How hosting e-mail in the cloud can save your company money

microsoft-office-365-logoIf there is one service or application that is ready to be moved to the cloud, it’s e-mail.  E-mail is something that is accessed from all over the world, and does not require low latency and high bandwidth connections to the datacenter in order to have great performance unlike other thick client applications such as traditional ERP systems, EHR systems etc.  E-mail is usually considered a mission critical application to most businesses, as it’s their primary method of communication with employees and clients. Most businesses host this application on a single server with many points of failure including power and internet.  In addition to having many single points of failure, IT must now support this e-mail application locally, upgrade the hardware and software version of Exchange every few years, all costing you the business owner time and money.  In this article, I’d like to outline the cost savings of moving your e-mail to a cloud provider, specifically Microsoft Office 365 and how doing so will make you and your employees more efficient.  

There are many cloud providers out there that will do a great job of hosting your companies e-mail for you at a low per user cost / month in their multi-tenant environment.  For my company, Microsoft Office 365 is our go-to provider for hosting e-mail in the cloud, and here’s why.  First off, Microsoft offers it’s customers a 99.9% financially backed server uptime service level agreement. This alone is something that local IT or MSP’s normally can’t offer when hosting e-mail on-premise at your location. Second reason is pricing.  Let’s look at a 3 year cost analysis for hosting e-mail in the cloud, vs on-premise with a local server for a 25 user office:

Microsoft Office 365 Cloud:

Office 365 Enterprise P1 Plan: $4/user/month x 25 Employees = $100/month

Total 3 Year Cost: $3600.00

On-Premise:

Microsoft Exchange 2013 Standard: $699

Microsoft Exchange 2013 User Client Access License: $78/user = $1950.00

Microsoft Windows Server 2012 Standard:  $899.00

3 Year Unified SSL Security Certificate: $215.00

Total 3 Year Cost: $3763.00

The numbers over 3 years look fairly similar, however there are a few things you should keep in mind. With either solution, you are paying your IT provider to upgrade you to either the latest version of Exchange, or migrate you to Office 365.  The big difference here is, that initial cost to migrate you to the latest version is only paid once in the cloud option, whereas you are paying not only a migration cost, but the cost to purchase all the licensing again (upfront) each time a new version of Microsoft Exchange is released, usually every few years.  Hosting your e-mail in the cloud with Microsoft gives you access to the latest version of Exchange as soon as it’s released, all included in your subscription with no added costs. After year 3, your savings are upwards of $10k or more .

The third and final reason for moving e-mail to the cloud is the elasticity of the subscription pricing model.  We all hope that your business continues to grow and you continue to hire employees, however there are times when we must scale back on resources when times are tough. Cash is king in business, and having the ability to spread out costs over time instead of writing a big check at once helps small companies focus on growing their business, and not on buying and maintaining IT equipment.  Instead of purchasing a brand new server, along with all the software needed for your users upfront, the cloud gives you the flexibility of a “pay-as-you-go” model where you are only paying the monthly subscription for the amount of employees you have.  Let’s say at the end of year 1 you had to let 10 employees go.  When that happens simply do not renew your Office 365 licenses for those 10 employees, and that will reduce your monthly cost.

Office 365 has a great offering of hosted services that work nicely with Exchange including Microsoft Lync, and Microsoft Sharepoint.  Combining these applications together  make for a truly mobile and efficient workforce at a fraction of the cost of maintaining the hardware and software on-premise. At Project Leadership Associates, we help our clients make an informed decision about moving to the cloud, and review their business needs in detail before making any recommendations.  We make the process of moving to the cloud extremely painless by including the business owner in all our planning meetings, keeping you up to date as we reach every milestone in the project.

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