SAAS or On-Premise E-mail: Which is Best?

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No application has succeeded in superseding e-mail as the killer app of modern business. While few people think of e-mail as being a business-enabling tool, few people would want to run their business without persistent access to digital messages from employees, contractors, suppliers, partners and—most of all—customers.

Microsoft Exchange has long held the dominant title in the e-mail server and application market. Businesses from small shops to large enterprises rely upon Exchange or similar server-based applications to efficiently deliver messages. But the advent of software-as-a-service, services software licensing agreements and the rise of cloud-based delivery systems is making service-based e-mail and collaboration alternatives more viable. Even Microsoft has launched its own Exchange services.

For solution providers, Exchange services—or e-mail as a service—presents a particularly thorny problem. Which SAAS e-mail model is best and how do you make money selling a service that is prepackaged and delivered by someone else? What are the after-market, value-add opportunities? And which will provide the best value to customers and the most profit?

To answer these questions, Channel Insider applied a common small-business implementation scenario to three different e-mail and collaboration packages—hosted, hybrid and premise-based solutions. For the hosted solution, we chose to look at Microsoft’s Exchange Hosted Services (EHS). For the hybrid solution, we checked out CentralPointe Managed Network Services. For the premise solution, we went with Microsoft Small Business Server 2008.

To properly compare the various products, we created a level playing field. We chose to look at each solution and rate how it would work for a small business consisting of 10 employees. That business would run the normal complement of applications, access the Internet and support the occasional remote worker. We also chose to look at the costs over a three-year period, which tends to be a normal refresh cycle for a small business network and assumed that the business already has broadband access and Windows PCs.

Each of those choices has pros and cons for both solution providers and their customers. The trick is to identify the solution that’s the best fit for a particular business and that may consist of a multitude of factors, including line-of-business applications, number of employees, satellite offices, remote workers, storage needs and office suites.