In-house Exchange for 15 users firm?

Hey guys,

What do you think about a small firm like want to have their own exchange.  I am sure they will spend way more $$ then if they would be hosted.  The reasons are:

     a.) The Newsletter Design (mass spam email).   The newsletter is being sent through an internal MS Exchange 2010 server.  The hardware we used is a 4 years old PC you had in the office. The hardware will be used is the new server purchased a couple of months ago. The new server will also run the 2 existing server. Meaning, 1 Hardware will run 3 virtual servers (Vmware essentials).
     b.) SLP (email marketing provider) does not want to use the Opt-In feature all marketing systems impose before sending newsletter. Instead, SLP would like to send the Newsletter and monitor the responses and then take actions such as, removing subscribers from DL if recipients request and if they no longer exist.
     c.) Maintain easy method to create and send Newsletter
     d.) Archive/Backup all users incoming and outgoing email addresses.
     e.) Retire 6 years old server. Parts are no longer available and if server crashes, systems can be down for a day or 2.

The Total cost of the new email system including new server:
MS Exchange Server 2010:  $1,400
VMware Essentials:              $499     [50% discount promotion]
Dell Poweredge T310:          $1,809
Labor to setup system:          $1,500
Maintenance Cost:                $ Covered in the 4 hours per week plan.  
Total Cost:                           $5,208

Do you think these are the valuable reasons to have exchange in-house for such a small firm?  All these can be hosted for way less $$.   The design proposed I think not very reliable and redundant.
Please let me know your 2cents opinions.

Thank you!!
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Unless you actually require all the features of Exchange, its just a waste of money. You also need to buy client access licenses for the users.

Just use any open source mail server. For Windows you can try hMailServer. It can use Active Directory for authentication. Instead of OWA you can use a free webmail interface such as RoundCube mail.

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I'd go for the hosted version for normal email. It doesn't rule out the possibility to send newsletters from internal servers, but for that Exchange is probably a bit overkill. For normal email/calendar/etc stuff you'd get quite a many months for $5000 and wouldn't have to care about administration.

Also the point about this not being reliable or reduntant is perfectly valid. A single server running the whole Exchange system is quite vulnerable. But that all depends on the support contracts for the hardware and the backup plans for the system. At least you'd need a separate AD machine. Exchange is nice to recover (if you can say something is nice when there are crashes) since you can just install a machine with the same name, start Exchange installation and it'll suggest reinstalling with the same options as before since all configuration is in the AD. But still, a single server is a single server...
As you have request, this is just my $0.02. Without knowing all the circumstances, it's impossible to make the best decision.

The proposed solution doesn't mention redundancy or backup or a DR plan. I'm assuming if e-mail went down due to a hardware failure (beyond a hdd or power supply, which can be redundant in the server), the users would be in a tough spot without email. If that risk is acceptable to the client, I would make sure the support plan for the system came with a 2 or 4 hour response requirement. The quoted $1,809 for the server seems very low for a 3 or 4 year 2-4 hour support contract. Also, something needs to be done for multiple backups as well as a detailed DR plan. With a hosted solution, you can get their policies on paper (and generally verified via an outside company that reviews the data center and company).

That said, a hosted solution has some security concerns - although a good hosted solution will be able to show proof that security concerns are appropriately addressed with the client's best interest in mind. Additionally, a hosted solution means down time on the hosted server's schedule, not your own. I come from higher education, which has nearly 24/7 uptime on all key services, so scheduled downtime is a bigger issue. Some businesses clock out at around 4:30 or 6:00 PM until the next morning, so any nighttime downtime is not as critical. Also, there are bandwidth concerns to take into account, but for so few users it probably isn't a show stopper. Also, some hosted providers do not provide certain features that are required in the business logic, such as the ability to archive all email to an address.

Without running the numbers myself, it's a difficult decision. However, generally an in-house Exchange solution for only a handful of users is overkill and will cost more over an expected 3-5 years of use.
Glen KnightCommented:
First question, does it have to be Exchange 2010?
Would Small Business Server 2008 with Exchange 2007 be sufficient?
This will provide your small business with additional functionality, shared folder, sharepoint, remote web workplace and Exchange (to name just the main ones)

The licensing is considerably cheaper than a full blown exchange server.

Have you considered, VMWare ESXi (which is free) or Microsoft Hyper-V Server R2 (which is also free) these are both barebones products with no cost.
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