In-house vs. Rackspace Microsoft® Dedicated Exchange: The ROI & TCO Story

by Jerry Schwartz on January 13th, 2010 | 0 comments

First, let’s be forthright: there’s no clear-cut rule that states whether hosting Microsoft Exchange on dedicated servers or managing email systems in-house is better for your bottom line. Usually a hosted environment is less expensive, but not always. Luckily, there’s a relatively simple way to help you decide what makes sense for your business: figuring out your cost-per-mailbox.

In-house Hosting—Breaking Down the Price by Mailbox
Start by determining your annual in-house costs-per-mailbox. I’ve seen a wide range of numbers in my time. Typical costs run between $16 and $28 for a box, according to a recent report from a leading technology research company. Obviously, the larger configurations usually have a smaller per-mailbox cost.

Every business has their own unique way of managing their email systems, but here are the factors you should consider to get an accurate idea of your cost-per-mailbox:

Annual hardware costs—servers, firewalls, load balancers, operating systems, data center costs and power
Depreciation of existing hardware and costs of hardware refreshes
Financing of servers, storage, software, firewalls and load balancers
Exchange licenses
Maintenance and repair costs
Client software (Outlook) installation and maintenance
Storage costs—SAN, DAS or NAS
Email archiving costs
ActiveSync or BlackBerry Mobile Messaging—BlackBerry licenses, BlackBerry admin, BES Server, SQL
Staffing costs—staffing related to the design, deployment, hosting, administration and support of hardware, software, storage and mobile devices
End-user administration costs—staffing related basic user/mailbox administration

The Costs of Microsoft® Exchange Server 2007—Dedicated from Rackspace® Hosting
Now, when you host a Dedicated Exchange environment at Rackspace there are still a few factors that play in to pricing and, ultimately, cost per mailbox. One big thing you’ll notice is that you’re not buying or financing depreciating hardware.

There are choices you can make that will impact your configuration and overall costs:

Number of mailboxes you need
Default mailbox size you would like
Exchange license provided by you or by us
Outlook license provided by you or by us
BlackBerry licenses and quantities
Whether or not you need a High Availability (HA) configuration
Storage preference of DAS or SAN
Price/performance optimization
Disaster recovery and backup requirements
Archiving services
Anti-virus/Anti-spam services

After you think through these consideration points, we can help you figure out the cost-per-mailbox. We even have a Dedicated Exchange ROI calculator that we can run the numbers through and then show you the math.

No, there are no strings attached. I just think you’ll probably be surprised when you see the numbers. And, if nothing else, you’ll have the facts to help you make future decisions.

In-house vs. Rackspace Microsoft® Dedicated Exchange: The ROI & TCO Story

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