In-house vs. Microsoft Exchange Server from Rackspace: The ROI & TCO Story

First, let’s be forthright: there’s no clear-cut rule that states whether hosting Microsoft Exchange Server® on dedicated servers or managing email systems in-house is better for your bottom line. Usually a hosted environment is less expensive, but not always. Luckily, there’s a relatively simple way to help you decide what makes sense for your business: figuring out your cost-per-mailbox.

In-house Hosting—Breaking Down the Price by Mailbox 


Start by determining your annual in-house costs-per-mailbox. The per-mailbox price can vary widely, depending on the specific configuration and the number of mailboxes hosted by the chosen configuration. That being said, according to a recent report from a leading technology research company, typical costs run between $16 and $28 per mailbox. Obviously, configurations with more mailboxes usually have a smaller per-mailbox cost.

Every business has their own unique way of managing their email systems, but here are the factors you should consider to get an accurate idea of your cost-per-mailbox:

  • Annual hardware costs—servers, firewalls, load balancers, operating systems, data center costs and power
  • Depreciation of existing hardware and costs of hardware refreshes
  • Financing of servers, storage, software, firewalls and load balancers
  • Exchange licenses
  • Maintenance and repair costs
  • Client software (Outlook) installation and maintenance
  • Storage costs—SAN, DAS or NAS
  • ActiveSync or BlackBerry Mobile Messaging—BlackBerry licenses, BlackBerry admin, BES Server, SQL
  • Staffing costs—staffing related to the design, deployment, hosting, administration and support of hardware, software, storage and mobile devices
  • End-user administration costs—staffing related user/mailbox administration

The Costs of Microsoft Exchange Server® —Dedicated from Rackspace® Hosting


Hosting a Dedicated Exchange environment at Rackspace vastly simplifies the factors that determine cost per mailbox. One big thing you’ll notice is that you’re not buying or financing depreciating hardware.

There are choices you can make that will impact your hosted configuration and overall email hosting costs:

  • Number of mailboxes you need
  • Default mailbox size you would like
  • Exchange license provided by you or by us
  • Outlook license provided by you or by us
  • BlackBerry licenses and quantities
  • Whether or not you need a High Availability (HA) configuration
  • Storage preference of DAS or SAN
  • Price/performance optimization
  • Disaster recovery and backup requirements
  • Anti-virus/Anti-spam services

Even if you can’t answer all of these questions right now, we can help you figure out an estimated cost-per-mailbox. After a couple conversations with us about hosting your Microsoft Exchange Server® solution with Rackspace, you’ll be surprised at the overall value dedicated hosted email can offer. And, if nothing else, you’ll have the facts to help you make future decisions.


Continue the conversation in the Rackspace Community.