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Hosted Exchange - Public Folder replacement? (Contacts)

In the Hosted Exchange (2007) environment I'm considering, there are no public folders.  I understand that they are being phased out - and don't really want to go with companies that still do use them to just push off the problem a year or two.

There have been a few suggestions to replace the contacts Public Folder:

1) Create a new user and share their contacts and calendar as the "public" contacts and calendar to all users.  Control permissions from that user.  This works okay except for one tiny issue that creates a big problem.  Outlook does not allow you to set a shared contact folder as an Address Book.  So when composing a message, this list will not appear as a viewable address book for adding recipients.  


2) Sharepoint - Allows for contact list to be added an address book, but it is an expensive method for getting just that one piece of functionality.  (I don't foresee using the other parts of Sharepoint - but maybe there's a case for that).


3) I've considered setting up a scheduled Powershell command, running once a day to sync the shared contacts user with the GAL.  This way, users could get the email addresses (matched with names) in the GAL - and then they can modify user notes/details through the contact share.  This is a little more complex of a setup - and I'm not sure of the GALs limits.  We have 3,500 contacts.


Anyone have opinions on the above or perhaps other solutions that can resolve our issue?  I really don't understand why Microsoft doesn't allow shared contacts to be added as Address Books - can't tell if this is an Exchange or Outlook (or both) issue.
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Neil Russell
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In my opinion, the SharePoint version is the most professional, but the most expensive, especially, if they will use SharePoint for this specific reason.

The 3rd solution can be good, 3500 is not a big number. You'll miss the "modify only own items"-like permissions. So anybody with write permissions on the "shared" contact folder will be able to modify every contact.

A forth, but even more complicated solution is to set up a special second Contact type of folder for every user's mailbox, keep their own contacts for sharing there, and syncronize with PowerShell these contact to the GAL as AD contacts. With this procedure you can also store the "owner" of the contact as a special AD atribute of the object, and with the script you can check if the person is allowed to modify a specific contact or not. You can build your own logic there.
For this solution you need the Exchange Web Service API.
Neilsr,

But for Hosted Exchange 2010 Public Folders can not be used at all.
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blueteam

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I am planning on using Microsoft's own service (eventually called Live365), which does not support Public Folders - confirmed by multiple sources, including their own support.  One provider that does support public folders is Intermedia....but they are higher priced.  The goal was to run with Microsoft directly and figure out a workaround for the shared contacts to avoid the fees for sharepoint.
Please refer to this: http://technet.microsoft.com/en-us/library/ff923272.aspx
Do you have a more athoritive source of information?

What's not available in Exchange 2010 SP1 Hosting Mode
Exchange 2010 SP1 doesn't support the following features in Hosting mode:
Exchange Management Console
Public Folders
Unified Messaging Server role
Edge Transport Server role
GalSync 2007
Active Directory Federated Services
Business-to-Business features such as cross-premises message tracking and calendar sharing
IRM
Outlook 2003 support (EnableLegacyOutlook)
Same forest upgrade from Exchange 2007
Resource forest
Parent-child domains
Discontiguous namespace
Disjoint namespace
Does the GAL have a size limit?  Somewhere I read 1000 entries, but I think that was for Exchange 2003.  

I don't know why Microsoft chooses not to support Public Folders in their own hosted solution - but for the price, I don't know if we can afford to move to other 3rd parties.  Now if I consider the cost of adding Sharepoint - maybe it's a different story.
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They are NOT Exchange 2010.
Nobody said they were.   The question does not mention 2010 in fact it states 2007.
But in your first comment you said:
"For a change Microsoft bowed to public presure and yes, 2010 supports public folders"

And I answered to that.