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Microsoft 365 vs. MS Exchange Server

Cloud vs. On-Prem for Mail Systems.

The biggest difference between MS Exchange Server and Office 365 (Microsoft 365) is the centralization of data and who it is managed by. Utilizing a cloud service such as Office 365 (Microsoft 365), all of your data and services are being managed by Microsoft. MS Exchange Server is hosted in house with physical hardware, meaning that data can be managed locally, and services will always be available on the local area network (LAN). Every situation is unique and dependent on future business goals and function.

Microsoft 365: (Cloud) Pros:

  • Cost Effective... Licensing is based on the amount of users which includes all premium MS Office applications such as Word, Outlook, Excel, and PowerPoint

  • Reduced Resources... Utilizing a cloud based system removes need of physical hardware

  • Ease of Maintenance... Microsoft servers are maintained by Microsoft saving troubleshooting and maintenance time

  • Access to Documents and Email 24/7... MS stores all of your documents in their repositories which can be access from any computer, at any time


  • Data Security... Relying on a cloud service to house your data poses a security threat to your business. Microsoft employs security threat protection, but without the ability to physically control the services, you can not employ your own security features.

  • Limited Features... Utilizing the online version of MS Office apps have limitations

  • Recurring Monthly Fees... As long as you will need email services, you will always have a monthly recurring bill to be paid

  • Larger Bandwidth... Online services will result in increased consumption of online bandwidth

Microsoft Exchange Server: (On-Prem) Pros:

  • Enterprise Level Security... Keeping the services held internally, you are able to employ customized security features

  • Scheduled Maintenance... Scheduled maintenance can be employed when it is most convenient for your business

  • Reduced Outages... Managing email services locally means the reliance on outside of your local area network is not a worry

  • Ease of Control... When a email server is hosted in house, the ability to control and modify anything pertaining to the configuration is always available


  • Cost... The cost associated is higher than cloud services because of the dependency on physical hardware

  • Management... Maintaining and managing MS Exchange services requires a larger deal of attention for IT Technicians compared to cloud hosted services

  • Expertise... Microsoft Exchange Server requires a great deal of expertise in order to configure and mange

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