Why Small & Mid Sized Companies Need an Exchange Alternative

By: Pankaj Taneja

The Need for an Exchange Alternative


The thought of modern business without email is, well, absurd. Email is axiomatic for today's companies, a necessary, (although not sufficient anymore) condition for corporate success. One of the first things a company has to do when getting off the ground, is to set up custom email.

There are certain parameters within which this email has to operate, which can be described as the standard setup at most companies, especially smaller ones (though not all). These are a Windows Operating System, Outlook/Outlook Express for desktop mail access, MS Office for file management etc.

Besides this, the current need for dynamism and flexibility has put certain new demands on company email. These are - the ability to access company mail over the internet (webmail), mobile device access, and basic integrated collaboration functionality like shared address books, calendars, shared folders for information sharing etc.

The number of wireless email users was 14 M in 2006, & expected to reach 228 M in 2010 - The Raicati Group


Microsoft, the behemoth of software, recognized this universal need of companies during early days, & created Exchange, an email messaging and basic collaboration software, which has since gone through many revisions, the most recent avatars being Exchange 2003 & 2007.

MS Exchange is basically email server software, i.e., a system through which you can set up and receive email for your company, and relay it to your employees' computers.

The basic functionalities provided by Exchange are:-

Business Email - Administrators can setup a dedicated email address for their company (@yourcompany.com), which users can receive and send from their local email client, mostly Outlook.

Protection - Considering the 90 million spam messages that go around the world every day, the widespread concern about spam is understandable. Exchange has inbuilt security which protects your systems from infiltration by viruses and spam.

Shared Contacts - Store and organize company contacts, create dedicated address books for individuals or teams which can be shared.

Shared Calendars - This is a tool which helps manage personal & group schedules. Calendars can be created for individuals, teams and departments, which can be shared.

Shared Tasks - This helps people manage projects and activities. People can maintain to-do lists of assigned tasks, personal tasks, and tasks further assigned to others.

Shared Folders - These are file folders which can be share across the company. This helps in centralized storage and distribution of company information.

Outlook Mobile & Web Access - Recognizing the greater need for flexibility and mobility, this feature is part of the more recent Exchange editions. This allows users to access their Outlook account and most of its features from the internet using a browser, and also from mobile devices.


What's the catch, you would ask. Unfortunately there is one - especially for smaller businesses. Exchange was crafted primarily for the juicier segment - big businesses, and consequently requires major implementation and ongoing maintenance, and comes with a price tag that would be back breaking for small businesses. A MS Exchange implementation entails for 15 users around $10,000 annually.

In House Servers - Exchange requires you to setup in-house servers, & all the associated hassles - physical space, uptime, redundancy, security, backup, power et al.

Software Licenses - Exchange requires users to purchase licenses on a per user basis. For example, the cost of Microsoft Small Business Server 2003 Standard Edition with 15 Client Access Licenses is approx $1500 annually.

Deployment & Maintenance - Configuring MS Exchange entails a sea of concepts & jargon much beyond a non techie. In addition the system needs dedicated administration & maintenance. This means additional costs in terms of IT time.

Incomplete Solution - Moreover, Exchange offers only a partial deal, lacking collaboration components - document management, intranet and extranet portals - that have become intrinsic to today's corporate survival, requiring customers to purchase their communications and collaborations tools piecemeal, at precious lost time and expense.

Support & Training Issues - Given its clout, Microsoft is able to demand a price for its support services, which is otherwise unheard of. As if this is already not a major disincentive for smaller firms, there have been reports of Microsoft being unable to cope with the quantum of service requests it gets for some of its solutions.?


Although it would have been true 8-10 years ago that growing companies did not have many alternatives to Exchange, the landscape is much changed now. ???

Recent times have seen a discernible movement towards the hosted, software-as-a-service (SAAS) model. Briefly, SAAS means that the solution is hosted on the service provider's servers, and provided to customers as a service over the internet.

Companies have overcome their initial skepticism, and more and more companies are embracing these solutions. This holds true not just for the messaging market, but for just about any software technology, with web based office suites, video editors, telephony solutions, operating systems and what have you. Early SAAS companies like SalesForce & HyperOffice have no little contribution in popularizing this approach. There's talk of "death of the desktop" and behemoths like Microsoft lagging in the race.


The SAAS model is known to offer some benefits which are especially suitable to smaller companies. Exchange SAAS, more commonly called "hosted Exchange", has particularly been a big hit with small companies.

A "hosted Exchange" service provider has Exchange implemented on his servers, and sublets Exchange services to customers. In addition to providing Exchange features, the "host" has done extensive development at his end, often integrating additional technologies & features into the basic solution, and provides a prepackaged, ready to use solution to customers. Some advantages of this are summarize as follows:-

Zero Setup - Firstly, the solution provider takes the bother of hosting Exchange, saving the customer the effort of purchasing, configuring and maintaining servers, and hiring specialized support staff. ?

Ready to Use - With all the hard work done, companies can get a ready made solution with all the features of Exchange fitted to their needs, plus a whole lot of extra features. These solutions are ready to use from day one, requiring little more than the user getting on an internet browser and signing up.

Security - The hosted model also scores from a security point of view. These solution providers often have security expertise and technologies not available to smallish firms.

Low Cost Commitment - Almost no upfront monetary investment is needed. The cost structure is usually a low monthly user based subscription fee. This ensures that companies pay only for what they use, and there is no obligation of carrying on with a bad solution to recover initial investment. Companies have the flexibility of opting out whenever they please.


Since the core offering of these companies is "hosted Exchange", all of Exchange's features are available to customers. That said, there is still a lot of variation in the offerings out there, since? a lot of functionalities are built around this basic offering. Some score from a user friendliness point of view, some in terms of features, while others in terms of costs. A sample set of features of a "hosted Exchange" provider are as follows:-

Dedicated business email setup, Access mail on Outlook, Mobile and Web email access , Outlook web access, Shared contacts and tasks, Shared individual & group calendars, Spam and virus protection, Wireless synchronization, Private and shared calendars, Centralized control, Disaster management & backups


As mentioned before, many of these solutions go much beyond Exchange functionality, and offer a whole tool box of features for almost the entire range of small business needs. For example, one provider has SharePoint features built into the solution and allows users to publish dedicated intranets & extranets, and allows advanced document management and sharing. Extra features like polling and forums are thrown into the mix. This saves companies the need to purchase solutions piecemeal for different needs.


Cross Platform Use - Flexibility is another hallmark of hosted Exchange solutions. Since the internet is the mode of deployment of these solutions, they are built to work in diverse environments. All you need to access them is a web browser, & you can use the entire feature set from any internet enabled device - mac, windows, desktop, laptop or handheld. This makes for a better internal as well as "outside facing" solution. Traveling teams, partners, vendors, clients just need an internet connection to be on the "network".

Communicate With other Software - Moreover, these solutions are built to communicate seamlessly with other software. These solutions can be used in tandem with popular software which are a part of every company, for example Outlook.

No Need for Updates - The hosted model also renders unnecessary the need to download and install updates & bug fixes regularly. The provider simply keeps adding upgrades, patches and new features at his own end and these are instantly available to the users of the software.


A wide range of solutions is on offer in the market. Some important criteria that need to be considered while making the selection are:-

  • ????????? Do they provide the basic Exchange feature set?

  • ????????? What kind of initial investment is involved in terms of effort and costs?

  • ????????? What are the total costs?

  • ????????? Is the solution scalable as the organization grows?

  • ????????? What kind of security do they provide?

  • ????????? Are there additional features? (relevant to needs)

  • ????????? How well are features integrated within the solution

  • ????????? Do they provide support and training


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