Is a Hosted or Dedicated Exchange Service the Best Fit for My Business?

Many customers have realized that setting up, maintaining, and managing an in-house email solution is very painful and time-consuming. Rackspace® Hosting, however, can take away all of the effort around network uptime, power and hardware management. Customers have a variety of email offerings from Rackspace which to choose, which begs the question: which email solution is the right fit for me? It’s probably best to break down our offerings into multi-tenant (shared) solutions and single-tenant (dedicated) solutions.

If you want a multi-tenant environment, Rackspace gives you two great options: Hosted Exchange and Rackspace® Email. For an email solution on your own dedicated servers, Rackspace offers Dedicated Exchange.

Conveniently, we also offer hybrid email solutions for businesses that have different types of users with unique requirements. These hybrid solutions include:

  • Hosted Exchange + Rackspace Email;
  • Dedicated Exchange + Rackspace Email + Hosted Exchange; or
  • Dedicated Exchange + Hosted Exchange.

One of the most common questions I get asked is, “I have 250 mailboxes. Which email solution is the best fit for me?” The answer to this question is always the same: it depends. The number of mailboxes is not the only factor that defines the solution. More importantly, it’s the email requirements which define the best solution, not solely the number of mailboxes.

How Do You Know Which Exchange Solution is Right for You?

Here are some questions to consider:

1. Number of mailboxes?

The quantity of mailboxes doesn’t necessarily determine the email solution. While the assumption may be that larger businesses go with Dedicated Exchange and smaller businesses choose a multi-tenant (hosted) solution, many smaller businesses with higher customization needs will also choose Dedicated Exchange (unless cost-per-mailbox drives their decision). It is also becoming more and more common for larger organizations to choose a Hosted Exchange solution that will remove email server management from the long list of IT responsibilities. Again, it isn’t solely the number of mailboxes that determines a single- or multi-tenant solution.

2. Does your email solution require a high level of customization?

If the answer is yes, a dedicated solution may be the right choice. Dedicated Exchange allows you to customize settings and policies such as mailbox size, message size limit, deleted item and deleted mailbox retention, infrastructure security, email filtering rules and backup.

If the answer is no, a multi-tenant solution may be the right choice for you. Hosted Exchange provides mailbox management through a single, user-friendly control panel and still allows customization of domains, mailboxes, mailbox sizes, quarantine rules, aliases, resource mailboxes and many other items. Infrastructure needs such as selecting a firewall, designing system redundancy and scheduling system backup are not required.

3. Do you need to control your security settings?

Some customers sleep better knowing that they are the only customer on a server. While security for Rackspace’s multi-tenant email solutions is very strong, if you require the ability to control security policies or a have desired level of separation from other customer data you may consider a dedicated email solution.

4. Do you want to integrate with server-side applications?

Integration with server-side applications often requires a dedicated email infrastructure. For example, applications like Microsoft® Dynamics or servers like Microsoft® Office Communications Server or Cisco® Unity require a very deep level of system access that can only be attained with Dedicated Exchange.

5. What is your desired level of control?

If you prefer to define your timeline for upgrades or service pack installation (e.g. Microsoft Exchange Server 2007 to Microsoft Exchange Server 2010) you may want to opt for a dedicated solution.

6. How important is a single sign-on (aka Active Directory integration)?

Active Directory synchronization is available with both Rackspace Hosted and Dedicated Exchange offerings allowing an easier onboarding process and simplifying changes made to user’s mailboxes. This is ideal for businesses who don’t want to worry about users having to remember multiple usernames and passwords, Single Sign-on (SSO) is also available with dedicated email servers, while same sign-on is offered with hosted email servers.

7. Do you have a significant amount of email traffic that is generated from approved websites and sent via SMTP relay?

If you have lots of email traffic coming from various company/marketing websites or portals, you can set up SMTP relay on a Dedicated Exchange configuration. The anti-spam controls in a multi-tenant environment prevent SMTP relaying but can be sent via Rackspace MailGun.

8. Do you have governmental or company compliance needs to filter email content?

Some companies need to make sure their email systems comply with a variety of regulations. If so, they’ll need the Transport Rules/Content Filtering that is only available through Dedicated Exchange.

9. Do you have custom Disaster Recovery needs?

Do you need to customize your email DR with respect to Recover Point Objective (RPO, or the amount of data you can “afford” to lose) and Recovery Time Objective (RTO, or how long you can experience downtime)? If so, Dedicated Exchange is the best fit. If a predetermined Disaster Recovery option better suits your needs, then Hosted Exchange is your best option. Data can easily be recovered within 30 days and users can even access deleted mail themselves within 14 days.

10. Are you on a budget or need to know exactly what to expect on your bill each month?

With a multi-tenant option, you only purchase the services you need and scale as necessary. Using a hybrid email approach, you can also combine Hosted Exchange mailboxes with Rackspace Email mailboxes to gain even larger cost savings.


Rackspace has a broad suite of email solutions; choosing a multi-tenant or single-tenant solution is best determined by what your needs are. We’re happy to help you determine the solution that will best fit your business requirements.


Continue the conversation in the Rackspace Community.