Channeling the Cloud

The Death of Exchange Server 2003: What Will Take Its Place?

With Microsoft's aging e-mail server set to lose extended support on April 8, organizations have a host of options -- both on-premises and in the cloud -- to migrate to.

• By Jeffrey Schwartz
• March 12, 2014

As Microsoft gets ready to pull the plug from Exchange Server 2003 next month, organizations of all sizes are scrambling to move off the aging e-mail system. Some will upgrade their existing Exchange Servers with versions released in 2010 and 2013, while others will throw in the towel and move to cloud-based e-mail services.

Exchange Server is a leading catalyst motivating many stalwarts of the traditional datacenter to rethink that stance and dip their toes into the cloud. By moving to a third-party hosting provider or migrating to Office 365 (with some opting for Google Apps), customers can lower their software acquisition costs and get out of the business of managing their e-mail systems.

A vast majority of organizations with Exchange Server 2003 are moving to a newer version on-premises, but a healthy percentage will move to a cloud service. Phil Aldrich, national Microsoft director for Dimension Data Americas, says 70 percent of his company's Exchange Server 2003 customers are planning to replace those implementations with on-premises versions of Exchange servers.

The remaining 30 percent are largely planning on moving to Office 365, Aldrich says, although many are also looking at its alternative hosted-Exchange offering -- Dimension Data offers both. Some are choosing a mix, depending on where their employees are located. Regulations governing compliance and data sovereignty play a key role in the decision to either keep all or part of an Exchange deployment on-premises or in a hosted environment in a specific country.

Over time, Aldrich believes the number of customers opting to run Exchange on-premises will decrease with the scales tipping toward running it in the cloud. "As people's Enterprise Agreements run out, they'll look seriously to an Office 365 model," he says. "It's just a good model for the client." Experts say IT decision makers in the coming years will find the high cost of managing Exchange on-premises unsustainable. Office 365 is even more compelling for those with Office 2003, which Microsoft also will stop supporting next month, and the two can be offered on a per-user monthly rate.

"We're finding customers are saving, depending on their size, 50 to 70 percent by moving to the cloud," says Mike Gold, president of Intermedia, which offers Exchange-hosting services directly and through a large network of partners. "They get the latest and greatest versions, which are a lot better in terms of security, mobility and the availability of the environment." Intermedia and other cloud services providers offering hosted Exchange services are offering a slew of add-on options, such as file storage, backup and recovery, voice services, and security.

For partners, Aldrich contends, the real money is in helping customers migrate and, in many cases, manage the cloud service once it's deployed.

More Columns by Jeffrey Schwartz:

• SharePoint's Path to the Cloud Is Not a Straight Shot
• How Microsoft Missed the Cloud Forecast Under Ballmer
• Column Archive