Let's have a closer look at the breakdown of the costs of a local exchange server vs a hosted exchange service for an organization with 25 users. Please note that all pricing is for New Zealand in New Zealand dollars.
Hosted Exchange Costs
Setup
$100 one off per user cost to migrate all emails data to the new hosted exchange environment and setting up users new exchange email.
Monthly Cost
$23 per user per month, which includes spam protection (users can be added or removed as required)
$17 per domain per month, domain name hosting i.e.
So total first year cost for 25 users/email addresses is fixed at $9604 and then $7104 per year.
Local Exchange Server Costs
With a local hosted server the costs would hugely vary depending on whether you are going budget or purchasing high quality equipment and services. Therefore I have included a range, the reason being you can go cheap i.e. use second hand hardware, used a low skilled IT technician however these are false economies and it generally will end up costing you more in time and hassle fixing the shortcuts that were taken in the future.
Setup
A Server $4,000-$10,000
Backup hardware/software $2,000-$6,000
UPS $500-$1000 (stops your server being blown up with a power spike or power failure)
Microsoft Exchange Software & Licensing $6,100
Warranty $500-$1,000
Technician to setup $2,000-$6,000
Ongoing Costs
Backups & Restores $5,000-$10,000/year (1Hr/week either you or your staff charged at $100/hr)
SLA $500-$2,000/year
Fixed IP Address $240/year
Power $300-$400/year
Spam Protection $600-$2000/year
Domain $200/year
So total 1st year cost for a local exchange server setup will be between $22,000-$45,000 please note that does not include; technician time to perform updates, technician time to perform backups and restores when you or your staff can't do it, repair failed hardware, software upgrades or the fact that server hardware generally last between 3-5 years where you would have to go through the whole process of a new server and licensing expense again.
When you compare the costs over a 3 year period there really is no choice. To have a local server can vary wildly from $35,000-$75,000 whereby the cost of having a hosted exchange solutions for the same period will be fixed at approximately $23,812
(please note all costs are approximate, excluding GST and vary across different providers)
Dan Ballard is a Technology Writer and a IT Business Development Manager. He specializes in showing businesses and organization how to make the best use of technology.
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