In House Exchange vs Hosted Exchange Mail Services:

I think we have a bit of new math problem here. 

Okay so I spent 10 grand for a server.  But it’s a HyperV box that is running several servers, not just one.

I sure didn’t spend $15,000 for server, Exchange and blackberry licenses.  Dude, the Blackberry license is now free, and someone should be shot for not looking at SBS 2008.

There are times that hosted stuff makes sense and then there are those times that the cloud vendors are trying WAY too hard and not asking if there’s a key business app that needs an on premises mail server.

Bottom line it’s NEVER this easy of a numbers game.  Don’t be fooled by the hype.


In House Hosted
Fixed Costs
Server Hardware $10,000.00 $0.00
Server Software Licensing $5,000.00 $0.00
Exchange Enterprise Software $5,000.00 $0.00
Blackberry Server Software $5,000.00 $0.00
Consultant to Install Software $2,000.00 $0.00
Total Fixed Costs $27,000.00 $0.00
Monthly Costs
Exchange Cost per User (monthly) $0.00 $8.95
Consultant for Maintenance/Upgrades $200.00 $0.00
Total Monthly Costs over Year (Based on 10 users) $2,400.00 $1,074.00
Total for First Year $29,400.00 $1,074.00

5 Responses to In House Exchange vs Hosted Exchange Mail Services

  1. Vlad Mazek says:

    While their numbers are skewed a little (I don’t know anyone that manages a server for less than $300/mo) the in-house Exchange solution just doesn’t make sense financially.

    You know I love you Susan! 🙂

    This is why consultants are flocking to the cloud, yes if you try hard enough and you’re lucky that the business has some sort of outdated LOB or requirement to have the server in house (“We always email CAD files back and forth!!!!”) it’s hard out there to build a business the way it was back in the day.

    Bandwidth + price = hosting.


  2. Joe Raby says:

    I can’t tell if our prices are just too low, or if this is flagrantly untrue of IT pricing, and we’re just in the average.

    “Bandwidth + price = hosting”

    As Susan says, it’s never that simple.

    Sure, you could contract everything out to third parties….you know, like American manufacturing. How’s that going again?

  3. Dean says:


    If you take their $2,000 figure for “Consultant to install software” and use say $100 an hour for a fee, that comes to 20 hours. With your experience with SBS 2008 can a person install it and config it and test it with the highest quality in 20 hours ? Include setting up and configuring the hardware ( including peripherals like backup drives ) in that time.

  4. Joe Raby says:

    Are you talking about actually charging for the initial installation of SBS 2008 on the hardware?

    A customer would typically buy SBS 2008 on new hardware, pre-installed. An OEM, or even a small shop that’s building a custom box (a “system builder”) wouldn’t charge for installation, so why include that in the cost?

    20 hours is quite a bit of time, but $100/hour is a bit on the ridiculous side too.

  5. Dean says:


    I was just going by what they used as an example. They said “Consultant to install software” so I assume that they mean installing SBS 2008 from scratch. I used $100 an hour as a round figure.

    Personally, I never trusted OEM installs. They always change things from the Microsoft standards like NTFS permissions. If a machine is going in under my control it’s going to be loaded from scratch including making sure that the BIOS and all firmware are the latest versions and the BIOS settings have been checked as well as the latest Windows drivers have been downloaded before putting the install media into the drive. Then I follow my install document because there is no way that you can remember all the steps without one.