Exchange Online Plan 1 VS. On-Premise Exchange 2013

Hi Folks,

I am IT Manager for company of 55. Am upgrading our company server (physical server and the 2008 SBS OS to 2012R2) and can't decide on what to do about Exchange.

Option 1: Purchase Exchange 2013 and the CALs use for say next 7 to 10 years.
Option 2: Subscribe to Exchange Online Plan 1 (or Plan 2) and pay monthly per user fees from here to eternity... lol

PS. We are not interested in Office 365, strictly Exchange.

Any one out there have any advise for me?

Thanks all,
shood4012IT ManagerAsked:
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Cliff GaliherCommented:
There is still an anti-cloud sentiment amongst many I.T. pros, as it threatens their business model, so you'll probably see some of that in the replies here. But given your situation, I'd personally go Exchange Online.

Exchange 2016 is right around the corner. It is in preview. So buying into Exchange 2013 at this point is buying into planned obsolescence. You won't get 10 years from 2013 at this point. Not with Microsoft's product lifecycle, and even 7 would be pushing it.

2016 is pretty much a 2-exchange server minimum solution now. Microsoft is building Exchange for large enterprises, not for mid-sized businesses, and certainly not for small business. Add in the patch management of Exchange (and their current poor track record of pulling "bad" patches far too often) and Online just makes more sense from a management perspective.

I have nothing against exchange on-prem at all. But unless you are a large business (aka 500+ seats) or have very specific compliance needs that Online cannot meet *and* have the budget for a robust deployment, it is just no longer viable for most smaller organizations.

That's my opinion given your seat count and desired 7-10 year lifecycle.
Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
We've always thought hosted was a fantastic solution, and just pay cheap monthly fees for users, we were sold on it, and "sold it" to many clients....

All We can say, is the many clients, that we "sold" Hosted Exchange solutions with Microsoft, stating if Microsoft cannot manage your Exchange correctly, and give you good resilience, nobody can, tried with Microsoft, and have no returned to managing their own in house solutions, and the reason, was the unexpected downtime, with the Hosted Solutions, and Microsoft could not really give a reason to the outages, other than refunding monthly fees, and stating this was a commodity service, with no real SLA, and if they wanted an SLA solution, it would cost $100,000 compares to low monthly user fees.

Clients thought a monthly refund of fees, was disgusting.... for lack of email, and access to email.

Our clients, were terribly upset, when they went without email for between 1-3 days, of lost and no email.

We no longer offer these services to our clients. (Client bases between 5,10 - 5000).

They know host their own solutions, because they prefer to manage their own IT fate, and maintain control!
shood4012IT ManagerAuthor Commented:
Cliff what an excellent answer. Makes good sense if in-house would need to re-purchase Exchange every 7 to 10 years due to life-cycle. Online no need too do that and always stay current. My owners are very guarded with company information, and hate thought of email in Cloud and I understand their concerns but I don't feel concerned with the security part of that... hope I'm right.

Do you know anything on email online backup\restore? I once had a user that for crazy reason called me one day and said she deleted her "entire" Inbox.. and.. her Deleted Items folder. Hard to believe but true. Luckily I had a series of backed-up PST files and I was able to restore. This was only time in 15 years I uncounted such an issue. I guess my point is that with On-Premise I can backup any way I see fit. Total and absolute control.

Thoughts on online back-ups anyone is it good enough for a scenario like I described?

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Cliff GaliherCommented:
I haven't seen a three-day outage since BPOS era. And Office 365 (and thusly Exchange Online) is definitely not BPOS. Not architecturally and not policy-wise. And it does have an SLA. Just so the facts are out there.
shood4012IT ManagerAuthor Commented:
Andrew.. Yikes! That is scary.I could live with say 30 minute outage once or twice a year but definitely no more. Would expect 99.9% or better guaranteed up-time.
Cliff GaliherCommented:
Microsoft actually has an entire website dedicated to concerns such as privacy. It covers compliance issues such as HIPAA, and is very useful for higher-ups who have concerns about data in the cloud.

As for backup, Microsoft has redundancy at the datacenter level, so "backups" don't really exist, but even if a meteor hits a datacenter, your data is redundantly stored elsewhere, so you won't lose data in that way.  As far as users deleting information (intentionally/maliciously or not), you can set up policies for data retention and archiving, so you could undelete or retrieve the data. It isn't so much about backups as it is having the right security policies in place.  Moving to the cloud definitely does mean rethinking how you do things....
Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
Check the Terms and Conditions, for the SLA and Availabilities, the same with Windows Azure, and the recent Amazon AWS outage which affected many big companies!

Everybody thought high availability, and were surprised, with outages for 8+ hours or more. Checked T&Cs and found - tough!

(and twice in a week now with AWS!).

This image has been around the Internet, over the past couple of days, with Skype Outage on Monday, AWS down on Monday

shood4012IT ManagerAuthor Commented:
Cliff I have learned a lot here thanks to you. Online is the way to go. I intend to pay for assistance with my setup from a consulting company I have trust in and I will ask about these policies for data retention and archiving. So, mind made up, Cloud for email is a go as I was definitely leaning in that direction anyways.  I am also hoping to upgrade "power users" from Office 2007 to latest version (2016) and definitely plan to purchase Volume Licensing there and use for several years. I am not sold on Office 365 as my "document cloud" will always be in-house, we are engineering company and have large AutoCad files anyhow..

Thanks again, all the best!
Cliff GaliherCommented:
Skype is a consumer service. It is comparing apples to oranges.  AWS still isn't Exchange Online or Office 365.

Yes, with Office 365, outages can and do occur. And yes, the SLA is financially backed, so if they miss it, that's how they "make it right."  But that's true with *any* agreement usually. If you build a house and the contractor says he'll be done by a specific date and misses that date, what do you do...say you'll never hire another contractor?!?  I know in my consulting business, I have an SLA for ticket turn-around time. But if every client called at once, me and my techs would be swamped and we'd miss that SLA. So like any SLA, it is backed with money. We miss the 4 hour mark, you pay less. We don't respond in 8 hours, you pay even less. We miss it by 24 hours? You'll get that ticket for free.

Microsoft's SLA starts at 99.9%, so they have every reason to try and hit that. While the cost per user is low, if they are having an outage, that's thousands upon thousands of users, and that cost adds up quickly.  Here is Microsoft's SLA. In writing. Not anecdotal. So it isn't just "we're down? Tough luck" to the customer. The customer will get money back.  That's a big deal.
Cliff GaliherCommented:
As for documents in the cloud, I feel the same way. Given the cost though, you *may* want to look at the O365 business plans. The premium plan may be right up your alley.  You get the hosted email you want, but also get the on-prem office apps so you'll be right at 2016 but also always be up-to-date. They work just fine with an on-prem file server. And customers *love*  Lync...sorry...Skype for Business. That is an unsung game-changer.  It'd at least be worth a look. You don't have to use the OneDrive or SharePoint parts at all. But since they are bundled, the pricing is still competitive compared to just Exchange Online and a bunch of standalone Office 2016 licenses.

If you skip Office every few versions, standalone licenses are still cheaper. But if you like knowing all users are on the latest and greatest (particularly helpful for Outlook to take advantage of new Exchange features) and maximum document compatibility, Office subscriptions are the way to go. I even pay for one for my home because it is so convenient.
Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
Sorry Cliff, we've been there at the coal face, with angry Customers, and Microsoft could not give a flying monkey! and we told Microsoft to stuff it, were were not going to be taking flak for Microsoft's cock-up.

Microsoft state Azure is a commodity service, and do not use it, if your Ecommerce Website is Mission Critical, and if you want major money if the service is down! - it's not the service for you, speak to Microsoft for better superior hosting!

Yes, Customer's get a monthly refund of what the paid Microsoft, but none of our clients thought it was worth, what the business lost in lost email for 1-3 days.

But that's because it's cheap like the budgie, anyway they all voted with, cancelling and moving back to On-Premise.

The best solution is Hybrid Cloud, nobody should have ALL your services!

Move from On-Premise to Cloud, and back again!

Steve, tread carefully, with The Cloud!
shood4012IT ManagerAuthor Commented:
Did see this article in a search I just made:

If this happened I would take intense heat for it. That said, it was a year back so MS likely learned from it..

I think longest outage I had (hosting email in-house) was maybe couple hours here and there over 7 years. We don't have generator backup so if long power outage am screwed,.. but that said, bosses ok with that.

I guess "no system" is ever 100% up. Tell you one thing though I have couple web sites with GoDaddy (our registrar) and not a single issue in many,, many years.
Cliff GaliherCommented:
Still apples to oranges. Office 365 (and Exchange Online) is not Azure. Nor is it hosted in Azure. Saying that Azure is a commodity services has *nothing* to do with Exchange Online. As I said in my very first post, there are I.T. Pros that are anti-cloud. I get that. And people are entitled to their own opinions. But misinformation and mis-stating facts are another thing, so I'm stating those facts. Exchange Online does have an SLA. Outages are rare. And there is an active incentive by Microsoft to avoid them, as well as a track record to see how well they do.
Andrew Hancock (VMware vExpert / EE MVE^2)VMware and Virtualization ConsultantCommented:
Host in the Cloud with Exchange, and take that risk with Microsoft, I'm in favour of cloud platforms, but have bad experience of Microsoft's Exchange solutions, and so have my clients.

and we did not think it was worth the referral fee, or kick back that companies get! e.g. your commission.

I did not say there was no SLA, and there is no mis-information here, but you have to make a choice, if a refund of what you pay on a monthly basis for your Exchange Service, is all you get back, if you have an outage, is worth your 1-3 days of missing email - that's fine!

My clients did not think it was!

Check the small print, check the SLA, check the Terms and Conditions, check what entitlement your company is due, should the SLA breach, or the service be unavailable.

If you are happy with all that, then fine, it's the Cloud product for you.

A client with 68 users, $544 a month, 1 day email outage and unavailable, and Microsoft said, they were sorry, and as a good will refunded a months $544!

Is a $544 refund adequate for this failure, and no access to email for 1 day ?

We will have to agree to disagree!
Jeff GloverSr. Systems AdministratorCommented:
It has been interesting reading the "debate" between a pro and anti Office 365 IT Pro. (Exchange online is part of Office 365 which is hosted on Azure. But true, Azure is sold as a separate overpriced service). My take is simple. I work for someone who hold the purse strings so I have to justify the expense. compare carefully.
If you go with on premise, you have to pay for the server, the OS license, the OS CALs (if you go per server) The Exchange License and the Exchange CAL. You also should  have either an Edge or some type of appliance handling inbound mail. And, you need to pay for the Certificate.
Another thing to think about is whether or not to get SA with it. If, in a couple of years, someone wants you to upgrade to 2016 and you do not have SA, you have to buy another whole license. The difference between a license and a license with SA is stark so make sure you plan carefully.
For Office 365, you have to take into account the number of users and plan cost per month. If you go exchange only, do you want to set it up to do ADFS so you get single signon? You said you are upgrading from SBS, are you going to Server 2012 R2 essentials or just Server 2012R2? For Office, you might compare Office 365 Proplus  to buying volume licenses (cost wise). this way, you users get the lastest office or one back and can install on 5 devices (not including mobile versions).
  For Hybrid, I am not sure 55 users are worth the added cost of having an internal server.
  For Deleted Items, you can set Office 365 Exchange to keep deleted items for 30 days. If the user does not notice they deleted their items for that long.. Oh well.
  Lastly, for SLA, sadly Andrew is correct. Although Microsoft maintains a 99%+ SLA, you have to consider what that is. They consider all customers and downtime in the SLA so it is pretty hard to get below 99.5 %. They do refund but.... IF you have exchange on premise, and your internet goes down, so does you ability to send and receive external email. No solution is perfect.

So in all, compare the costs. You may find Office 365 to be more cost effective in the long run.

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