Introduction to Exchange Online – Uncovering BPOS (Part 1)

If you would like to read the other parts in this article series please go to:


As some of you probably recall, back in September 2007, Microsoft laid out the next phase in its strategy for online services, offering a road map for new offerings that synthesize client, server and services software for people and businesses. They mentioned that these offerings would combine elements of client-based programs with software that runs large servers and new services delivered over the Internet (aka cloud-based services or SaaS). As can be read in the press release, Microsoft talked about two key families of service offerings: “Live” and “Online”.

“Live” services are designed primarily for individuals, business end-users and virtual work groups. Live offerings span entertainment, communication and productivity. These services emphasize ease of use, simplicity of access and flexibility, and are ideally suited for situations where people either do not have access to professional technical expertise or do not require high levels of system management.

“Online” services are for organizations with more advanced IT needs where power and flexibility are critical. Online services from Microsoft give businesses the ability to control access to data, manage users, apply business and compliance policy, and meet high availability standards while providing performance, scalability, enhanced security, management features and service-level capabilities to support mission-critical applications and systems. Microsoft is providing business customers with the flexibility to choose between traditional on-premise implementations, services hosted by Microsoft partners and now Online services that reside in Microsoft’s datacenters.

Amongst the “Live” offerings, Microsoft mentioned Microsoft Exchange Labs, which is a new research and development program for testing next-generation messaging and unified communications capabilities in high-scale environments. Amongst the “Online” offerings, they mentioned Microsoft Exchange Online, which is a hosted enterprise messaging solution based on Microsoft Exchange Server 2007 that helps give your business the protection, access and operational efficiency your IT staff needs. The Online services were intended for businesses with more than 5,000 users.

Later on (more precisely in March 2008), from the annual Microsoft Office SharePoint Conference, Bill Gates, chairman of Microsoft Corp., announced that the company would offer Microsoft Online Services to businesses of all sizes. This announcement marked a significant step for Microsoft towards expanding its software plus services strategy.

So where are we today? Well, today the Microsoft Exchange Online service is available as a Standard and Dedicated offering. The Standard offering is for customers who want rapid service adoption and a standardized administrative console. The Dedicated offering is for customers with more than 5,000 employees who are interested in having a dedicated architecture. Bear in mind though as of this writing, the Exchange Online service is only offered to businesses based in the US. You should expect similar offerings in Europe and Asia in 2009.

Regarding the Exchange Live offerings which by the way are based on E14 (next generation of Exchange Server), it is currently only available to educational institutions that enroll with Microsoft Live@edu as well as Microsoft full time employees (FTEs) plus their families and friends (I’m lucky to have a couple of domains hosted at Exchange Labs and it has been an interesting journey so far. I will provide more details about the program when I am allowed to do so).

Although you can not enroll in the Exchange Labs program, you can read a lot more about the program here.

What this articles series will cover

In this article series, I will specifically explain what Microsoft Business Productivity Online Standard Suite and Exchange Online is all about. I will talk about why this service may be interesting to your business. I will also explain how you sign up for the service as well as how you add your domain to Exchange Online. Furthermore, I’ll show you step by step how to configure coexistence between your on-premise Exchange messaging infrastructure and Exchange Online. Finally I’ll cover the migration tools that will help you migrate your Exchange users, groups and contacts to Exchange Online.

What is Exchange Online?

Exchange Online is a service part of the Microsoft Online (MSOL) based Microsoft Business Productivity Online Standard Suite (BPOS). BPOS is a set of messaging and collaboration solutions hosted in state of the art datacenters by Microsoft. It consists of Exchange Online (Exchange Server 2007), SharePoint Online (Microsoft Office SharePoint Server 2007), Office Live Meeting, and Office Communications Server (Office Communications Server 2007) as shown in Figure 1.

Services included in the Business Productivity Online Suite
Figure 1: Services included in the Business Productivity Online Suite

The goal with BPOS is to give your business streamlined communication with high availability, comprehensive security, and simplified IT management. The diagram shown in Figure 2 (taken from the Microsoft Online Services web site) below does a good job of describing how BPOS works.

Diagram of the Microsoft Online Services (MSOL)
Figure 2: Diagram of the Microsoft Online Services (MSOL)

As already mentioned Exchange Online is hosted in state of the art datacenters by Microsoft. The service is based on Exchange Server 2007. Just like a traditional on-premise Exchange 2007 environment, it provides improved e-mail security, “From-anywhere” access to e-mail for all employees that require it, and finally enhanced operational efficiency for your IT staff. But what is interesting is that Exchange Online uses the knowledge of Microsoft products as well as best practices developed in relationships with customers and partners. Last but not least, the service takes advantage of Microsoft’s global infrastructure which delivers a world-class, mission-critical service.

World-Class Infrastructure

With Exchange Online, you not only take advantage of a world-class infrastructure consisting of redundant datacenters, you also don’t need to worry about performing time consuming routine IT management tasks such as installation of new servers, provisioning, ongoing maintenance, patches, updates, and upgrades to new versions of Exchange every other year.

For Inter-org (Internet mail to and from the Internet), Exchange Online takes advantage of Exchange Hosted Services. Like the rest of the BPOS services Windows Live ID is used for validation purposes. Hosted Messaging and Collaboration (HMC), Microsoft Provisioning System (MPS) is used for provisioning. Finally, Forefront for Exchange Server is used to protect intra-org e-mail that is e-mail sent between Exchange Online users.

In addition to the above, the BPOS backend infrastructure use is based on Microsoft System Center Operations Manager, Windows Server Update Services (WSUS), System Center Data Protection Manager, KeyNote, Audit Collection Services (ACS), Agentless Exception Monitoring (AEM), Common Information Model (CIM), and Smarts.

World-Class Datacenters

Microsoft have and are still investing a huge amount of money (over 2.3 billion dollars over the coming years) into their overall datacenter strategy for Online Services including BPOS. Currently there are 13 global datacenters that use 70 megawatts of power. By the end of 2009 Microsoft expect to have 20 datacenters using over 180 megawatts of power. The relative sizes of these datacenters will be 9-10 football fields, and they will contain enough wire to wrap around the earth several times.

The datacenters are not only large; they are also carrier-class datacenters with state of the art equipment. They have been built with the highest reliability possible in mind. Each datacenter has multiple diesel-based generators and dual power feeds directly from the utility company. In addition, they have battery backup, which are designed so there is uninterrupted power between the utility and the generators.

Finally there is dual power going to each data rack, one coming from the first power feed and the other from the second power feed.

Currently BPOS is offered out of North America, with the primary (active) data center located in Virginia and the backup (passive) data center (which is a full mirror of the primary data center) located in Washington State. In a near future they will also be offered out of Europe and Asia.

World-Class Security

In order to deliver world-class security for the data centers, motion sensors has been deployed. The datacenters have 24×7 secured access (dedicated personnel) and biometric controlled access systems. Finally all datacenters have video camera surveillance and security breach alarms.

In regards to the logical level there are 9 layers of security in each datacenter. These are:

  • Authentication to data
  • Separate data networks
  • Virus scanning
  • Application-level counter-measures
  • Application authentication
  • System-level security
  • Intrusion detection system
  • Firewalls
  • Filtering routers

World-Class Data Transport

In regards to data transport all data is sent over a secured network that is all data is encrypted using either TLS or SSL. Local as well as geo-redundancy exist for all data hosted in any of the BPOS services. Finally, all data is scanned by multiple layers of antivirus and spam filtering.

World-Class Redundancy

All servers have dual power supplies, dual network interfaces and full lights-out management capabilities. All storage systems are based on RAID 1 and 5 depending on the read/write pattern of the application. Backup is performed using a disk-to-disk-to-disk backup model based on Microsoft Data Protection Manager (DPM). In addition, the networks have full failover capabilities and N+1 throughout the network stack.

World-Class Operations

All operations practices are based on MOF/ITIL and all security procedures are ISO17799 certified.

World-Class Monitoring

All monitoring is performed using Microsoft System Center Operations Manager. To provide further insight a custom management pack has been developed for BPOS.

World-Class Support

All BPOS services has 24/7 phone and electronic support. BPOS has a dedicated support organization with deep service knowledge and are tightly aligned with the operations and development organizations which results in faster resolution times and ensures the voice of the customer is heard. Support requests can be created directly via the Service portal which you will see later. Finally, the BPOS staff will continuously created updated KB articles specifically for BPOS related issues.

Microsoft promises at least 99.9% uptime for all services included with BPOS. That includes the network, storage and server level.

Exchange Online Features

So what features do you get with Exchange Online? Well, by default your users get 1GB mailboxes (although these can be adjusted up to 4GB or down to 256MB). Your users will be able to send and receive messages up to 20MB including any attachments. In regards to client access, users can access their mailboxes via Microsoft Office Outlook 2007, Office Outlook Web Access, Microsoft Office Entourage 2008, and mobile device access (Windows mobile 6.0 devices, Nokia E and N series, Apple iPhone and BlackBerry).

The Exchange databases in the Microsoft Online environment have been configured with a deleted item recovery time of 14 days and a deleted mailbox recovery time of 30 days. But please bear in mind that if you delete a mailbox you as an admin cannot reconnect it yourself. Instead you must submit a support request in order to have BPOS staff do it for you.

You can create Exchange users, groups, contacts, and conference rooms via the Microsoft Online Services Administration Center. You can also add senders to safe sender and blocked sender lists.

As mentioned in the previous section, the service level agreement (SLA) for Exchange Online subscribers is 99.9% uptime. In case of disaster, Microsoft promises a recovery time objective (RTO) and recovery point objective (RPO) of 24 hours or less.

You can replicate users and migrate data from any Exchange 2000, 2003 or 2007 on-premise messaging infrastructure to Exchange Online. If you want to migrate from a legacy (such as Exchange 5.5) or foreign (such a Gmail, Yahoo, UW IMAP Server, Netscape, Sun One, Communicate Pro etc.) messaging environment to Exchange Online, the Exchange Online migration tools also have support for POP3/IMAPv4 based migrations, which would be used in such scenarios.

Currently, you cannot migrate directly from Lotus Domino to Exchange Online. You must first migrate Lotus Domino to an on-premise Exchange environment using the Microsoft Transporter Suite and then migrate from there to Exchange Online. Alternatively, you must migrate from Lotus Domino using a POP3 or IMAPv4 based migration approach. But Quest Software should be working on a solution that will make it possible to migrate directly from Lotus Domino to Exchange Online.

When migrating from Exchange-based environments, you can establish directory synchronization so that AD users, groups and contacts are replicated to Exchange Online from your on-premise Active Directory environment. This will create a temporary unified GAL during the migration period. In addition, you will be able to share the same SMTP domain name between your on-premise messaging infrastructure and Exchange Online and thereby establish true e-mail coexistence.

Windows 2000, 2003 and 2008 Active Directories are supported by the Exchange Online migration tools.

Also, you do not necessarily need to migrate all your Exchange users, groups and contacts to Exchange Online, it is also supported to run in hybrid mode, where you migrate some of your users, groups and contacts to Exchange Online and keep the rest on-premise. If your business has a large and complex messaging infrastructure it is often a good idea to keep some Exchange servers in the on premise environment, as you probably have line of business applications that uses Exchange for relaying purposes, custom connectors to other systems etc.

Another thing worth mentioning is that you do not necessarily need to manage users, groups, and contacts that have been migrated to Exchange Online via the web-based Exchange Online services portal. Actually if you set up directory synchronization from your on-premise environment to Exchange Online, you must manage these objects via the Active Directory Users and Computers and Exchange Management Console MMC snap-ins or the Exchange Management Shell. Replicated objects cannot be managed via the Exchange Online services portal.

If you are establishing a greenfield, you can also create a brand new Exchange Online based messaging environment in which you manage Exchange objects via the Services portal.

Inbound e-mail from the Internet to Exchange users, groups and contacts hosted at Exchange Online is routed through Exchange Hosted Services. You can choose to have inbound mail point to your on-premising infrastructure or directly to Exchange Hosted Services, which routes it on to the respective Exchange 2007 server at Exchange Online.


You can use the Microsoft Online Services Cost Estimator shown in Figure 3 to find out more about pricing. But when Exchange Online is used as a standalone service, you can expect around 10$ per user per month. If you have Software Assurance (SA), you will get a discount per Exchange Standard CAL you have. Likewise if you order more than just the Exchange Online service included in BPOS, you will get further rebate.

Microsoft Online Services Cost Estimator
Figure 3: Microsoft Online Services Cost Estimator


In this first article in this article series which takes a close look at Exchange Online, we went through what this articles series will cover. In addition, we took a first look at what Exchange Online is as well as what this service can offer your business. Then, I explained how the infrastructure behind Exchange Online (and BPOS) has been designed. Finally, I gave you an estimate of the expected cost per Exchange Online user.

In the next part, I will show you how to sign up for a trial of Exchange Online as well as explain what you need to set up in your lab environment if you want to follow along with the steps provided throughout this articles series.


If you would like to read the other parts in this article series please go to:

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