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In-house or Hosted Email?

We’ve been using a free service for email. We need more security and customization, but our IT budget is limited.

When you have a few employees, the cost to deploy a full email system seems excessive. However, as you grow, managing email can become problematic from a communication, security, and functionality standpoint. Once you’ve outgrown consumer and free email services, you have two choices: manage email locally or use a hosted email service. Here are some things to consider when deciding which one is right for your growing business.

Can you afford the initial outlay to stand up an email system?

It can cost up to $60,000 in hardware, licenses, and security to deploy an on-site email system. Long term, you’ll have to account for operating costs and expenses, like software upgrades and security patches. Hardware typically needs to be replaced about every three years and that doesn’t account for building out to account for growth in between. The hosted email model provides a complete email system in a few minutes without the capital expense. Control panel administration lets you control email features and manage mailboxes. Additionally, you can scale at a moment’s notice without acquiring and deploying more hardware. A hosting provider also takes care of patching and upgrades, and can offer security capabilities beyond what an on-site deployment can deliver.

Do you have dedicated email expertise on staff?

The average salary for an Exchange administrator in New York is approximately $90,000 a year. That investment ensures your hardware and email system are well managed, but that doesn’t mean your budget can bear the expense. If your admin leaves, you could be stuck with an email system that you can’t manage until you can find a replacement. With a hosted email solution, the cost of around the clock IT labor is included in the service. That gives you a team of email experts minding all aspects of email. Because hosted email providers know the critical nature of email, they take great care to seek out experienced, credentialed, security-screened talent.

Do you have physical space for servers?

Your servers need a dedicated, secure place to run with redundant power and controlled access. If space is an issue, but you prefer to manage your own email, consider server hosting to access your own dedicated box securely maintained in a data center. Otherwise, think carefully about where you’ll keep the hardware and how you’ll safeguard it. Hosted email providers house the hardware for you in massive data centers with high-grade security. An email hosting service also includes backups and usually offers long-term archiving options.

Do you need remote access to email?

Adding remote access and mobile support via BES for BlackBerry or Active Sync into an on-site email deployment drives costs up even further. The hosted delivery method gives you the option of securely accessing email via any web browser, anywhere. You can also instantly access mobile capability without licensing and startup fees at a flat monthly rate.

How quickly could you recover from an outage?

Hackers, malware attacks, or an errant lightning bolt can hamper your ability to receive orders, respond to customers, or communicate internally—affecting productivity and your bottom line. If you manage on site, you may not have the manpower to troubleshoot and repair on the fly. Hosted providers use redundancy across data centers. If your office network goes down, your email is still business as usual online. Review a potential provider’s SLA for specifics on uptime guarantees. With the ability to focus resources on individual parts of email management, your email is constantly being monitored to catch issues before they affect your email. If an issue arises, resources are available and quickly deployed to diagnose and repair issues.

Use our calculator to compare the cost of Hosted Exchange at Rackspace to an in-house deployment for solid figures on how much you can save. For help choosing an email provider, visit our Email Provider Selection Guide for tips and a comparison worksheet.

About the Author

This is a post written and contributed by Lizetta Staplefoote.

Lizetta Staplefoote is a Rackspace Marketing Copywriter with a decade of experience writing about small business challenges for healthcare, real estate, and technology. Her passion is researching and writing about the impact of cloud computing. When she's not wordsmithing, she enjoys hanging out with her sons, exploring the Blue Ridge Mountains, and feeding her music addiction.


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