer more flexibility when it comes to the integration of third-party applications. As long as both the Exchange and other application servers are hosted on the same local network, it’s much easier to interconnect them. You can set email for your multifunction printers, notifications for your customer relations management applications, communication to receive faxes through email and more.

3. You control your Exchange data

Your data integrity and longevity depend on you. You decide on the backup timing for your mailbox databases and how the backups are stored or destroyed. Your data is always stored on-premises, whether it’s using online drives, backup tapes or your own remote storage.

Disadvantages of running Microsoft Exchange on-premises

1. You can lose your data

Since your data is stored in your own hardware, if a disaster occurs and you don’t have a proper Disaster Recovery Plan, you might lose your email and servers. Building a business continuity strategy can be very costly, depending on the options you choose.

2. Hardware and licence costs are high

Your initial investment is not the only cost to run Microsoft Exchange on-premises. Maintaining both the hardware and the application requires resources, and an appropriate budget. Your hardware needs to be refreshed or replaced every few years.

Technology evolves and a new version of Exchange sometimes requires different configurations than the previous one. The administrators taking care of the platform need regular training to keep up with changes in technology. These are costs you can’t necessarily control, but have to assume.

3. Security remains a major concern

You must be proactive to configure your network, systems, and Exchange platform against possible threats. You might have to hire more professionals and get support contracts with your security solution manufacturers. Security incidents do occur and they may have disastrous consequences. Whatever happens, you have to resolve problems as quickly as possible.

4. Availability

The reliability and uptime of your in-house Exchange solution absolutely depends on how much you are willing to invest in the platform. Guaranteeing a 99.99% availability or better requires a costly infrastructure.


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Advantages of Exchange Online (Office 365)

1. Get the scalability you need

Some Office 365 offers include email, calendars, and contact management. You get exactly the same basic features you have on your on-premises Exchange platform with a guaranteed service level. Each user gets 50GB of online email storage that can be synced on smartphones (including BlackBerry devices), tablets, PCs and MACs using ActiveSync. You only purchase email accounts for the number of users you have.

There is no need to overspend to guarantee for future account storage. In the same way, you can also decrease your number of licences freely from one month to another. You can set up the service for a new employee in minutes.

2. Cut out costs

Price flexibility is one of the biggest values of Office 365, because you get more than just the email service with your subscription.

First, there are different plans to choose from. Second, depending on your needs, you can either choose to have Office Online, or the Office Suite installed on your devices, or both. The Office Suite (Word, Excel, PowerPoint, etc.) can be installed on up to 5 mobile devices, 5 PCs and 5 MACs, for each licence. Third, don’t forget that you also have access to other services that you’d pay for if you installed them on-premises. A non-exhaustive list includes SharePoint Online, Skype for Business, OneDrive for Business, and Sway. Finally, you manage all your services from the same point, which makes life easier for you.

3. Reduce risk of losing your email data

As a cloud provider, Microsoft invests a lot in security so you can have peace on mind for your IT services. You can enable multifactor authentication for your accounts to harden the access to your email. Microsoft also provides a guarantee against disasters such as power outages, floods, fires, and more, so your business can still carry on, no matter what happens. Cloud providers make sure they have backups to restore data whenever it’s necessary.

4. Always up to date

With Exchange Online, you always have the latest solution for your email. You get access to all the enhancements and innovations for servers and clients as soon as they are released. Your users can quickly adopt the changes to enhance their productivity. There is no need to plan for a long upgrade, as everything happens seamlessly. Your corporate IT teams aren’t involved in the change.

Disadvantages of Exchange Online (Office 365)

1. You give up the administrative control

Because the infrastructure is set for multitenancy, you don’t have access to the Office 365 Exchange servers. You cannot configure third-party solutions that include mass mailing of Internet messages or require an installed software component on the Exchange server. You don’t get a root or administrator password for anything. Office 365 is set for the best security.

2. Migration can be a hassle

Depending on the Exchange version you’re running, the steps to complete the migration might require a lot of effort, starting with the prerequisites. Many businesses that are willing to migrate their services to Office 365 end up cancelling the project when they run against this challenge because they lack support. However, If you decide to work with an MSP, you can benefit from expert advice and get a dedicated team that can guide you through the process. This will guarantee a smooth transition and a quick adoption of Exchange Online.

3. Rolling back to an on-premises solution is uncertain

You might not know how you can integrate your data back into your organization if you want to cancel your Office 365 subscription.

If you host Exchange servers in-house, you have full control over your platform and how it evolves. With Exchange Online delivered through Office 365, you benefit from the most stable environment for your email that includes all innovations and enhanced functionalities as soon as they are released. You are free from paying for initial maintenance and upgrade costs because you pay a flat monthly fee for Office 365 email. However, you lose flexibility when it comes to the integration of third-party applications.

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Written by Sophie Furnival Marketing Communications Manager @ SherWeb

Sophie leads a team of expert marketers in charge of building SherWeb’s brand awareness. Responsible for activities such as email marketing, social media and driving organic web traffic, her role is critical to ensuring SherWeb is recognized and respected by prospects, partners, competitors and other stakeholders. Sophie has extensive experience working in journalism and corporate communications for different industries, including science, technology and the non-profit sector. When she’s not championing SherWeb’s brand, Sophie enjoys diving, cooking and watching The Office.