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Office 365 vs. Hosted Exchange: Which should you be using?

The long-term success of a business depends on making right decisions. And one of the most important decisions you’ll have to make is the cloud solution for your organization. While this sounds simple enough, it can be a daunting task, considering the large number of options that are offered.

How do you determine the right product for you?

This is a question only you can answer, and you can only really answer it once you have a clear understanding of your business requirements. And these requirements differ considerably. For example, the needs of a company developing its IT services from the ground up are separate from businesses used to hosting their email servers on-premises. Industry regulations like encryption policies, and email-retention policies also place more constraints on businesses, while your business organization might have its own share of issues to work out.

When it comes to business email hosting, most companies must choose between Hosted Exchange and Office 365. Both are great options, and the main difference between them boils down to old vs. new. But which one is better? Let’s find out below.



One of the most useful features of the cloud is that it allows users to synchronize email, documentation, and data across different devices. Businesses and employees nowadays require access to business information no matter where they are located. When a particular organization allows its employees to work on their documents at their respective workstations, connect with them via email sent from a smartphone, arrange for presentations off-site using a tablet, then it is going to develop at a very productive pace. And thanks to ActiveSync technology, this kind of synchronization is available across numerous devices.

While the majority of hosted exchanges are capable of offering this sort of synchronization capabilities to the users, Office 365 trumps them all thanks to one very specific feature -- BlackBerry support. Microsoft Office 365 is capable of lending support to the organization for BlackBerry contacts, email, and calendars directly out of the box. No extra fees or charges need to be paid. This makes Office 365 a good option for those enterprises who are behind times in upgrading their IT infrastructure.

Unfortunately, Hosted Exchange is not going to provide this level of support without charging something extra. And these fees, which are usually charged on a per-month basis, can be highly variable. This might not seem like a big issue, but the truth is a company that has even a couple dozen employees with BlackBerry devices will have to shell out extra in order to lend some extra support.

If BlackBerry support is a big necessity and your organization cannot do without it, it’s better to opt for Office 365. However, the majority of business executives and professionals have all migrated either to iOS, Android, or Windows Mobile gadgets. If that is the case with your organization, then you’re free to choose either Office 365 or Hosted Exchange, as far as active synchronization is concerned.


Hosted Exchange was built on the 2010 Microsoft Exchange platform while Microsoft’s latest Exchange-based productivity and email solution gave rise to Office 365. No updates were included in the former, while the latter, being cloud-based, automatically receives regular updates.

Each Microsoft Exchange Server Edition is soon followed up with the release of an Outlook PC version of the same build. Outlook PC acts as the front end for end users. Because of the stark differences in the user experience design of the subsequent Exchange versions, change management becomes a challenge for enterprises. However, once you move on to Hosted Exchange, you retain more control over when you accept upgrades and subsequent changes, Currently, Microsoft supports Exchange Server platform versions 2010, 2013, and 2016.

Office 365, being cloud-based, automatically receives regular updates, which makes it a little more seamless to manage.


In terms of security, there is no competition between Office 365 and Hosted Exchange: Office 365: wins hands-down. Now this does not imply that there is no security available in the different hosted exchanges. It only means that Office 365 boasts of more efficient features. For example, Office 365 is the only service that provides both FISMA (Federal Information Security Management Act) and HIPAA (Health Insurance Portability and Accountability Act) credentials to the users.

Moving beyond security credentials for U.S. companies, Office 365 includes other certifications like SSAE 16 Certified, EU Model Clauses Capable, ISA 27001 Certified, and EU Safe Harbor Compliant. Hosted Exchange options may be secure, but they don’t have all the credentials listed above.

Productivity tools

Hosted Exchange provides businesses with access to Contacts, Email, and Calendar. On the other hand, a business opting for Office 365 will enjoy the Online Essentials plan, which gives access to Contacts, Email, Calendar, OneDrive for Business, and Skype for Business. Office 365 also grants users access to online versions of the Microsoft Office software.


It is true that money should not be the main determinant when it comes to making the right decisions in business. Most of the time, the decision to spend a lesser amount, just for the sake of increasing savings, leads to inferior quality services as well as downtime that not only hampers business productivity but also leads to greater expenses in the long run. But the truth is, to some extent, pricing will affect the bottom line of your business and needs to be given the right amount of consideration. And, Hosted Exchange has a hard time competing against the prices of Office 365. The price of Office 365, for small and mid-sized enterprises with little need of personalization and customizations of their mailboxes, is less than half the cost of Hosted Exchange each month. The cost helps you understand what products are capable of satisfying your business requirements, without needing you to overpay.

And the winner is …

This makes it abundantly clear that Office 365 as a whole is a safer and more reliable solution than Hosted Exchange. When it comes to the quality of service, Office 365 makes use of an in-depth defense approach to offer businesses physical, data, and logical layers of operational best practices and security features. Moreover, Office 365 provides a company with enterprise-grade admin and user controls that ensure a more secure environment. But if Office 365 was perfect for every company, there would not have been any debate in the first place. Actually, since each company is different, they need to compare what services and features are on offer individually before they decide upon the value of each option. When an organization is able to determine which features are going to come in handy, they will easily be able to decide the product that fulfills their needs the best.