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© October 2007 Anthony Lawrence

Hosted Google Apps Gmail vs. in-house Mail Server

I suppose I need a disclaimer here: I sell mail servers. Specifically I sell Kerio Mailserver and that represents a good chunk of income for me. Therefore, you wouldn't expect that I'd be recommending Gmail as a corporate mail solution.

Well, in fact I can recommend this for some cases. It may not be for everyone - there are some disadvantages - but it can make a lot of sense and the price is reasonable, especially for very small organizations.

Let's look at the cost first, because that's particularly important to the kind of small businesses who might consider this. Google Apps is $50 per user per year. That includes Gmail, Calendar, Docs, Sites, Blogger and more (though of course any of those are also available free), at least 25 GB of storage (with more coming according to their feature comparison page), virus and spam scanning, policy management (message rules) and deleted message recovery, mobile email tols and more. As mail and calendaring are what matters to most users, the feature set compares fairly well with what Kerio offers: there are a few differences here and there, things Kerio has that Gmail/Google Calendar doesn't and vice versa, but overall the solutions are very similar. What does Kerio cost per year?

Kerio is more typically compared with Microsoft Exchange or Hosted Exchange. That's usually much more expensive, running at least twice as much as Gmail.

Well, because Kerio has a higher first year price than for subsequent renewals, and has a base 10 user license with addons for more, we need to look at this over a period of time. Let's pick 5 years as a start, and we'll look at it for varying users. Here's the breakdown:

 Users Gmail Kerio
 5 $1,250.00 $1,120.00
 10 $2,500.00 $1,470.00
 20 $5,000.00 $2,170.00
 50 $12,500.00 $4,270.00
 100 $25,000.00 $7,770.00

Kerio is list price with Sophos virus scanning as of April 2012.

Note that a limited 10 user version of Gmail Apps, without support, is available for free. See Get started with Google Apps for free.

If you add Kerio Workspace in, that doesn't add much: $350 for the 5 user over 5 years and $2,150 on the 50 user line.

That's a clear win for Kerio (unless you are using the free suite), but we forgot something: we need to operate our own equipment in house. For this kind of load (50 users or less) we don't really need to dedicate anything expensive to the task, but there is operational expense and depreciation. Let's say that a machine suitable for this costs $1,000.00 and that we have to replace it after five years. Let's add another $20.00 a month on for operational expense and call the five year cost $2,200.00. Let's round up to $2,500.00 Our chart now shows:

 Users Gmail Kerio
 5 $1,250.00 $2,620.00
 10 $2,500.00 $3,970.00
 20 $5,000.00 $4,670.00
 50 $12,500.00 $6,770.00
 100 $25,000.00 $10,270.00

It looks like Gmail wins at 10 users or less.

Now let's look at features. As I said, Gmail and Kerio have similar feature sets: virus and spam scanning, rule sets, deleted message recovery, archival retention and so on. But there are areas where they do not match. One is local message delivery, that is, when you send email to someone else within your organization. With Gmail, the message has to go out on the internet to Google's servers - it is not instantly available. Most of the time this is nearly instant, but not always. With an in-house server, that message never leaves your building - it's instantly available. That's an advantage for in-house.

However, Google has something that can sometimes be even better: Gmail chat. Of course you can easily set up a chat service within your own organization, but Google integrates this with Gmail and its Calendar application, which gives it a lot of power. Google ties this all together in a "Start Page". This also ties in Google Docs, so email attachments can be directly opened with that rather than Microsoft Office.

I don't think those features necessarily overpower the cost factor for 20 users and up, but they are attractive.

In most other areas, the two are very similar. I will say that Google's help pages are difficult to navigate because they bundle all of it under Google Apps and it's sometimes hard to tell what you are reading about. For example, I can't imagine that Gmail doesn't support groups (that is, a mail name that delivers to multiple people in the domain), but I can't find it in the documentation. I did ask Google directly; they unhelpfully referred me to the documentation where I had already failed to find it..

For both Kerio and Gmail, you can get free trials. This is really the best way to evaluate how either would work in your organization. However, when I asked Google how I could set up a free trial of this, again I got no answer.. pretty unhelpful all around, though I would at least hope it would be better if I were actually paying money.

I do suspect Enterprise Gmail could be a good solution for small businesses and perhaps even for some a little larger - though it does get fairly expensive compared to other solutions (like Kerio).

Got something to add? Send me email.

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Fri Oct 5 14:41:55 2007: 3186   BigDumbDInosaur

Something else that should be considered is that if a company chooses to run their own mail server (Kerio mail or otherwise) they will be able to depreciate the cost of the server. I believe the current IRS rules allow full depreciation in one year, which implies that you can host your mail on throw-away hardware if you are so inclined. Gmail, on the other hand, is a subletted service and can only be deducted as ordinary business expense. Also, with Google, the cost escalates per user, whereas it is possible to largely avoid that situation if you host on Linux running Sendmail or Postfix (I increasingly favor the latter).

As far as hosting one's own mail, I say do it. Google can raise their rates anytime they feel like doing so, or can change the service in a way that might not be acceptable to the small business owner. In any case, I have an inherent mistrust of public mail servers like Google's. With a public service, there is always the potential for an unscrupulous employee to sell your company E-mail address list or (worse yet) intercept messages for the benefit of a competitor.

Fri Oct 5 15:04:48 2007: 3187   TonyLawrence

Good points on the tax angle.

BTW, Kerio's runs on Windows, Linux or OS X but the preferred platform is Linux..

Wed Jan 28 13:58:15 2009: 5256   TonyLawrence

Also: Google has a free version of this for up to 50 users. It doesn't have calendaring or some of the other features (see (link) ) but is fine if all you need is basic mail.

Wed Jul 6 14:09:54 2011: 9603   TonyLawrence


Two more things:

You don't have to run in-house. I have my Kerio server at a (link) machine. Those start at $20 a month.

Blacklists: it's not too hard to get yourself on a blacklist. If someone else is hosting your mail and they decide you are a spammer, you are cut off instantly and completely. When you run your own, you may get blocked at some sites, but you are not blocked totally.


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