Hosted Exchange vs. Office 365

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Need some advice on choosing between Hosted Exchange service and Office 365? Check out this article on the Digital Design blog to learn about both options!

Choosing the correct cloud solution for businesses can be vital, as it will affect many aspects of the corporate infrastructure. Microsoft provides businesses with a couple of options: Hosted Exchange service and Office 365. Both serve a similar purpose and have their place on the market.

Hosted Exchange is a time proven system with over two decades of history. It accounts for over 50% of all business mailboxes and has established trustworthiness. The current version is built on the Microsoft Exchange 2010 platform, while Office 365 is a relatively new product from Microsoft. And although Office 365 hasn’t been on the market for as long as its older brother, it is the fastest growing Microsoft product.

Obviously there is no simple answer to the question which one is better. Check out the differences between Hosted Exchange and Office 365 as it will help you make the decision.

Differences between Hosted Exchange and Office 365

Archiving capabilities

Depending on the scale of a business the need for storage changes. Office 365 provides bigger mailbox sizes than most hosting providers.

Hosted Exchange Office 365
Mailbox – 25GB (average) Mailbox – 50GB
OneDrive cloud storage – 1TB

In addition to the generous email storage Office 365 includes cloud storage of 1TB. While the possible size for Hosted Exchange is potentially unlimited, this does drive the cost up, and not all providers offer big storage for emails.


One of the best features of cloud services is the possibility to synchronize data across devices. It is important that members of the company have access to all necessary data anywhere and anytime. The ability to work off-site and keep communication up and running will always improve productivity of businesses. Most Hosted Exchange providers will have ActiveSync, but where Office 365 outruns them all is Blackberry support at no extra charge. Hosted Exchange will add extra fee per user.


Again Office 365 gets on top of the game. While Hosted Exchange packages are secured, Office 365 is superior to all of them as it includes: SSAE 16 Certified, EU Safe harbor Compliant, EU model Clauses Capable, ISA 27001 Certified.

This does not mean that Hosted Exchange providers are not secure enough. It is just that Office 365 offers a very high level of security by default.

Business Utilities

Office 365 includes a big number of apps that serve business needs. On top of email, calendar and contacts (which is a standard set provided by all Hosted Exchanges), Office 365 gives such applications as Skype for Business and OneDrive for Business.


That is probably the most important aspect to consider as business goals may vary, so do the requirements for the platform.

Hosted Exchange provides businesses with the choice of version and there are multiple environments at disposal. Staying with a particular version that provides all necessary functionality is an option. However, it must be taken into account that any platform comes to a dead end eventually. Hosted Exchange does not include constant updates unlike Office 365, which is continually updated.

But here is the thing, going with Office 365 means essentially that you fully rely on Microsoft and all features that it provides. On the other hand, renting an off-site Hosted Exchange server means a limited amount of tools but it lives room for customization. Besides, as it has been mentioned previously, in order to improve functionality for the system your business will require additional third-party software. It will drive the cost up but at the same time it will allow your company to craft a platform for your specific needs.


Office 365 is significantly cheaper than Hosted Exchange. The yearly cost of an average Hosted Exchange package is about $150 per user. The cost of Office 365 starts from $37.2 per user. Not to mention that with Hosted Exchange the fee is flat. But Office 365 allows for adjustments in billing process, giving your organization scalability.

Need some professional advice on the choice of a cloud platform for your business? Contact Digital Design! We provide a full range of services related to cloud solutions for various industry domains and for businesses of any scale. Our team of specialists will help you choose a platform that is right for your business goals.