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Office 365 vs. Hosted Exchange: Is there a right answer?

Posted by Dillon MacInnis on Mon, Jan 04, 2016


Small and medium-sized businesses are certainly not without options in regards to how they manage their documents, store their files, access word processing applications, internally communicate, and send emails. Not only can they choose to take advantage of a managed IT service provider, internal IT department, or subscription service, but there are also a variety of specialized services to choose from within these options. Furthermore, businesses are not required to limit themselves to only one, and they can choose to access a subscription service, coordinate their IT team with IT Consulting services , or use their own IT department to manage their subscription services. As an IT Managed Services Provider the question has recently been raised as to whether small and medium-sized businesses should choose Office 365 or Hosted Exchange.

Although both of these services share a similar purpose, their contrasting means, limitations, costs, conditions, and certain features have initiated a conversation about what is right for individual businesses. Hosted Exchange basically means renting an off-site sever in a secure location that will enable office processes to occur on-site. As Exchange is also a Microsoft product, Hosted Exchange means that a business can still utilize Microsoft applications and services, such as Outlook and SharePoint, which is the web application platform that grants users organized access to document management and storage software, cloud services, and various other features. Office 365, however, provides an integrated experience that essentially renders the server that is hosting the service to be irrelevant to the user. Additionally, Office 365 includes several features, such as Lync Online, which supports internal office communication through instant messaging and cloud sharing, and both web-based and traditional Microsoft Office Outlook. Office 365 also enables legal archiving capabilities and the Active Directory process management tool. Although these features are valuable and included in the Office 365 package, there are other  private software and service alternatives that have similar capabilities for businesses who wish to use a Hosted Exchange service instead.

While Office 365 guarantees countless features for a reasonable cost, Hosted Exchange services are not without their advantages. Hosted Exchange provides a personalized experience to a business and its users. When there is a problem within the service’s functionality, a business can reach out to their provider directly in order to have their concerns addressed individually. There is also the ability to get personalization from the beginning, as businesses can choose exactly what office solutions they would like and can make changes when necessary. Unfortunately, additional features are not always included as a package and can result in accumulating fees. The only way for a business to acquire access to a more customizable office-solution system than that which is offered by Hosted Exchange would be through the use of personal office servers, which is often an impractically expensive undertaking.

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There are qualities of both Office 365 and Hosted Exchange services that dominate the debate surrounding which of the two is the best option for small and medium-sized businesses:

  • Office 365 offers a generous 50GB mailbox size per user.  This is usually far larger than most hosting providers.  In addition, if you elect the Office365 Plan 2 or E3 package, each user will have an unlimited email archive.  
  • Hosted Exchange usually limits the size of email boxes. The limits are set by the person administrating the Exchange Server, but can be set to as high as needed.
  • Office 365 includes more security certifications and compliances than any Hosted Exchange service
  • With Hosted Exchange, security features can often be added at a cost to the business. In terms of practical security,
  • Hosted Exchange allows users to know exactly where their data is being stored. This does not mean, however, these locations are more secure.
  • There is No third party hosting company that can claim to match the resources, investment and level of expertise of Microsoft Office365.  

While both services offer multi-device integration,

Office 365 includes BlackBerry support, which is less easily acquired through a Hosted Exchange provider. Bear in mind that Microsoft designed developed, and distributed the Office 365 Software.  There are many providers that have hosted these products successfully, but they are not the developers of the products they host.  Additionally, Office 365 has an uptime guarantee of 99.9% versus the average Hosted Exchange provider’s uptime of 99.999%, which may ultimately be a negligible difference.

Nonetheless, Office 365 will standardly run a business about 1/2 the cost of a Hosted Exchange Service.

When choosing between Office 365 and Hosted Exchange, there are countless factors that a small or medium-sized business needs to recognize. As these businesses often face more limited resources, a restricted budget may lead them towards the Office 365 option. Personalized features and services, however, do not lack value. Ultimately, it is a business’s unique priorities that need to be evaluated and exercised in order to determine the best option for itself. As mentioned before, there is a gray area that can facilitate the best of both worlds. For those who would like to take advantage of Office 365 without sacrificing personalization entirely, a managed IT services provider will help organize subscriptions and troubleshoot concerns. Although working directly with Microsoft means utilizing a reputable service, expertise can be acquired outside of the internal network. A business’s taste is important, but the means through which they access their services may determine their ultimate satisfaction.

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Tags: Microsoft, IT Services, Office 365

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