Costs need to be seen in a broad perspective, taking the total cost of ownership in account. In addition to initial and ongoing product costs this includes set up costs, costs of maintenance, costs of training, & cost of support.
In addition it makes sense to calculate costs for different expected future scenarios. This would include expected number of users and memory usage. Products which look very similar at the face of it cost wise, may lead to markedly different costs and team size and usage grows.
Lastly, costs need to be considered in light of the features offered, rather than in isolation.
Total Costs of Ownership (TCO) for Exchange can be broadly broken down into two categories
- Operating System Software
- License & Subscription Costs
- Email client(s)
- Spam and Virus control software and hardware
- Real time back up software and hardware
- Server hardware
- Software/Hardware required for redundancy, system uptime and data integrity
- Load balancing, security, monitoring and connectivity software/hardware
- Labor costs associated with system integration & configuration
Exchange requires an ANNUAL licensing purchase for every:
- Requires ANNUAL maintenance contract purchase.
- Software upgrades
- IT infrastructure, software and hardware maintenance costs
- Operating costs associated with system uptime, data backup and integrity
- User support and training costs
- Hardware upgrades
An estimate of annual Exchange costs for different scenarios is provided below. Also corresponding prices of a hosted Exchange solution are also provided, as a contrast.
| ||Annual Costs in US $ |
| Number of Users |
|5 ||15 ||45 |
| Subscription and Licenses |
|557 || 1357 || 4625 |
| Implementation Consulting || 1500 || 2500 || 3500 |
| IT Infrastructure (1 Server Computer with appropriate processing, RAM, redundancy, power backup, backup tape) || 2700 || 3500 || 5800 |
| Anti Virus |
| 400 || 700 || 1700 |
| Annual Maintenance Costs |
| 1200 || 2400 || 3600 |
| IT Personnel (1 Administrator 25, 20, 30% of his time respectively at 50,000 annually) || 7500 || 10000 || 15000 |
| Total Exchange Costs for 1 year |
| $13857 || $20457 || $34225 |
| HyperOffice Costs |
| $405 || $1350 || $3100 |
SAAS Exchange Alternative Costs
Near Zero Initial Costs - In comparison, hosted Exchange alternatives offer the benefit of almost completely doing away with “Initial costs”.
User/Space based Monthly Fees - The fee structure is a monthly fee based on number of users and storage space. And if a company want to upgrade there is usually an extra per-user and per-GB fees. This greatly enhances the predictability of the costs because there are almost no other costs involved.
No Support or Training Costs - Most of the better hosting companies provide free live support and customer training. This is in stark contrast to Exchange which requires purchase of an annual service contract for every user.
The Choice Between Exchange Alternatives
As emphasized earlier, even when making a decision between Exchange alternatives, it makes sense to take a total cost approach. Costs need to be analyzed in light of the feature set, security, support, flexibility & user friendliness. It’s also important to be wary of “hidden” costs, costs that will certainly not be bold and flashing on the site. Some possible “hidden” costs could be:
- Extra costs for live support
- Extra costs for mobile access
- Costs for training
- Costs for extra storage
Also, it’s important to be aware of the possible growth path your company, and corresponding resource needs. Costs need to be projected for this expected growth path.
Package Comparison of Various Alternatives
|No. of Users |
|Storage Limit |
|Monthly Cost |
|Setup Cost |
|500 MB |
|$45 ||- |
|Asp One |
|500 MB ||$10 |
|10 GB |
|MailStreet ||1 |
|200 MB |
|2 GB |
|3 GB |
|30 GB |
|Intermedia ||10-25 |
|40 GB |
|$125 ||$125 |
|25-50 ||100 GB |
|50+ ||200 GB |
|$575 ||$575 |
A cost comparison of these companies for a hypothetical scenario - 25 users, 5 GB storage space is provided below
|Company ||Monthly Costs for 25 Users, 5 GB ||Features Ranking |
|Asp One |