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Comparing Microsoft Exchange Server to “Low-Cost” and Commodity E-Mail Products

Published: January 2004
Copyright 2004 Microsoft Corporation. All rights reserved.

Summary

Several e-mail vendors—including Critical Path, Oracle, and other commodity e-mail solution providers—have received recent media attention by claiming that they offer basic e-mail services that are integrated with Microsoft ® Office and Microsoft Office Outlook ® 2003 solutions. Many of these vendors have little enterprise messaging experience and are using the lure of “low-cost messaging” as a sales tactic as they enter the market. In many cases, the technology they offer was developed for the service provider industry, and as a result, they may not be able to meet the needs of enterprise customers looking for a complete e-mail and collaboration solution.

Even the vendors’ claims of lower licensing costs can be incomplete. The key measures of overall system value—return on investment (ROI) and total cost of ownership (TCO)—is calculated using many factors. In addition to licensing costs, factors such as the ongoing cost of system management, the benefits of higher user productivity, and the value of system integration must be considered. The licensing policies of these vendors may even end up costing customers more for the same services, especially when deploying basic e-mail services to occasional users. Overall, these vendors invite customers to risk the e-mail dial tone of their businesses on unproven products that do not have strong track records of providing enterprise-grade e-mail and collaboration services.

Exchange Server has become a leader in the e-mail and collaboration industry by providing native integration with Outlook coupled with low TCO, excellent networking and security integration with the operating system, extensive support from third-party vendors, and the highest level of research and development in the industry. Exchange Server  2003 features include:

Complete, native support for all Outlook e-mail and information management features

Access from Outlook 2003 to Exchange 2003 across the Internet without virtual private networking (VPN)

A high ROI driven by extensive productivity features and low TCO

Integrated collaboration technology, including group scheduling, instant messaging, document portal access, and information rights management

Integrated support for mobile access to e-mail

Support for a wide range of messaging standards, including MAPI, Post Office Protocol (POP), Simple Mail Transfer Protocol (SMTP), Internet Message Access Protocol (IMAP), and Hypertext Transfer Protocol/Hypertext Markup Language (HTTP/HTML), compressed HTML (CHTML), and Extensible HTML (XHTML Wireless Application Protocol (WAP 2.0))

The scalability and performance to cost-effectively support even the largest organization

Directory integration for combined enterprise-wide messaging, network, and security administration

Nearly 1,000 vendors providing a diverse set of products and services related to Exchange

More than 100,000 professionals worldwide certified on Exchange

Support for smaller organizations requiring rich messaging and collaboration and also needing easy-to-deploy and easy-to-manage infrastructure at competive prices

Exchange enables you to tailor your e-mail and collaboration infrastructure to offer different levels of service to different user groups within your organization. With Exchange, you can implement high productivity services with full Outlook integration on the desktop; basic e-mail services using SMTP, POP, or IMAP; a thin client Web browser solution for low-cost group kiosk access; and mobile access from Microsoft Windows®–based mobile devices and browser-based personal digital assistants (PDAs) and cell phones—all within the same organization and using the same system management tools.

Unlike many vendors, which offer only a per-user licensing model, Exchange offers both per-user and per-device licensing models. The Exchange per-device licensing model enables an unlimited number of users to access Exchange through a shared computer. For example, multiple workers can use a shared kiosk with Outlook Web Access to access Exchange, and in this case, only one license per device is required.

Exchange also offers something that few, if any, of the new vendors can: the support of nearly 1,000 third-party software companies and systems integrators that offer add-on tools, services, solutions, and educational opportunities plus more than 100,000 Microsoft Certified Professionals (MCPs) worldwide who have been trained and certified on Exchange. This community of vendors enables you to fit Exchange to your organization’s specific goals, budget, technology, and management style.

In 2003 Exchange reached the milestone of 100 million seats licensed, and the product’s leadership continues to accelerate. According to the Radicati Group’s “Corporate Messaging and Collaboration Deployment and Procurement Plans, 2002-2004,” Exchange is the leading enterprise messaging platform: 44 percent of companies across a broad variety of industries, business sizes, and geographic regions chose Exchange. A Radicati survey in September 2001 found that among larger organizations, 58 percent of companies use Exchange—more than twice the number for the second-ranked product, Lotus Notes/Domino.

One reason for the success of Exchange is that Microsoft is committed to working closely with its customers to understand their specific technologies and business needs. Customers have asked for a rich variety of user productivity features, system integration with both the desktop and network infrastructures, and low TCO. The result is Exchange, a highly scalable and reliable e-mail and collaboration solution that can yield measurable ROI for organizations of all sizes.

The Only Product to Offer Complete Native Support for Microsoft Outlook

Exchange is the only product that offers complete, native integration with the award-winning Outlook messaging and collaboration client, allowing you to deliver the full range of Outlook e-mail management and collaboration features to your users. The commonly heard assertion that other products have Outlook support simply does not tell the whole story. Any product can deliver an e-mail message to the Outlook Inbox, but only Exchange provides complete e-mail, group scheduling, and collaboration integration with Outlook.

Take, for example, a product such as Oracle Collaboration Suite. Table 1 lists some of the Outlook integration features that are available when you use Exchange but that are not available when you use Outlook with Oracle Collaboration Suite.

Table 1. Outlook integration features with Exchange and Oracle.

* Remote procedure call (RPC) over HTTPS tunneling requires Windows XP with Service Pack 1 (SP1), Windows Server 2003 on domain controllers and global catalog servers, and Exchange front-end servers.

The features in Table 1 represent some of the most important and frequently used features available to knowledge workers. Choosing a product that does not include these features may forfeit the productivity gains that are possible when you use Exchange and Outlook together.

High ROI Driven by Productivity and Low TCO

While some vendors offer lower initial licensing fees than Exchange, their products may actually end up costing more and providing a lower overall ROI than Exchange. This situation can occur because licensing fees are only a small fraction of the total cost of owning and operating a messaging and collaboration system. In a January 2002 report entitled “Email: At what cost?” the META Group found that licensing fees account for a mere 16 percent of the cost of owning a messaging system.

The licensing policies of the so-called “low-cost” vendors may in fact end up costing you more for the same basic e-mail services than would Exchange. Because Exchange licenses e-mail services by either a per-device or a per-user basis, basic e-mail access using a group-access kiosk can be substantially less expensive with Exchange than with competing systems. With Exchange, any number of people can use the same workstation to get their e-mail, schedules, and contacts under a single client access license; therefore, deploying e-mail services for occasional users, such as factory and retail staff, may be far less expensive with Exchange than with vendors that appear to offer lower per-user licensing costs.

The low-cost e-mail and collaboration services that Exchange and Outlook provide are rich in productivity features. In a study published in August 2002, Ferris Research surveyed global enterprise organizations and reported direct costs as low as $11 per Exchange and Outlook user per month, including hardware, software licenses, system management, and major upgrade costs. A hosted solution may be even less expensive, with some solutions available for as little as $8 per user per month for Web-based Exchange services. And while analysts’ estimates of the TCO for Exchange may vary, what is clear is that the “low-cost” vendors base their claims on only a small part of the overall cost equation—license fees.

System management and storage also play important roles in determining overall cost. System management costs are likely to be lowest when a single system is used but can rise dramatically if multiple e-mail systems are implemented side by side. Exchange also helps lower the cost of storage by letting you choose commodity hardware from a wide range of vendors. In the final analysis, however, user productivity is the most important long-term economic benefit that you can achieve by using Exchange and Outlook together.

Group Scheduling and Wireless Messaging

Exchange provides Outlook users with integrated group scheduling and “out of the box” information sharing and collaboration. Group scheduling, fully integrated with Outlook, is the most commonly used collaboration feature among Exchange customers. Exchange also has built-in support for Outlook discussion groups, and sharing Outlook contacts with other users is easy with Exchange but difficult, if not impossible, with other products.

The Only Product That Provides Native Group Scheduling Integration with Outlook

Exchange is the only product that provides complete and native group scheduling functionality for the Outlook client. Although other solutions for group scheduling are available, buying a solution that is not completely integrated with Outlook means that your users have to switch among different products whenever they want to check someone’s availability, schedule a meeting, or book a conference room. Or, in the case of products, such as Oracle, that claim Outlook integration, users cannot use the standard Outlook forms for requesting a meeting and determining participants’ free and busy times.

Using Exchange and Outlook together also simplifies end-user training by providing the same interface for directory access for both e-mail and group scheduling. In addition, many products other than Exchange require installation of connector software on each desktop computer, increasing the cost and complexity of desktop system management. Group scheduling that is not fully integrated with Outlook may also result in additional administration overhead.

This situation could also lead to additional user training requirements because the user has to use a second client interface for scheduling. If the company purchases a third-party product for scheduling, it must consider licensing and hardware costs as well. Only Exchange delivers group scheduling that is completely integrated at both the client and server level. Exchange also includes application development hooks to integrate Outlook group scheduling with business process applications.

Complete Offline Support for all Outlook Folders and Directory Information

Only with Exchange can your Outlook users synchronize every Outlook folder—regardless of its contents—for offline use. Although other e-mail servers may offer limited offline support (for example, for Outlook e-mail items only), only the combination of Exchange and Outlook delivers the complete offline usage of Outlook e-mail, calendaring, contact, task, and collaboration folders. Using Exchange and Outlook together, you can take advantage of server-based storage and backup but quickly and easily synchronize your data for offline access. In addition, only with Exchange and Outlook can you use the Active Directory enterprise-wide address book both online and offline.

Integrated Support for Wireless Mobile Computing

Exchange 2003 supports mobile information workers and new remote worker scenarios. Deploying a separate mobile server solution is not required because Exchange 2003 comes with built-in support for Exchange ActiveSync, enabling Windows mobile-based Pocket PCs and Smartphones to wirelessly synchronize e-mail, calendar entries, and contacts directly with Exchange 2003.

Also included is Outlook Mobile Access, which enables browser-based devices (HTML, CHTML, and XHTML (WAP 2.0)) to wirelessly access e-mail, calendar, tasks, and the global address list (GAL). Connectivity to mobile devices, provisioning mobile accounts, and administering mobile access are integrated with Exchange 2003 management and share similar security and sign-on policies with your existing network, making mobile access easier to deploy and support. Mobile security is supported with available technologies such as 128-bit Secure Sockets Layer (SSL) wireless synchronization and support for RSA SecurID for authentication.

Standard Protocols for Flexible E-Mail Solutions Across Your Organization

Many of the vendors that advertise low-cost messaging claim that their use of standards such as POP, SMTP, and IMAP reduces the cost of purchasing and running an e-mail system. E-mail standards vary in how much functionality can be delivered through the combination of server and client software. For example the POP and SMTP standards define the lowest level of e-mail functionality in wide use today, allowing only basic e-mail sending and receiving. The IMAP standard adds a small amount of additional functionality, such as server-based folders that store only e-mail messages. Other standards, in particular the MAPI standard, provide delivery of advanced messaging features and collaboration functionality to Outlook users. Exchange supports all of these protocols, giving you the choice of which protocols to use within your organization.

The Flexibility to Offer Different Services to Different Classes of Users

Standards are important because they provide the flexibility for tailoring your Exchange installation to different classes of users within your organization. Most organizations choose Exchange and Outlook to deliver the highly productive MAPI e-mail and collaboration environment to their knowledge workers. However, both Exchange and Outlook support POP, SMTP, and IMAP, making it possible to deploy basic e-mail services to a wide range of employees and partners as well as customers. Being able to deploy a lower-functionality protocol such as SMTP also means that you can increase the number of users that each messaging system administrator manages. Exchange thus enables you to determine the appropriate tradeoff among functionality, scalability, and manageability for the user groups within your organization.

Web Client for E-mail, Group Scheduling, and Collaboration with a Familiar Outlook Experience

Exchange 2003 includes Outlook Web Access, a complete Web browser client that delivers e-mail, calendar, contacts, and collaboration to any user with a Web browser and a network connection. Outlook Web Access can be used to support roving users within your organization or for group-access kiosks. Outlook Web Access is also a great solution for mobile users when they are away from their offices and for workers who do not use Outlook or a Windows desktop.

Exchange customer John Hancock Financial Services, Inc., found several reasons to use Outlook Web Access. Says Charlie Raeburn, vice president for the company's Signator Technology Services, “Outlook Web Access gives us the best of both worlds. Our agents get all the benefits of Outlook, including its calendaring and collaboration features and the ability to synch to their Palm-based computers when using the Outlook client. And they also get a solution that works for them when they're traveling away from the office. Outlook Web Access is a win-win for everyone.”

This level of choice and the richness of functionality available with Exchange and Outlook together are part of what have made Exchange the number-one e-mail system in the world. With these facts in mind, it is easy to see through the claims of so-called “low-cost” vendors. Such a “low-cost” alternative is really a low-functionality alternative that doesn’t provide the features that increase productivity and ROI.

Proven Scalability for the Largest Organizations

Exchange has proven time and again to have the scalability needed for even the largest organization. Not only does an Exchange infrastructure support hundreds of thousands of users at companies such as General Electric, who has been an Exchange customer since the debut of the product, but service providers also choose Exchange as the basis for their massively scaled e-mail services. At a large aerospace manufacturer, for example, Exchange has an operating reliability of 99.98 percent for non-usable trouble tickets, which is excellent considering the scale of the infrastructure—more than 150,000 users.

Or consider Korea.com, which supports more than 6 million e-mail users with back-end mailbox servers that store up to 150,000 users per server. While this figure relies on low concurrency rates (less than 10 percent) and a lower end-user load profile than is typical in Internet service provider (ISP) environments, it is significantly higher than the 6,000 users per server achievable by enterprise customers running Exchange and Outlook using the MAPI protocol. Korea.com demonstrates the raw scalability that is possible with Exchange technology.

As you can see in Table 2, Exchange 2003 offers a range of scalability that can meet the needs of even the largest organization.

Table 2. Exchange scalability.

In two different-size Exchange 5.5 organizations, upgrading to Exchange 2003 enabled costs savings in hardware, software, administration, maintenance, and WAN costs. One organization saved approximately $240,000 annually by taking advantage of Exchange 2003 features such as multiple mailbox stores per server, the mailbox recovery storage group to support recovery efforts, and across-the-wire compression enabled with Outlook 2003. The other company saved about $600,000 in operational costs annually by leveraging the ability of Exchange 2003 to accommodate more users per server while maintaining usable backup windows.

Graphics packaging can consolidate 15 Exchange 5.5 servers across 15 different sites into a two-server configuration by using a centrally located, single two-node active-passive cluster.

KMZ Rosenman projects saving more than $360,000 in new hardware and software and approximately $150,000 in reduced administration costs in the first year with Exchange 2003.

Land America anticipates greater end-user productivity with the access to Exchange 2003 from Outlook 2003, Outlook Web Access, and new mobile supported devices such as the Pocket PC and Windows–powered Smartphones.

Note that all of these figures are based on supporting Outlook users with the MAPI protocol for complete messaging and collaboration services not just the e-mail–only services favored by vendors claiming to offer low-cost messaging.

Leading Integration with Windows Directory, Management, and Security Services

As demonstrated, Exchange has the richest integration with Outlook, the desktop client of choice, of any e-mail system available. Exchange also has the tightest integration with the Windows family of servers and Windows Server 2003 Active Directory service of any e-mail system available. Integration with Windows means a more-secure messaging infrastructure, one that is easier to manage, and results in IT cost savings.

Single Enterprise-wide Directory for Messaging and Network Resources

The Windows 2000 or Windows Server 2003 Active Directory directory service is an integral part—and a powerful benefit—of deploying Exchange 2003. Active Directory, which is an essential component of the Windows 2000 and Windows Server 2003 architecture, provides organizations with a directory service designed for distributed computing environments.

Active Directory allows you to centrally manage your network, e-mail, and collaboration resources and users while acting as the central authority for network security. This means you can easily create a flexible enterprise directory that serves as a single point for managing every aspect of your messaging system, from user and mailbox information to permissions, configuration data, file sharing, and much more. In addition, if you currently store directory information in other types of directories (for example, Lightweight Directory Access Protocol (LDAP) directories) you can use Microsoft metadirectory services to coordinate those directories and the Active Directory into a unified structure.

Unified System and Security Management

As the only messaging system fully integrated with the Windows 2000 and Windows Server 2003 security model, Exchange 2000 Server lets you use Windows 2000 and Windows Server 2003 security descriptors to define permissions for all e-mail and collaboration resources, including public collaboration folders.

With Exchange and Windows, you can manage security for both your network operating system and your messaging users by using a single model from a single location. Integration with the Microsoft Management Console (MMC) means that IT administrators can use their knowledge of one Microsoft product to manage an entire network and messaging users—all with a single interface from one location.

Exchange 2003 in Windows Small Business Server 2003

Exchange 2003 is included with Windows Small Business Server 2003 and offers the same rich messaging and collaboration experience to all organizations, regardless of size. Windows Small Business Server 2003 provides a complete business server solution with messaging and collaboration, security-enhanced Internet access, protected data storage, reliable printing, and the ability to run line-of-business applications. And its end-to-end administration features help technology providers set up, run, and maintain their networks productively and efficiently.

Extensive Support from the Third-Party Vendor and Professional Communities

The 2002 version of the Exchange Partner Guide lists nearly 1,000 unique companies offering a vast array of tools, services, solutions, and educational offerings to custom-fit Exchange to your organization. Some of the most popular third-party software products for Exchange enable greater depth of reporting, monitoring, and notification and support for fax integration, unified messaging, and communications. More than 100,000 MCPs have also passed Exchange certification courses. This population of educated professionals makes it easy to find a qualified Exchange partner for deployment, upgrade, or administration services. As a whole, the Exchange community makes it possible to deploy Exchange to fit exactly to the management needs, operations culture, and technology infrastructure of your organization.

The Bottom Line

Although “low-cost messaging” vendors claim to offer Outlook integration and lower costs, only Exchange, chosen by customers as the leading e-mail and collaboration server on the market, delivers the right combination of reliability, features, performance, and business value.

Exchange offers:

1. Technology built for enterprise customers with a proven track record of service and support
2. Complete, native integration with Outlook (and is the only product to do so)
3. Integrated support for mobile devices, including over-the-air synchronization and mobile browsers
4. Fully integrated group scheduling using all the forms and features of Outlook
5. A proven track record for scalability for even the largest global enterprise environment
6. Low TCO combined with high productivity and ROI
7. Support for widely used protocols including SMTP, POP, IMAP, MAPI, WAP, and HTTP/HTML
8. The flexibility to tailor e-mail solutions to different groups of users within an organization
9. Integration with Microsoft Office System, including Microsoft Office SharePoint™ Portal Server 2003 and Microsoft Office Live Communications Server 2003 for real-time access and collaboration
10. A powerful Web client for access to Exchange e-mail, calendar, and contacts
11. Seamless integration with Windows enterprise directory and security infrastructure
12. Nearly 1,000 third-party vendors providing a broad array of tools, services, solutions, and education
13. More than 100,000 professionals worldwide certified on Exchange
14. In short, Exchange is clearly a best choice for your e-mail and collaboration needs regardless of the size of your organization.

For more information, visit http://www.microsoft.com/exchange/.

The information contained in this document represents the current view of Microsoft Corporation on the issues discussed as of the date of publication. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information presented after the date of publication.

This White Paper is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.

Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation.

Microsoft may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Microsoft, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property.

© 2004 Microsoft Corporation. All rights reserved.

Microsoft, Active Directory, ActiveSync, Outlook, SharePoint, and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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