In House Exchange vs 365 - whats your experience & advice?

Hi folks,

We currently use SBS2011 and are feeling its limits now, so its time to move to a proper domain with a separate DC, Exchange, DNS etc. We have a single domain, 80 users, and up until now SBS has been a filling "meal deal" so to speak.

One of our sister organisations got 365 a few months ago and I really like many aspects of it, from administration to end user experience. They did get it with a huge discount being not-for-profit which made it a no brainer, but they haven't experienced any downtime, and I love not worrying about backups, or any on site Exchange issues that may arise.

So I'm facing a dilemma - do I stay in house and move from Exchange 2010 to 2013, or while the opportunity is here do I just move to 365? What has your experience been in a similar scenario? In house we'll have to get 80 new CALs for £60-£70 each for the new server, and although Office 2010 will be here for a while to come, eventually we'll have to start shelling out £300 or so for whatever version of Office is around in 4-5 years. That's almost £5000 just for CALs plus Exch licence, which is pretty close to a years worth of 365. And eventually when we do upgrade Office, the costs will start to pile up.

I welcome your advice and any tips you can give.

Evren KaraibrahimgilAsked:
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JohnBusiness Consultant (Owner)Commented:
80 users means 1 in-house Exchange Support person (maybe 1+) to support in-house Exchange. I have NO clients any more with in-house Exchange. This is a good service to purchase and then use existing support resources for more needed activities. Outsource your email and be happy.
AmitIT ArchitectCommented:
It depend on your type of business. I have see financial organization prefer to keep server on-premises. Secondly, how much time and effort you can spend on running on-premises servers.

On-premises server is having your own luxury car. Obviously, you might need to pay premium price for your own server, however you have complete freedom on your own server. Easy to customize, as per your requirement. Yes, there are admin overheads, however if you know how to manage it, it is better to go with on-premises servers.

When it comes to Office 365 or cloud. You are totally dependent on your vendor, customization is almost NIL, you need to pay for every extra feature nothing is free. Privacy is big concern for cloud solution till date. However, other best part is, you don't have any admin overhead of patching servers or maintaining hardware's etc.

My final suggestion, if you can afford on-premises server, go for on-premises.
Will SzymkowskiSenior Solution ArchitectCommented:
From my perspective it is in your best interest to go to Exchange Online (exchange only) or O365 (complete suite Exchange, Sharepoint, Lync etc) when you have less than 30 users in your organization. The cost of Exchange (on-prem) is not worth the money for less then 30 users. Sure you get all of the features however are they going to be put to use? 30 users is not a HARD stop if you had 50 or 60 users you could also migrate.

With Exchange Online ofrO365 you do have to pay for extra features however the basic package will get you up and running and you can add features as needed. Using Office 365 you also need to take in to consideration WAN connectivity as well to ensure peak performance.

Now that is for a small business perspective.

For Larger business where you have something like 300-1000 (or more) mailboxes O365 starts to become expensive (as it is a per-month cost) and typically larger companies do not have any issues spending the money upfront for Exchange on-prem.

Privacy is a big deal as well and if you are a large firm with sensitivy information most companies like to know where there data resides. This also means that you will need to implement a backup/recovery procedure as well. This is something that Exchange Online or O365 ensure is that there are multiple copies of your data somewhere else.

So really it comes down to the following...
- cost
- time to manage/implement exchange
- feature set
- flexibility

I have done small migrations to O365 without and issues. I have heard of large businesses 2000+ mailboxes try to to go Exchange Online and they basically brought it back on-prem after a year as they did not like the flexibility and overall experience.

Exchange Online for smaller businesses (I would say below 100 users total)
Exchange on-prem for large businesses (200+)

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Jon DoeCommented:
As per the recent outages on Exchange online, I would stay away from O365 till they get their stuff right. Having said that, Microsoft is pushing everyone to the cloud so they make all the money providing managed services while eventually, no jobs remain for Exchange or Lync admin/engineers apart from those who work at Microsoft. I would say, if you're not worried about response time for issues, the ease and ability to walk up to your in house admin to speak with for reports, quick resolutions and an actual ETA that you could monitor and translate to your CIO who is going crazy because users don't have email go for O365. You will not get immediate resolutions nor the capacity to be proactive and  be a part of fixing the problem. My own domain with one mailbox is on 0365 because I don't really care about them reading my emails or having a 12hr downtime. It's just $5 a month for one hosted email. My personal choice if I operated a business would be an on premise Exchange organization in a Hybrid deployment.
JohnBusiness Consultant (Owner)Commented:
There are other Hosted Exchange houses beside Microsoft and it is still good economics overall to outsource unless you think a large in-house expenditure on resources is good for you. Remember that such resources can be used for other things.
Jon DoeCommented:
John, just curious. How do you put an exchange engineer to 'use at other things' when the email services have been taken off his hands ? Instead of a team of 10 configuring, monitoring and administering, you'd need probably just one for tweaking the snazzy admin panel ;)
JohnBusiness Consultant (Owner)Commented:
Myself and my colleague do consulting work of all kinds (technology) for small businesses. There is always something to do. Work never stops.
Jon DoeCommented:
Most workers in IT around the world are employees, not consultants. They probably in the majority are unsuited for its uncertainties and inconsistency in terms of a guaranteed paycheck when it's payday. Besides, when a person has been doing Exchange for the better part of his career, he would not have much of a future when all email services go to Google and Microsoft, run by their own staff. Well, one could  try learn to be a propeller-head :)
JohnBusiness Consultant (Owner)Commented:
The question is as much a business management question as a technology question. Freed up resources (money) do not have to go back into IT. The money saved could go anywhere.
Jon DoeCommented:
Yes. The businesses who go to office 365 or outsource their work, care for the bottom line, money. The place I work at has outsourced everything. Exchange, mobility, network, active directory, DC operations and business application development as well. They're taking a  beating but do not mind the anomalies and lack of skill causing problems when they're saving a few millions every year. Many IT workers got displaced and this will continue when businesses don't care about quality but the quantity of $$ as 'resources'.
Evren KaraibrahimgilAuthor Commented:

Thanks for all your responses and advice, it's good to see the varying opinions.

In my case I'm the only IT person within the organisation. I'm the ICT manager, and with 80 total users, only 30 of which are in the office at  any one given time, we certainly wouldnt need another IT person. I also cover another sister company who have even less staff.

With one person around and a small/medium sized infrastructure, the split between in-house/365 seems  40/60 to me right now.

We only have two hosts that are in vsphere HA config (Dell R620s, 100G mem each, good spec processors) and they handle the 9 VMs we have pretty well.
When we split SBS to a separate domain, if and have a DC and Exchange server & stay in house, the server will need replacing sooner. If we go 365 thats Exchange out the window so SBS will just turn ino a DC poss two DCs that run DHCP, DNS etc, so I should get another two years at least from the hardware.

As for downtime, our sister company has had 365 for about 4 months now, and they've had no issues, but again they have 44 users on there.
Jon DoeCommented:
Hi Evren. With the information you provided and your low number of users, I'd go with Exchange online. 250 users and under would be a good boundary in my book to take business email to the cloud. You also get EOP for dessert !!

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