Byron Baker Design, LLC offers hosted Microsoft Exchange 2010. This article covers how hosted Microsoft Exchange can greatly reduce your IT costs vs. on-premises solutions.

Overview

Email is an absolute necessity in today’s business environment. Take the following data performed by an Osterman Research survey as an example:

• An Osterman Research survey conducted in September 2009 found that 81% of email users regularly check their work-related email from home on weekdays, 78% do on weekends and 60% do so on vacation. The survey also found that despite the growth of alternative communication tools, 45% report that over the past six to twelve months their use of email is increasing.
• A May 2009 Osterman Research survey found that 97% of email users consider it to be important or extremely important in doing their work. By contrast, only 86% of users felt this strongly about the telephone, while 45% felt this strongly about instant messaging capabilities.
• Osterman Research estimates that the worldwide installed base for Microsoft Exchange is 160 million users, making it the leading business-grade messaging system in use in terms of total number of seats.

Clearly, email is absolutely critical to users and the organizations that deploy it, and it is becoming more so over time. Byron Baker Design, LLC wants you to take full advantage of the cost savings provided by our hosted Microsoft Exchange 2010 lineup.

The Bottom Line

A growing number of organizations are finding that the way to accomplish this is through the use of Microsoft Exchange as a hosted service, a model in which a remote third party provider manages all backend services for a flat monthly per user fee. The advantages of this approach for organizations that want to realize the benefits of Exchange are that uptime of the Exchange infrastructure can be very high and the cost of managing Exchange can be reduced significantly – typically more than 50% compared to on-premises management, as shown in the following table. Further, the use of a hosted Exchange service allows an in-house IT staff to be deployed to other projects that will provide more value to the organization as a whole. Byron Baker Design, LLC offers hosted Microsoft Exchange 2010, and we want your organization to discover how hosted Exchange can save you serious money.

Microsoft Exchange Server is the leading business-grade messaging system employed in North America and is currently used by 160 million people worldwide and growing. Exchange offers a number of capabilities, including email, calendaring, task management, address lists, and access to shared document repositories, and other functions. Additionally, Exchange is fully compatible with iPhone, Android, and Blackberry mobile devices. While Exchange was originally introduced in June 1996, and has been upgraded several times since to include additional and enhanced features, the current version is Exchange 2010 which released in November 2009.

Enter Hosted Exchange

Hosted Exchange has been offered for several years by a large and growing number of providers around the world, and there are presently around 150 providers of hosted Exchange services worldwide. As of late 2009, there are roughly 10 million users of hosted Exchange worldwide, up from just 1.5 million seats in mid-2007.

Who Is The Ideal Candidate For Hosted Exchange?

There is a perception that hosted Exchange is intended only for small businesses, while on-premise Exchange is better suited to mid-sized and large organizations. While this has been the conventional wisdom for some time, and while smaller organizations can realize the most significant per-seat savings from the use of hosted Exchange, larger organizations are realizing the benefits of migrating to a hosted Exchange model. For example, GlaxoSmithKline migrated 100,000 users to hosted Exchange in March 2009, and many more are following in their footsteps.

Benefits for IT

What Benefits Can You Expect?

Why should your organization consider migrating to hosted Exchange? There are a number of important reasons to consider doing so that are focused on direct costs, opportunity costs, security, and other benefits as discussed in the following paragraphs.

Lower Costs

Many decision makers believe that an internally managed Exchange deployment is less expensive to deploy and operate than hosted Exchange. While in some cases that perception is accurate, very often it is not. Recent studies by Osterman Research have modeled that an on-premise, 100-seat Exchange deployment costs nearly $40 per seat per month over a three-year system lifetime, while a 1,000-seat deployment costs just over $24 per seat per month. Given that hosted Exchange offerings are priced substantially less than this, the direct cost savings from using hosted Exchange are substantial. It is also important to note that leading providers of hosted Exchange include the licensing costs as part of their service, further reducing the cost of hosted compared to on-premise Exchange.

More Predictable Costs

A hosted Exchange deployment provides more predictable costs than on-premise deployments, because the cost per seat is fixed over the lifetime of the contract with the hosting provider. This predictability of costs manifests itself in two important ways:

• Unforeseen problems can create additional costs for an on-premise deployment, including natural disasters, power outages, moves to new facilities and other events that can add to the cost of managing on-premise Exchange in a somewhat unpredictable manner.
• An organization that continually adds users will, at some point, reach the maximum number of users that its infrastructure will support and will then have to add servers and other infrastructure to support new users. This creates a step function in the total cost of ownership for an Exchange environment can drive up the cost of Exchange management dramatically.

Reduced Opportunity Costs

Among the more important issues that any organization should consider is that of the opportunity cost of IT staff members or, in smaller organizations, individuals who are charged with maintaining on-premise systems. Most decision makers understand that finding and retaining qualified IT staff is not particularly easy. As a result, in-house IT staff members should be used in a manner that allows them to provide maximum benefit to their employer, while also giving them a satisfying work experience that will motivate them not to go elsewhere. Using hosted Exchange frees IT staff members from the requirement to constantly monitor the servers to ensure continuous uptime, freeing them for work that is not only more interesting to them, but also more compelling for the business.

With hosted Exchange, IT staff can be deployed on projects that offer more competitive value to the organization and can also result in greater IT job satisfaction. For example, if an IT staff member can manage a messaging capability very well, he or she provides some level of value to the organization. However, if the same staff member spent the same amount of time implementing new CRM capabilities that could convert a higher proportion of prospects into customers, it is very likely that much greater value could be realized from the same level of effort. The solution is simple, hosted Exchange allows your IT staff more time to apply to services that provide a greater return, while reducing work related stress and possible overtime.

Access To Exchange Expertise

Although Exchange is an easy system for users to employ, it is not a simple system to manage internally. It requires expertise in a number of areas, particularly when deploying a new version of the system, it requires expertise in each of the several server roles that comprise the Exchange platform, and it requires expertise in various other technologies that are integral to the Exchange ecosystem. The cost to develop this expertise can be high and, for smaller organizations, often prohibitive. In contrast, the use of a hosted Exchange provider can offer access to well-trained technical support staff that are available on a 24×7 basis that can typically resolve problems quickly and with minimum expertise from their customers.

The service aspect of hosted Exchange should not be overlooked when considering a provider of the service. Because few companies operate on an 8-to-5, Monday through Friday schedule, it is just as critical to have access to Exchange expertise at 11:00pm on a Saturday night as it is during normal business hours. This allows users to have their issues resolved in a timely manner without the cost and burden of maintaining in-house staff to manage a help desk, etc. In short, a specialist will virtually always offer better service and support when resolving Exchange-related problems.

Robust Business Continuity And Data Backup

One of the more compelling benefits of hosted Exchange is the fact that a third party is managing the entire backend infrastructure, thereby minimizing the impact of major and minor services outages and the ensuing loss of email that can impact any business. For example, a hurricane or tornado can knock on-premise systems out for days or even weeks, while less serious problems like power outages or storms can bring down messaging capabilities for hours or even a few days. While these events can also impact providers of hosted Exchange services, leading providers will back up their customers’ email, allowing uninterrupted receipt of email for customers until they can come back online. This is something that a non-technical staff member or senior executive can do.

Further, in the event that a customer’s facilities are made unavailable for any length of time, employees can still access their hosted Exchange accounts from anywhere using a Web browser, a mobile device or a copy of Outlook or Entourage on their home computer.

Rapid Deployment And Scaling

One of the chief benefits of hosted Exchange is the speed with which email services can be deployed. For example, deploying hosted Exchange typically requires little more than the modification of an MX record and possibly a change in the configuration of locale mail clients. Adding new users to an existing hosted Exchange deployment normally requires just some simple modifications in a Web-based administration tool. This makes it easy to add or eliminate small numbers of users, or even entire business operations,which is particularly important when integrating merged or acquired companies into an Exchange infrastructure.

Deployment Flexibility

A hosted Exchange capability allows organizations to be more flexible in the way that they deploy email to their employees. For example, a company may opt to manage Exchange in-house for its corporate headquarters, but provide hosted Exchange to each of its field offices that do not have an in-house IT staff. This allows the organization to provide highly available messaging services that provide a consistent user experience across the entire organization, but at much lower cost than if the IT staff was used to manage the satellite offices.

Relatively Painless Migration To New Exchange Versions

Migrating from one version of Exchange to another is just that – a migration, not an upgrade. Because Exchange does not allow an in-place upgrade to a new version, the cost of migration can be very high and even prohibitive for smaller organizations. Using a hosted Exchange provider, on the other hand, minimizes or even eliminates the cost of migration, since some providers will migrate their customers to a new version at no charge. Not only does this minimize the IT pain and the time required to migrate, not to mention the potential for downtime in the system, but it also dramatically reduces the overall cost of Exchange management over the long term.

Minimizing The Impact On The Internal Network

Another important benefit of hosted Exchange is that much of the network traffic that would normally take place with an on-premise deployment of Exchange is transferred to the hosting provider. For example, a hosted Exchange provider that also offers antivirus and anti-spam filtering will eliminate 75% or more of the email that would normally come into the network as spam, only to be quarantined and eventually discarded by end users. This saves significantly on both bandwidth and storage, costs that are growing exponentially and unpredictably in smaller organizations.

Robust Physical Security

Virtually all leading hosted Exchange providers operate very secure physical facilities that include video surveillance capabilities, multiple employee access points using multi factor authentication, tracking and monitoring tools and other capabilities that protect their customers’ data from being compromised. In most cases, the security provided by hosted Exchange providers exceeds the security that their customers could afford to deploy.

Measures, such as SAS 70 audits or WebTrust certification, can provide an extra level of assurance for customers. SAS 70 Type II, for example, is a set of professional auditing standards that assesses the internal controls that a provider uses, as well as the auditor’s opinion on the effectiveness of these controls.

The Ability To Focus On Core Business Processes

The use of hosted Exchange allows an organization to focus more on its core business processes rather than devoting resources to managing its Exchange infrastructure. While many IT decision makers believe that managing messaging capabilities is part of their core competency, that is really not the case in most organizations. Letting a hosted Exchange provider manage key messaging capabilities is most often a better use of IT staff members’ time, as discussed above.

The Ability To Deploy A Hybrid Solution

Many organizations will want to maintain at least some part of their Exchange infrastructure in-house. The use of a hosted Exchange provider allows this sort of hybrid solution. For example a corporate headquarters with thousands of users could have Exchange deployed in-house, while remote offices that do not have dedicated IT staff or specialized Exchange expertise could use a hosted solution. This permits all users in the company to have the same experience with Outlook or Entourage and with their mobile devices, while at the same time driving down the cost and complexity of managing Exchange. Another variant of the hybrid approach can be to offer hosted Exchange for some users and a less feature-rich email offering for other users whose needs are not as sophisticated. For example, an organization could deploy hosted Exchange for office workers while deploying a mail-only, non-Exchange solution for workers behind retail counter or on a factory floor.

Benefits for End Users

While IT can benefit significantly from a hosted Exchange deployment, so can end users. Among the many user benefits associated with the use of hosted Exchange are those discussed below.

A Variety Of Access Options

A hosted Exchange account can be accessed via Microsoft Outlook on Windows, Microsoft Entourage on the Mac, and from any leading Web browser, including Apple Safari. This permits users to access their email, calendar, tasks, address lists, Exchange public folders and other content and data sources from virtually any desktop, laptop, netbook or other platform. In addition, an Exchange account can also be accessed from any POP or IMAP client, including Yahoo!’s Zimbra Desktop.

Further, Microsoft recently introduced Entourage Web Services Edition, allowing Entourage users to access all of the features available in Exchange. Previous versions of Entourage permitted access only to the email and calendar functions of Exchange.

Windows And Mac Support

While Apple Mail, the mail client that comes with Mac OS X, has allowed users to access Exchange for many years as a POP or IMAP client, the new version of OS X introduced in August 2009 – Snow Leopard –provides full support for Exchange. Exchange support is also built into iCal, the default Mac calendaring application; and Address Book, all of which come standard on a Mac. While lacking some of the features of Entourage, Mail, iCal and Address Book provide robust and native functionality for hosted Exchange users.

Mobile Access

In addition to a variety of desktop and browser-based platforms, a hosted Exchange account can also be accessed using Windows Mobile, which is currently supported by the majority of mid-sized and large organizations; as well as BlackBerry devices and iPhones, among other platforms. This is a critical issue, since a large and growing number of email users consider their mobile platform to be a critical component of their email access – for some users, it is their primary email platform after hours.

Also in the context of mobility, for organizations that employ BlackBerry devices a hosted solution can provide further cost savings, since it eliminates the need to manage a BlackBerry Enterprise Server infrastructure on-premise.

Synchronization Across All Platforms

One of the key benefits of hosted Exchange is that users who create content in Exchange will see it automatically synchronize across all of their access devices. For example:

• A user can create an appointment in Microsoft Outlook on their desktop and it will appear very shortly thereafter on their Windows Mobile device.
• An email can be created using Outlook Web Access on a laptop and then appear in the Sent Items folder in Outlook on their desktop at home.

Support For “Big M” Mobility

Mobility in the context of being able to access email, calendars, etc. on mobile devices is important. However, “Big M” mobility – the ability for individuals to work from any location on any device – is becoming more important as fewer workers have a permanent location assigned for their work. For example, a growing proportion of organizations allow employees to work from home and come into the office only when necessary, thus providing significant savings on facilities’ leasing costs, power, HVAC and taxes.

Hosted Exchange is a key enabler of this capability because it allows workers to have access to their email, calendars, address lists, task management tools, etc. regardless of where they might be working – be it from home, a hotel room or a client’s conference room. This can further add to the cost savings provided by a hosted Exchange deployment far beyond the IT-related savings that it provides.

Comparing the Cost of Hosted vs. On-Premise Exchange

As noted earlier, hosted Exchange can significantly reduce the per-seat cost of an Exchange environment. As shown in the following three tables for organizations of 10, 100, and 1,000 users, the cost of hosted Exchange is significantly lower than for an on premise deployment of Exchange.

Substantial Savings, Even For Large Organizations

An examination of the tables above reveals that a 100-seat deployment of Exchange will result in greater cost savings compared to its 1,000-seat counterpart. Specifically, hosted Exchange will result in a 64% cost savings compared to on-premises Exchange for 100 seats, and a 55% reduction in the cost of ownership for a 1,000-seat organization.

It is also important to note that much of the cost savings for hosted Exchange comes from the significant IT labor cost savings available when using a hosted model. For example, as shown in the tables above, the labor component for 100 seats represents 70% of the cost of ownership for an on-premises Exchange deployment; for 1,000 seats, labor represents 58% of the cost of ownership. Please feel free to contact Byron Baker Design about how we can help your business save substantial amounts in delivering a hosted Microsoft Exchange solution.