Cost Comparison PDF Print E-mail
Tuesday, 20 May 2008 18:08

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.

Exchange Costs

Total Costs of Ownership (TCO) for Exchange can be broadly broken down into two categories

Initial Costs:

  • 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

Product Costs:

Exchange requires an ANNUAL licensing purchase for every:

  • End-user
  • Server
  • Requires ANNUAL maintenance contract purchase.

Ongoing Costs:

  • 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

Company
No. of Users
Storage Limit
Monthly Cost
Setup Cost
HyperOffice
5
500 MB
$45 -
Asp One
1
500 MB
$10


10
10 GB
$125
$50
MailStreet 1
200 MB
$13


10
2 GB
$100

SherWeb
1
3 GB
$9


10
30 GB
$100

Intermedia 10-25
40 GB
$125 $125

25-50 100 GB
$295
$295

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
MailStreet
$250
5
Asp One
$250
4
HyperOffice
$275
1
Intermedia
$388
2
SherWeb
$225
3
Last Updated on Wednesday, 17 June 2009 20:14
 

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