Email in the Cloud: hype or happening?

I was having dinner with my friend, Jack, a few months back, and our conversation somehow turned to email and the cloud. Jack was about to move his company’s 25 users from a POP mail system to Exchange and decided to follow the latest trend and sign up for a hosted mail Exchange software solution.
Jack’s story intrigued me because buzz about the cloud seems to be everywhere these days. I asked Jack why he went with a hosted email service to which he responded with some very logical reasons: ease of rollout, no onsite infrastructure, costs spread out, etc. Based on his reasoning, his organization’s situation sounded like a good candidate for cloud computing. That’s where the story began, however it took an unexpected turn and ended with a very different outcome.

Jack and I went on to talk about the approximate costs: $11 per user per month, plus $4 per user per month for spam/virus protection, plus $5 per month for Exchange options (CAL, etc.); adding up to approximately $20 per user per month. At first pass it sounded like a good deal. However, after doing the math, I wondered how it compared to an on premise version of Exchange. The hosted cloud version for 25 users at $20 per user per month, works out to $500 per month, $6,000 per year, $18,000 for a 3 year period (typical depreciation period). This number struck me as higher than expected, so I decided to compare it to an on-premise solution.

With the comparison in hand, I called Jack the other day to see how the hosted solution was working out.  I asked Jack if he compared the hosted version to the on-premise version. Surprisingly, he had already canceled the hosted version and switched to an on-premise solution not even 3 months in.  Jack’s price to install, configure and be up-and-running for an on-premise mail Exchange software solution including three Exchange servers, 3rd party consulting time, extra disk, and other fees came to a one-time, up-front cost of approximately $15,000. Interesting I thought, and not what I expected. Of course, there are other on-going, minor costs to factor in like power, etc., however the overall cost comparison surprised me.

I then asked Jack who administered his Exchange environment day-to-day, to which he replied ‘me’! Now that is very surprising. Let me stress my friend is NOT an administrator. He likes technical things, however he does not have a technical background and spends his days running a company with little extra time to do much else, let alone administer an Exchange environment.

Here is how this story ends. I asked him why he switched back to an on-premise solution from the cloud service to which he answered, “I know I can walk down the hall and see the servers that hold my data, I can access all of our company’s data directly, and I don’t have to worry about any third party provider’s response time…which combined, just makes me sleep better at night.”

The moral of this story?  Whether you view the cloud as hype or happening, you can’t afford to ignore it when selecting a group email management platform for future development and deployment.  However, you may want to ignore the hype itself and do your own research.  It is clear many companies and IT departments are trying to get a handle on the information management challenges associated with cloud computing.  And as we see in this story, you can’t always rely on the typical reasons buzzing around to ensure a fit for your organization.

Whether you are investigating going to “the cloud” or want to improve the performance of your email data storage system, Sherpa Software has solutions to help get your organization to both places. Sherpa can help migrate legacy data to a hosted mail environment or maximize the performance of your on-premise email platforms. Find out more at

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