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Exchange Server Onsite versus Office 365

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February 20, 2017

by: Jeff Freeman, VP of Technology


We are often asked to compare the difference between installing an Exchange Server at the corporate office versus utilizing Office 365 in Microsoft’s Cloud. Exchange Server is Microsoft’s email server platform and is used for businesses to collaborate and exchange information in several ways. It is also the underlying platform for Office 365. The difference between the two is whether you want to host it in your office server or in Microsoft’s Cloud. There are several things to think about when considering which one is best for your company. We can break these down into two categories, price and features.

Microsoft Exchange Server is sold as a one-time cost licensing model. You pay for the cost of the software server license and the licenses that each user will need to access it. These are called CAL’s (Client Access Licenses). Of course, if you want to add the more robust features of Microsoft Exchange like policies to control different aspects of user behavior then you must purchase an add-on CAL for the enterprise.Microsoft Office 365

Office 365 is sold on a monthly recurring cost model. There are different packages for Office 365 that include different features. In this case, you will want to compare a package that includes a user email mailbox. Some of the other packages include the Office Suite only without a mailbox.

The cost between installing your own email server versus utilizing Office 365 is hard to compare. Most of the time it will take approximately 24 months of paying for Office 365 before you will reach the breakeven point of having your own server. That does NOT consider the following costs associated with having your own server:

  • Server Hardware & Operating System
  • Disc Space
  • Heating & Cooling
  • Power Consumption
  • Backup & Recovery
  • Professional Fees

The features of Office 365 also give you more to offer your end users.

  • 50 Gigabytes Mailbox Limit
  • Skype for Business (Private Instant Messaging & Video Calls)
  • 1 Terabyte OneDrive (Cloud shared disc storage)
  • SharePoint (Collaboration tool and Intranet Site)
  • Company Website Hosting
  • Premium Plans include up to 5 Licenses per user for the Microsoft Office Suite with free upgrades.
  • Office 365 is available even when your home office internet is down.

As you can see the features of Office 365 can motivate you to consider moving your email to the cloud. Contact Cloud Technologies to speak to an Office 365 specialist. Let us take you to the Cloud!

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