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Windows 2012 (File & Print) + Windows 2012 (Exchange 2013) OR (Windows 2012 Essentials) + Office 365

Hello,

We have a Windows 2003 SBS whose hardware has reached end of life.  I'm currently testing to see which is the better option for the small [20 user] network.

Customer uses Exchange for email.  To adhere to Microsoft's recommended setup, we don't want to install Exchange on the same machine that will run Active Directory services.  

I've tested Office 365 and have integrated Windows 2012 Essentials with the Office 365 account.  Apart from some management tasks that can be done from a single location, I'm not seeing a huge benefit from integrating Essentials with Office 365.  Am I missing any other extravagant feature?  For a small network it would be management heavy to simply create users via Microsoft's site.

Besides the startup cost of 2 servers why would I not want to simply go with Windows AD + Windows w/ Exchange, and avoid monthly recurring costs?

Any input would be greatly appreciated.

Regards,
Real-Timer
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realtimer
Asked:
realtimer
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Cliff GaliherCommented:
The essentials integration is exactly intended to do what you observed. It simplifies regular management tasks. Is it a huge benefit? Depends on who does regular user creation/management.  Password sync is one such benefit that *many* users appreciate as they have fewer passwords to manage. Setting up password syncing otherwise really requires two servers as dirsync on a DC is not a good idea (for the same reasons Exchange on a DC is not a good idea.)  So whether that is enough of a benefit for you?  Only you would know that.

As far as the second, again, it is personal preference and tastes. For some, a predictable monthly cost is better than a large up front expenditure. Exchange 2013 is *not* a cheap product and, unlike SBS, you no longer get a small business discount. Add in Windows CALs and Exchange CALs and you have a pretty significant up-front cost. Whereas with O365 and 25 users or less, Essentials requires *zero* CALs as long as no other servers are in play. All your users are covered by Essentials, so no Exchange (obvioulsy) but also no windows CALs. That can be significant cost savings.

A second consideration is maintenance. Patching Exchange is not trivial and does require both planning and downtime. Part of the selling point of any cloud service is the reduced IT management cost. You don't have to test a patch. Install the patch. Track security threats to know whether a patch is "high priority" or can be put off. For an in-house IT Pro who makes an average of $75k/year, or for a shop that outsources their IT expenditure to an MSP at an average of $100/hr, those minutes add up.

Are there benefits to on-premises? Of course. Tighter management, better data control, avoidance of some restrictions that cloud services require (like mailbox size) and...while some businesses prefer a predictable monthly cost, others don't like a monthly cost at all.

So ultimately, personal preference and what aligns with business wants and needs. It isn't as cut and dry as some anti (or pro) cloud people make it sound though. There really is a dark science to figuring out true ROI with either solution.

-Cliff
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Dragon911Commented:
I'm gonna have to agree with Cliff- for 25 users Exchange is pretty expensive.

If you have to go with two servers. Check out Server 2012 Standard and you can run two hyper-v guests off of it. One instance Exchange the other File print and DC.

You may even set the host machine up as a DC in a small environment- just for redundancy.
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Cliff GaliherCommented:
Running hyper-v with other roles on the host is not recommended. Installing ADDS on the host would fall in that category and would also negate the 1+2 licensing benefits.
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realtimerAuthor Commented:
Cliff - thank you for the incredibly detailed and informative response.  Addresseed my concerns perfectly!!

Regards,
Real-Timer.
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