MS Exchange Local vs Hosted vs Google for 10,000 Users

MS Exchange Local vs Hosted vs Google for 10,000 Users

After looking at some comments around Exchange Hosted Services, I thought I might do a quick (and very dirty) comparison between that and Google for 10,000 users. (This is no way reflects on the three options and may not resemble your reality).

MS Exchange Hosted Services would cost US$90k/month for company with 10k email users and selecting roughly half the options available (Communicator and Hosted Archive being two). That sounds really pricey vs local in-house servers and admins? I have no specific Exchange knowledge but say 20 servers across 5 virtual hosts, plus storage and backups is roughly NZ$350-400k as a one-off cost. Plus a team of seven admins to run it @ NZ$80k pa each is a five year cost of around $2.8 million, but lets say $3.2M to round it up to include a few software licenses and some power,cooling and floor space.

Google’s offering that I compared MS against is their Premier Edition of Apps. It’s US$50 per user per year and offers the usual email, calendar, resource booking, etc much like Exchange. I was expecting a few missing features but was surprised to see BlackBerry Enterprise Server (BES) synching and user and group provisioning APIs. It integrates with LDAP and offers Single Sign-On (SSO) so most of your users won’t see too much of a change – especially if they keep on using the Outlook client. The main issue for some businesses may be the 99.9% uptime guarantee – that’s 8h 45m down time per year. I’m sure there are a few features that Exchange holds over Apps but in many situations the cost may outweigh the benefit or it’s just not needed. Using Google Apps also unties you from MS Outlook and possibly MS Office, so this option may open the door to other savings.

So over 5 years for the 10k user company we have the following options:

In-house MS Exchange with 20 VMs, storage and 7 admins = NZ$3.2M

MS Exchange Hosted Services with a mid-tier option seclection @ US$90k/month = NZ$7.4M (at today’s exch rate of 0.72)

Google Apps Premier Edition @ US$50 per user per year = NZ$3.5M

Now one stands out there and not for a particularly good reason. The MS EHS option does include Communicator and Hosted Archiving as an option but I don’t see the extra value over staying with what you have or sending it all to Google. Add to both the off-site options, the project costs of actually implementing this and your own Exchange would have to be in a bad way or have some serious pain to go either way.

What are your thoughts on this one? Are my locally run Exchange costs way off for 10k users and are there any NZ based companies of a similar size (NZ Post’s 2100 users are on the way to Google Apps) that have taken either remote option? Is Google half the service or twice the value of the MS offering?

My last thought would be – just how reliable is that internet connection of yours?

3 Replies to “MS Exchange Local vs Hosted vs Google for 10,000 Users”

  1. I’ve had this saved in my faves for sometime now and I’m glad I did as it’s a great article, thanks.

    My only addition is that cloud-based services (SaaS) such as Google Apps (and MS Exhange EH) have the glorious ability to deliver the lastest version without any ICT intervention – no business down-time and ICT internal costs. With large service additions such as the recent Google Groups release to Google Apps there should be a cost of comms/change management but there’s no explicit ICT cost.

    Thanks again for the post, most excellent.

    [Disclosure: my company, WaveAdept, is an Authorised Google Apps Re-seller 🙂

  2. My company deals with all three options although not usually with 10,000 users, in fact I would say there’s probably only a handful companies in NZ that have 10,000 users, and I doubt any of them have completely outsourced to either Google or Microsoft.

    Local Exchange costs can vary greatly depending on what infrastructure you have in place already. For example, if you’ve already invested in an enterprise-level SAN, then it’s trivial to add storage capacity for your Exchange environment. The same goes for your virtual infrastructure – if you already have a large VMware farm in place, then the costs of adding 20 virtual nodes to run Exchange would be a lot less than having to start from scratch. Another question for an onsite installation is what level of DR do you need. Most large companies would want full-failover to another data centre in a different city (usually Auckland/Wellington) but if you already have this in place, then it keeps your costs down.

    With the online options to get a better comparison, you would compare Microsoft’s Business Productivity Online Suite (BPOS) with Google Apps Premier Edition (GAPE). BPOS gives you Exchange, Sharepoint, Office Live Meeting, and Office Communicator. GAPE gives you Mail, Contacts, Calendar, Chat, Sites, Docs and Video.

    Microsoft’s BPOS would cost NZ$141,500 per month, or NZ$1,698,000 per year. This price is quoted in NZD so no need to convert from USD, see here for more details:
    Google’s Premier Edition costs US$500,000 per year, or converted to current NZD value of about NZ$715,000

    Looking at pure costs, Google’s offering is cheaper than Microsoft’s online offerings, but whether it’s cheaper than an onsite solution depends largely on your existing infrastructure.

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