Third Party Hosted Exchange (like Rackspace and InterMedia) compared to Office 365

Here is the pickle that hosted exchange providers find themselves in: They are using Exchange 2010 or 2013 that is limited to updates and add ons that Microsoft rolls out. Each major version of messaging has been around 3 years… Exchange 2007, 2010, 2013. While these hosted providers provide a nice interface for you to manage accounts and settings, ultimately they are using the same version of Exchange as you would on premises.

Let’s first talk about exactly what Microsoft’s Office 365 and all the features you get with it.

Office 365 is Exchange email services, Skype for business (Lync), SharePoint, OneDrive storage, “Office Online” (Word, Excel, PowerPoint, OneNote), Yammer, and a few more.

Wow, that’s a mouthful…. and all these services are very seamlessly integrated together.

What exactly is it and how that differs from Exchange 2013 on premises?

Office 365 Exchange Online contains all the features that you would expect from Exchange messaging system. While mailboxes are limited to 50GB (that’s huge), the user gets a second mailbox called an “online archive” mailbox. This mailbox is unlimited. So why two? Technically, the first mailbox is cached to the OST file on the workstation, whereas the online archive mailbox is not cached. BTW, you should always run Outlook in cache mode, not online mode.

Exchange Online is a version of Exchange that is beyond Exchange 2013. It offers more functionality and is constantly being updated. Major revisions come out every quarter. So that’s every 3 months rather than 3 years as for traditional Exchange. Some of the added features and benefits of Exchange Online include

  • End to end encryption for sending email. This negates the need to install a third party applicance such as Zixmail. Office 365 has built in portal for your recipients to access your customized portal to retrieve their encrypted message. No need for outlook plugins. Works with Webmail.
  • Users are allowed to create groups and invite people to them. This allows for end users to collaborate with people that share a common interest; maybe a bid proposal, maybe a new product development. The groups also show on the left hand side of the webmail interface and display all mail sent / received to that group. More can be found here:
  • Two factor authentication. This is more of a feature of Office 365 itself, and it allows for a more secure authentication method to your mail.
  • In place hold. This is better than Journaling. With Journaling you only get a copy of the message, with in place hold, there is information about where the message is. Was it deleted? Was it forwarded? Was it placed in a folder. Yes, Exchange Online supports traditional Journaling, but in place hold is much better.
  • Exchange Online Protection, or EOP. This is the rich and fully featured anti-spam, anti-malware, anti-virus protection for incoming and outgoing mail.
  • Data Loss Prevention, or DLP. Outgoing mail and attachments can be scanned for things like Social Security Numbers that you may not want sent to external recipients. This can work in conjunction with end to end email encryption.
  • Integration with all the other components of Office 365, such as sharing documents using OneDrive rather than normal attachments.


Microsoft has some various license plans for Office 365. Currently they offer E1, E3, and E4.

E1 contains all the bells and whistles and costs $8.00 per user.

  • Exchange email services, Skype for business (Lync), SharePoint, OneDrive storage, “Office Online” (Word, Excel, PowerPoint, OneNote), Yammer, and a few more.
  • OneDrive – Unlimited Storage (used to be 1 TB) for each user
  • Exchange mailboxes – 50 GB mailbox and an unlimited online archive mailbox for each user

E3 has all the features of E1 plus it includes Office Desktop 2013 for each user and costs $20.00 per user.

  • Each user can install Office Desktop (Word, Excel, PowerPoint, OneNote, Access) on up to 5 devices. So for an additional $12 dollars over E1, the user can install office on their desktop, their laptop, and their home pc.
  • Included is the recently released Office for iPad, Android tablet, and mobile devices. You can install this version on up to 5 phones and 5 tablets, 10 in all.

Third party hosted Exchange providers can’t complete when you look at all the features and the cost involved.


Author: Mike

owner of blog

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