Hosted vs. On Premise Email

Barely a week goes by where someone doesn't mention either Office 365 or Google Apps to me (or both). You might think that I'm adamantly opposed to hosted email because I sell on-premise solutions, but I'm not. It can make sense for some people and there are even some advantages, but just as having an on-premise mail server has its good points and its bad, so does out-sourcing your email to someone else.

By the way, I do need to mention that you can self-host. That is, if the idea of email in the cloud appeals to you because availability or for whatever reason, there's no reason that you can't put up a server at Amazon or whatever and retain control of your email. See my Hosted services vs. self-hosting article for more on that.

Here, I want to look at the things you should consider before shutting down your in-house mailserver.

Disclaimer: I've been selling and supporting mailservers for more than twenty years. Of course I have a bias toward the things I sell. I always try to see that in myself so that I can keep it out of articles like this, but you should be aware of my prejudices.


Although both Microsoft and Google are charging far less than many other hosting companies, there's absolutely no contest against on-premise unless you only have a very small number of users. I did some cost comparisons at my Hosted Google Apps Gmail vs. in-house Mail Server post a few years ago. Hardware costs have of course decreased since then and while support costs may have increased, the need for operating system support has actually lessened and can even almost disappear entirely with packaged virtual machines.

The cost for a 50 user hosted email will be approximately $2,500.00 a year. That's a fair pile of money and that is that. Contrast that with the typical maintenance cost for a Kerio mailserver of the same size, which would less than $600.00. Yes, that's not counting hardware or support, but even if you go overboard on estimating that, you'll always be less money.

The cost gap becomes even wider as your user base goes up. A 100 user Kerio system renews at around $1,100.00 yearly vs. $5,000.00 or more for hosted email. Hardware and support costs aren't any different.

That doesn't count extras like more storage space, archiving, virus scanning..


"Wait just a minute", you are probably saying, "A 100 user base obviously requires more support than a 50 user base!"

Well, sure. But those are support costs you have whether your email is in-house or out. Users who can't remember passwords, users who misconfigure clients - those are still your problems. So are the users who mangle email addresses they type, set their reply-to incorrectly or give out incorrect email addresses to people who want to send you email. Almost everything on the client side (which is where the lion's share of the support is anyway) is still your problem.

And, lucky you, you get some new issues to deal with..


You may have had the unpleasant experience of having your IP blacklisted. That sometimes happens because some spammer was using that IP before you got it, or it could be because you caught a PC virus or were too aggressive with your marketing email. Whatever the cause, it was probably pretty quick to fix and (unless you kept on being sloppy) it may never have recurred.

When you let somebody like Google or Microsoft handle your mail, you are usually sharing an IP with other people. When they misbehave, the resulting blacklisting affects them AND you.

It happens often enough that Google even has an article about it

Quote from Email bounces because your IP address is blacklisted

On rare occasions, you might send mail from your Gmail account, then receive a notice that your mail has bounced because your IP address has been blacklisted by the recipient.

I can tell you that it's not all that rare..

More important is that unfortunately, not everybody *bounces*. I don't bounce people on blacklists, I just silently ignore them and I know that other folks do the same. That means that sometimes you won't KNOW that your email never got delivered.

Why is that any different than on your own server? Let's look at two scenarios to see why.

In the first, it's your server that's been blacklisted. As it almost certainly will remain blacklisted until you do something about it, you will find out - some piece of mail will bounce sooner or later. When it does, you fix the problem and , as noted before, unless you make a habit of being spammish, it may not happen again for a long time, if ever.

In the other case, the IP you share with who knows how many other people gets blacklisted because one of them is a spammer. Let's say that's at Microsoft and that they are really on top of it and find out very quickly. Within an hour they identify the bad guy, boot him off and have the blacklist removed.

Everything you send in that period might not get through. After that, everything's fine. During that hour, if nothing actually bounced, you could have emails that were just silently ignored by the recipients. Isn't that fun? Mysteriously missing emails.

Here's the best part: it can happen again next week, next month or even tomorrow! It could happen over and over again and you might never even know..


If you are subject to Sarbanes Oxley, HIPPA or other regulations, these are all still your responsibility, too. Need to archive? That's extra cost with most hosting - it isn't when you do it yourself.


If you are a regular reader of this site, you know that I'm always writing scripts to do this odd thing or the other. That's an ability you usually lose completely when someone else hosts your email.


When your email is in-house, in-house email never leaves your network. Yes, your local administrator can read your email. So can the admin(s) at the hosted site - do you know who they are?

Changed your mind?

It's usually easy to transfer your on-premise email store to someone else. Kerio Connect stores every bit of email and every contact and calendar entry as plain text files and so do most in-house systems (with the notable exception of Exchange). You can almost always get that data to wherever it needs to go.

Will it be just as easy to bring it back? Maybe, maybe not..

Internet Down

Oops - no email. You can still do internal email if you are on premise, but not if you are hosted.

What about people sending email to you? If your on-premise server is unavailable because your internet is dead, your customers know that. They aren't going to be fuming as the hours tick by and that Very Important email they sent doesn't get answered. It got delivered to your hosting provider just fine, but you can't get it - too bad your customers don't know that!

Maintenance Windows

You may not have any control over maintenance windows with hosted email. When they decide something needs to be rebooted, migrated, upgraded or whatever, they usually do what THEY need to do, not what's convenient for you.

System down

Hey, it can happen to anyone - your in-house system or a hosted system. If your data store isn't damaged or you just want email back up and running with or without the existing store, your recovery time with a system like Kerio is just a few minutes longer than the time it takes to find a machine to run it on. If you need that to happen NOW, you can probably do it.

With the hosted provider.. heck, who knows? Yeah, they have an SLA with you and yeah, they want it back up running fast, but it's THEIR priorities that matter, not yours. So if their 5,000 seat customer machine crashes at the same time as one with 1,000 seats, I'd expect they'd replace the big one first. Too bad you are one of the 1,000, isn't it?

So, that's it. Some things to think about. I should also mention that if you insist upon going this way, I can offer hosted Kerio Connect to you also. I can't beat Office 365 prices, but I can come close and I can beat the heck out of them on support, so if that matters to you, give me a call or shoot me an email.

Got something to add? Send me email.

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© Anthony Lawrence

Fri Jun 14 17:06:17 2013: 12125   TonyLawrence


So, I really don't think any but the smallest customers should even think about this.

However, if you really think you should, I can offer you hosting at competitive pricing. It will be Kerio Connect, so if you change your mind, it won't be as hard to switch back to in-house.

Contact me for more information and price quotes.

Fri Jun 14 19:26:14 2013: 12126   anonymous


"If your on-premise server is unavailable because your internet is dead, your customers know that. They aren't going to be fuming as the hours tick by and that Very Important email they sent doesn't get answered. It got delivered to your hosting provider just fine, but you can't get it - too bad your customers don't know that!"

This is exactly the opposite to me - if your on-site server is down because of no internet, your clients won't know anything because most email systems wait 4 hours before they send back a warning saying they can't get to you.

If your hosted email is down because you have no internet, you can use your phone (which 95% of our clients have configured to check email) or go a starbucks/panera and use your mail or webmail client.

Fri Jun 14 19:28:53 2013: 12127   TonyLawrence


Fair point :-)

Tue Jun 18 18:19:24 2013: 12135   anonymous


In hosting GAPPS for 5 years and a thousand email addresses, I have never had a blacklisted email, ever. It may be a QA on their site but that does not mean it happens regularity.

When I hosted internally, it was a constant fight with blacklisting, or a virus on one computer blacklisting the entire network, or a static IP from a DSL line, which, it seems most DSL lines are blacklisted. Even worse was time wasted checking the logs to make sure the server was locked down and to see why the email was never delivered.

Most good hosting services offer up a SLA, so maintenance downtime simply is not an issue.

I know you are anti-google, pro-Kerio which is fine. I am pro-google and anti-self hosting, so we sit on the other side of the fences in that regard but the only real downside to cloud hosting is the continuing costs, which I think are off-set by Software Maintenance, Server Maintenance, Software Maintenance Fees, Backup fees and downtime.

Unless you are a large company with their own major data centre, offsite replication and a full IT staff, hosted email is the way to go.

Tue Jun 18 19:05:50 2013: 12136   TonyLawrence


I'm not anti-Google at all - you didn't read what I said.

It's fine for small companies. It (and all hosting) are expensive for larger companies. If you feel the expense is worth it, fine. I don't think it is.

Tue Jun 18 19:07:00 2013: 12137   TonyLawrence


And as I explained above, you wouldn't necessarily KNOW that you were blacklisted :-)

Fri Jun 28 15:10:55 2013: 12168   TonyLawrence


Here's another issue that Microsoft has kindly created for Office 365 users:


Kerio Connect Mailserver

Kerio Samepage

Kerio Control Firewall

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