Hosted Exchange Email vs. Office 365: Which is Best for Your Business?

By | April 24, 2015

Office 365 vs Hosted Exchange

Over the years Microsoft Exchange became the gold standard in business email, used by large companies around the world to increase productivity, help people stay connected and manage their communications.  But, the cost, hardware requirements and need for an in-house IT team to manage Exchange meant that it was out of reach for most small businesses.

So, hosted Microsoft Exchange was born.  Managed in the cloud by companies like mindSHIFT Online, hosting enabled businesses of all sizes to take advantage of the benefits of Microsoft Exchange while eliminating the need to spend lots of money upfront on hardware and software and removing the burden of hardware management and maintenance from IT teams.

So, how does the new kid on the block, Microsoft Office 365, fit into this environment?

Hosted Exchange and Office 365, delivered by mindSHIFT Online, have their own benefits and are both great solutions for the right buyer. We will give you insight as to which mindSHIFT Online solution might be best for your business needs.

Let’s compare our Office 365 and hosted Exchange services to highlight how their individual capabilities can benefit your business.

Office 365

A key component of Office 365 from mindSHIFT Online is that it gives you access to your favorite Microsoft applications including Word, Excel and PowerPoint which can be installed on up to 5 different devices without having to pay separately for each individual application. You can create, edit and share all of your files from whatever device you choose: your laptop in the office, your desktop at home, your tablet in a restaurant, your phone at the airport or wherever you are.

Both Office 365 and hosted Exchange add Microsoft Lync and SharePoint which provide great on-demand collaboration.  But, if you want to take your work with you on the go, Office 365 also enables you to access your Office applications on the web with Office Online, build a secure social network for your employees with Microsoft Yammer as well as store and easily share files with Microsoft OneDrive.  If looking for a solution that lets you work on documents and files outside your office, then Office 365 might be a better solution.

If you’re interested in building an internal hub where employees can share ideas and information or you want to be able to create, update and work on documents together from anywhere on any device, then you will need to decide if SharePoint will be sufficient for your needs or if you would also like to use Yammer and OneDrive.  This will determine whether Office 365 or hosted Exchange would be a better choice.

Like its other software solutions, Microsoft frequently provides updates to Office 365, and they will be available to you as soon as they are released.  With Hosted Exchange there can be a longer timeframe between updates.  So, if you always want to be on the cutting edge and jump on the latest features as soon as they become available, Office 365 could be the right fit.

Office 365 also includes Active Directory Federation Services (ADFS) which provides users with a single sign on, allowing them to logon to their computer once and access secure systems and applications outside their organization without having to login every time.

Is your business required to meet certain industry or government regulations requiring a compliant email archiving solution to securely store and maintain your data?    Unfortunately, not all Office 365 plans include email archiving capabilities and are not able to meet the rigorous requirements set for compliance. You’ll want to take a look at hosted Exchange if compliant archiving is important for your business.


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Hosted Microsoft Exchange

As we already mentioned, if data privacy and information security are critical to your business and you’re required by law to secure communication and files, hosted Exchange might be for you.  You have the option to add compliant email archiving and encryption which helps remove the threat of personal data loss and helps you meet industry and government regulations such as SEC, NASD, HIPAA, Sarbanes-Oxley (SOX), and FRCP.

If you’re like many people who have an overflowing email inbox, never delete anything for fear that you’ll need it later or use your email folders as a filing cabinet for all of your attachments, hosted Exchange allows for unlimited mailbox storage.

The mindSHIFT Online hosted Exchange solution also has built in disaster recovery and message continuity. When your email is down during an outage, natural disaster or other event, message continuity gives you the ability to send and receive email so work can continue unaffected.   Hosted Exchange also integrates spam filtering and virus protection to help secure your data.

Hosted Exchange hasn’t forgotten about collaboration either.  Just like Office 365, our hosted Exchange solution has a Microsoft SharePoint site included so you can share things like documents, lists, photos, event calendars and discussion threads with colleagues wherever they may be. Microsoft Lync also helps you communicate in real time by voice, video, instant message, meetings or application sharing.  And, hosted Exchange email includes great collaboration tools like shared calendars, contacts and tasks which can be accessed via any internet-enabled computer or mobile devices.

When compared against Office 365, hosted Exchange does have some productivity and collaboration limitations. None of the Microsoft Office applications like Word, Excel and PowerPoint are included nor are Microsoft Yammer or OneDrive for Business.

The Active Directory Federation Services (ADFS) that we mentioned as a benefit to Office 365 is not available for hosted Exchange.  The need for this single sign-on is really subjective with some users not bothered by having to login more than once but it may be an important component for other users.  It’s something that you’ll have to take into consideration when determining which solution is best for you.

Beyond Features

There are a few other things to take into consideration in order to make the best decision.

  • Contracts and Commitments:
    • Questions to ask: What is the difference in commitment levels between Office 365 and hosted Exchange?
    • Options: Office 365 is a monthly subscription cost but does require a one year commitment. Hosted Exchange also allows for monthly payments, and there is no annual commitment.
  • Compatibility:
    • Questions to ask: Do your employees collaborate often when authoring and publishing documents? Would it help to ensure that all your employee’s authoring applications are compatible with the latest most current versions so that they can easily transfer documents from person to person, device to device?
    • Options: Office 365 would enable the same authoring applications for each employee on each device, allowing for constant, consistent sharing and collaboration.
  • Scalability:
    • Questions to ask:  Do you have to regularly add and delete users?  Do you have a seasonal business that requires you to significantly ramp up your number of employees for a specific period of time?
    • Options:  Both hosted Exchange and Office 365 enable you to add and remove users as needed.  However, since hosted Exchange enables you to pay as you go, you pay for only the amount of time you need the service.
  • Mobility:
    • Questions to ask:  Do you need your office to be on the go?
    • Options:  If yes, we suggest Office 365 because you get to choose how you work.  Office 365 lets you work using your favorite devices—PC or Mac, iPhone, Android or Windows Phone, iPad or Windows tablet. You decide. You’ll get the full, rich Microsoft Office experience on whichever device you choose.
  • Try Before You Buy:
    • Questions to ask:  Do you want to try out the service to see how it works before you commit?
    • Options:  We do offer a 30 day no obligation trial for hosted Exchange.  However, a mindSHIFT Online Office 365 trial is not currently available.
  • Uptime Guarantee:
    • Questions to ask:  Is an uptime guarantee or service level agreement (SLA) important in your decision making process?
    • Options:  If you’re looking strictly at the numbers, hosted Exchange betters Office 365 with an uptime guarantee of 99.999% vs. 99.9% for Office 365.  Hosted Exchange software and servers are directly managed and maintained by us with a focus on business use, and we’re committed to proving the highest SLA possible.  As Office 365 is maintained in other facilities for both businesses and consumers, the SLA for Office 365 reflects a more diverse customer base.  If time really is money for your business and every minute counts, then you’ll need to decide if your business can withstand the minimal increase in downtime.
  • Technical Support:
    • Questions to ask:  Do you have an IT person on your team to whom everyone can go with questions or issues?
    • Options: We provide all of our hosted Exchange and Office 365 customers with live 24/7/365 technical support via phone, email and live chat.
  • Number of Users:
    • Questions to ask:  Do you have more than 300 people who need a solution?
    • Options:  We have hosted Exchange and Office 365 options which can meet the needs of any size business. You can sign up and easily add users online, or, if you have more than 300 users, our cloud computing experts can talk with you to customize a solution that is specific to your needs.

For this comparison, we took a look at our mindSHIFT Online hosted Exchange Security Bundle vs. our Office 365 Business Premium Plan.

mindSHIFT Online
Hosted Exchange
Security Bundle

mindSHIFT Online
Office 365
Business Premium Plan

Microsoft Exchange email – unlimited mailbox size Microsoft Exchange email – 50GB mailbox size
Microsoft SharePoint 1GB Microsoft Office desktop apps. installed on up to 5 devices
Microsoft Lync Office for smartphones and tablets
Microsoft ActiveSync Office Online
McAfee spam filtering with disaster recovery and message continuity OneDrive for Business
Email encryption Microsoft Yammer
Compliant archiving Microsoft SharePoint
Unlimited number of users Microsoft Lync
24/7/365 live phone, email and chat support for all users 24/7/365 live phone, email and chat support for primary point of contact. Optional end user support also available.
30 day no obligation trial 1 year contract
No contract/no commitments 300 user maximum
99.999% uptime guarantee 99.9% uptime guarantee
On-premise active directory synchronization


No Matter Which Solution You Choose, It’s Much More Than Just Email.

Hopefully you see that there is really no right or wrong answer here. Either hosted Exchange or Office 365 would be an excellent choice for your business.  The solution that best fits depends on your specific business needs. Both Office 365 and hosted Exchange let you work using your favorite devices—PC or Mac, iPhone, Android or Windows Phone, iPad or Windows tablet. With Office 365 you’ll get the full, rich Microsoft Office experience included on whichever device you choose. If you already have Microsoft Office covered such as Word, Excel, PowerPoint but need a higher level of email collaboration, then hosted Exchange is more than likely a stronger choice.

Still have a few questions that you want to talk over?   You can chat with one of our cloud computing experts now.

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