Exchange 2010 On Premises or Cloud Decision

I hope some people out there have had a situation a bit like mine I’m in the middle of making my mind up as to whether or not i should have an on premises exchange 2010 or Zimbra or move my email to the cloud in some way.
So currently we have a HQ office with exchange 2003 and about 80 users this site has 3 ESX servers clustered and attached to shared storage and run some VM's which has just started really. The company has recently bought a few other companies and now we are looking to incorporate another 100 user Exchange 2003 into our upgrade plans now the 100 user company that the company bought is dispersed over about 5 different locations most of the users are in one site but about 40 are split between different branch offices. All offices are now connected via WAN.
Ultimately what i need to do is bring all the email services in under one roof and to do that i need to make my mind up on either running an exchange 2010 environment for 200 users in my VMware platform and all the connection speed issue i may have with the WAN or do i move out to the cloud?
Knowledge of Exchange 2010 is not great but i guess i could learn and train will have a company do initial install if i decide upon internal solution. Cost comparison is quite difficult here because i don’t need hardware if i go VM so i would need service to install and license which would prob be less than 20K however cloud exchange or zimbra could be 1000 per month forever...
Hard choice just wondering if anyone else had similar experience and what they found to be good decision or bad decision.
I know not single solution for every company but just trying to draw on general views and experience.

Thanks so very much.

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Jian An LimConnect With a Mentor Solutions ArchitectCommented:
this is a subjective question and i am definitely going through the same question as well.

ultimately it is not only about the cost but the strategic. making exchange 2010 fully redundant internally like the cloud is not as cheap as you think.

but ultimately, it will depends on
1. internet connection to the cloud
2. user experience, will it be still outlook with exchange? or something like imap? (i go against imap for the experience)
3. data location, as it will sit outside your organisation, will your company accept that risk?
4. expertise, do you have the expertise in company or outsource?
5. single sign on experience?
6. any customise requirement for email? (remember cloud offering have limited service for customisation)

at the end, i cannot make a decision because i don have full picture for you.

in my case, i would like to go for office 365, but data location is my main issue as the risk is a bit high for us.
otherwise, the whole experience is great.

duffmeConnect With a Mentor Commented:
The first question you should be asking is about content and security.  Do you have any IP (Intellectual Property) issues or requirements for SOX, PCI, etc?  If you put your email in the cloud you are increasing risk.  

Secondly, how critical is access to email?  If it's in the cloud and you lose internet access or the provider has issues is this acceptable?  If you need to maintain control that can trump putting it in hosted cloud.  You might simply host your own email backend at a co-located site that you maintain, but that provides better geographical (latency, etc.) access.  

Otherwise there are solutions where general users are in the cloud and secure users are maintained on in-house email.  There are those who keep mail in-house and have the redundant system as the cloud.  Keeping these synced can be an issue depending on how you do this.  

In my experience the risk outweighs benefits for most organizations as they do not want to trust their sensitive data in someone else's hands, regardless of cost.
Jian An LimSolutions ArchitectCommented:
i agree to most of it but the risk.

with the risen of cloud computing, more and more users have put their data into the cloud, sensitive or not.
the most important is what legal position do you post if your data is not in your own country.

Those is the challenge it face at the moment.
Auric1983Connect With a Mentor Commented:
As for deploying Exchange in your VMWare environment.  Exchange 2010 fully supports being virtualized.  You just need to make sure you dedicate enough cores and memory to the VM to respond quickly.  I personally am not a fan of virtualized mail servers but it will work just fine.

Exchange 2010 On site vs. hosted - if the system is on site you maintain control over the system.  There have been numerous "cloud outages" this year and would make me rethink hosting email outside is a good idea.  That said the feature set you would get with hosted vs. on premise is identical.

I have to say that Exchange 2010 is by far the best exchange product from MS to work with.  Exchange 2000 and 2003 were solid, 2007 sucked and 2010 is awesome.  
If you do virtualize you mail servers you probably want to store the databases on dedicated datastores for better disk i/o performance.  You could also more easily cluster the mail server this way.  Just make sure you know your load.  Database servers and mail servers (and mail servers are mostly DB now) are usually some of the least likely candidates for virtualization, and they will also tend to grab all available memory up front, so dynamic allocation may be a little more tricky.  
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