Nobody thinks they need their own private Post Office to send a letter.  In fact, nobody has built their own Post Office since the likes of William Penn, Alexander Hamilton, and Benjamin Franklin.

Yet many corporate managers feel they must have their own on-premise server running Microsoft Exchange to provide email and other messaging services for their users.


Based merely on distributing the base cost of an Exchange Server among fewer than 50 users it becomes instantly apparent that small companies find it all but impossible to justify the cost of having their own Exchange Server.

Every analyst who tries to arrive at the exact number of users it takes to justify the expense uses wildly different variables and arrives at just as wildly different numbers.  One hosted Exchange provider claims you need to have more than 400 users to justify purchasing your own, while another claims, verbatim, “Unless you’re managing 5,000 seats or more you should not be in the game.  The one guarantee I can give you is that you will lose money if you’re trying to build out your own infrastructure with less than 5,000 seats.”

Those who demonstrate that the price per month per user multiplied by the number of users and then by 12 produces a large number that is far more than the price of their own Exchange Server.  They often do not take into account the hidden costs of owning your own, which according to RackSpace include:

  • Annual hardware costs—servers, firewalls, load balancers, operating systems, data center costs and power
  • Depreciation of existing hardware and costs of hardware refreshes
  • Financing of servers, storage, software, firewalls and load balancers
  • Exchange licenses
  • Maintenance and repair costs
  • Client software (Outlook) installation and maintenance
  • Storage costs—SAN, DAS or NAS
  • ActiveSync or BlackBerry Mobile Messaging—BlackBerry licenses, BlackBerry admin, BES Server, SQL
  • Staffing costs—staffing related to the design, deployment, hosting, administration and support of hardware, software, storage and mobile devices
  • End-user administration costs—staffing related user/mailbox administration

Now try to do the math.



Time and experience have demonstrated that hosted service providers of any type always invest far more in data and network security to preserve the privacy of messaging and other data than most any individual company would, and they are doing so very effectively.

Also, the Verizon 2015 Data Breach Investigations Report clearly indicates that from 85 to 90% of all data threats are executed by an internal actor rather than from outside.  That has been their report every year since 2010.  The majority of the people who will most likely try to breach your email are on your premises where you want to put that Exchange Server.

So the desire for privacy of messaging data is very likely better served outside your own four walls where only 10 – 15% of the people who are trying to get at it are located!

Messaging Strategy

There are many more logistic and other pragmatic reasons why your company will prefer hosted, cloud, or on-premise email.  As with most things cloud, one size does not fit all.  If time has come for you to upgrade, improve, or otherwise change email platforms, this is a good time to consult with your CloudStrategies Advisor for help creating your most cost-effective messaging strategy.


How can we help? CloudStrategies Discover, Adopt, and Manage Great Cloud Solutions
Drop us a note on what type of Cloud Solution that you're interested in learning more about...