Email, the Lowest-Hanging Fruit of the Cloud

Published by: TechNet Magazine

Written by: Mitch Irsfeld

Email is a great application for “testing the air” in the Cloud. Moreover, a
coexistence strategy enables you move some domains off-premise to start
realizing the cost benefits of email in the cloud.

Email is emerging as the low-hanging fruit for cloud computing in the
enterprise. It’s a workload that lends itself quite naturally to the service
model and, shows great potential for a fast return on investment. Email’s also
the logical walk-before-you-run approach to acclimating your user base to
cloud-based servers.  The coexistence approach of maintaining both on-premise
mailboxes and online mailboxes has the added advantage of enabling you to
compare on-premise and cloud functionality, performance, and cost

Mimecast’s recent Cloud Barometer Survey
showed that more than half of enterprises have already adopted some
form of cloud computing and 66 percent said they are now thinking of moving to
the cloud. And guess what the most popular service is? That’s right, email.

This edition of TechNet ON will help you build your email
coexistence strategy with pointers to several Microsoft and non-MS resources.
Exciting upgrades are on the near horizon for Microsoft’s Exchange Online and
across the entire Business Productivity Online Suite, but customers are already
realizing significant cost reductions, whether they move their email servers
completely to the cloud or take the hybrid approach moving only some email

Which costs evaporate in the cloud?

Let’s look at the first assertion: the ROI of email in the cloud. The obvious
way to save money when moving email to the cloud comes from reducing or
eliminating the hardware, administration and support costs of manning your own
servers. Yet it also reduces the burden of routine tasks such as installation,
provisioning, ongoing maintenance, patches, updates, and upgrades. In addition
to hardware and support staffing costs–the two largest chunks of on-premise
email budgets–your software costs, including security and anti-malware overhead,
move to a variable cost model that can be expanded or contracted based on the

The transformation due to the convenience of cloud computing is still
underappreciated. I think Jeff Staser of the Staser Consulting Group said it
best in this
when he quipped that thinking along traditional lines of owning
servers is like “owning a car at every airport so that you have one when you
need it. We’d rather rent that car when we’re travelling.”

In the article Tier
Your Workforce to Save Money with Cloud-Based Corporate Email
, Forrester
Research says that companies with fewer than 15,000 mailboxes will find it
cheaper to host all their mailboxes in the cloud compared to on internal
servers. But larger companies should realize that different types of email users
have different costs associated with their mailboxes, and that they can
selectively migrate certain classes of users to realize substantial savings.
Forrester reports that a typical large firm moving 20,000 occasional users to
Microsoft Exchange Online can save more than $63 per person annually, a
first-year savings of $1.26 million. That’s low-hanging fruit, if ever there was
such a thing in information technology.

For more on measuring savings when moving to cloud computing, check out
CIO Magazine’s
8 Ways to
Measure Cloud ROI

Which brings us to the second assertion, that email is logical workload for
beginning a coexistence strategy with cloud computing. In addition to segmenting
your workforce, as Forrester suggests (for instance, by information workers,
mobile executives, and occasional users) you can also segment by your existing
domains based on organizational structure, region, or other factors.

Cloud Coexistence

It’s fairly straightforward to envision splitting your domains—even in
small-to-medium-sized organizations—along the functional factors above, but that
also maps to logical ways to organize and manage the coexistence of on-premise
and cloud-based mailboxes.

But it doesn’t have to be an either/or proposition. Organizations can take
advantage of online services within their own networks before embracing the
public cloud. As Steve Ballmer predicted earlier this year at an IDC conference
in Brazil, the whole software and hardware architecture for what we think of
today as the server is what we'll think of tomorrow as the cloud. “If we operate
the cloud, we talk about it as the public cloud, but these same technologies
will be available over time to our customers with a special support relationship
with us, for example with our Windows Azure and SQL Azure technologies, so that
you can run your own private cloud, if you will, in addition, and benefit from
these same technologies.”

Remember that there are several gotchas in the idea of considering
only at per-user service fees for hosted email servers. You’ll need to make sure
that services like archiving, filtering, security and compliance can be
delivered with equal or better results. The various applications that work with
your email system (integrated voice, instant messaging, live meeting,
conferencing, etc.) will have to be integrated and tested.

Exchange Server 2010 was designed to support hybrid deployments of on-premise
and cloud mailboxes and
Exchange Server 2010 SP1 includes
functionality that supports coexistence with Exchange Online, however,
Exchange Online is still being updated to support the Exchange 2010 SP1

Exchange 2010 also uses an identity service called Microsoft Federation Gateway which runs in the
cloud to provide the trust infrastructure needed for secure sharing of calendar,
contacts and free/busy information.

Exchange Online

Once you decide to move mailboxes to the cloud, setting them up is fairly
easy with Exchange Online. Our content cowboy-at-large, Keith Combs, recently
subscribed to Exchange Online and walks through the simple process of setting up
domains and users in his
Online Overview
posting. There you will find two short Exchange Online
1: Account Logon and Domain Setup
, and Part
2: Adding and Testing Users

As Keith points out, there isn’t really a downside to giving Exchange Online
whirl. You can get the 30-day trial free. You don’t have to commit any of your
production domains to this process for testing, and, if you decide to buy, the
subscription is month-to-month, so it’s easy to make changes.

As noted in TechNet Magazine’s Exchange 2010: A Closer Look, you will
ultimately be able to manage Exchange Online from the Exchange Management
Console and Exchange Management Shell, once Microsoft updates Exchange Online to
Exchange 2010. This will allow you to manage an on-premises solution or a hosted
service from the same console. For now, the
Online Services Administration Center
gives you an online management portal
to manage services and users. You can import multiple user accounts, use e-mail
migration tools, create distribution lists, create SharePoint site collections,
and submit service requests to Microsoft Online Services Technical Support from
the dashboard.

The Microsoft Business Productivity Online Standard
is a handy bundle of several popular messaging and collaboration
solutions, including Exchange Online, also provides e-mail coexistence and
migration tools. If you have Active Directory services and Microsoft Exchange
Server, the Microsoft Online
Directory Synchronization Tool
can synchronize user accounts, contacts, and
groups from your local environment to Microsoft Online Services. You can also
use this tool to make your Microsoft Exchange Global Address List (GAL)
available to users in Exchange Online.

Need to convert internal email archives to the cloud? Use the Microsoft Online Services Migration Tools to
forward copies of your Exchange Server mail to your Exchange Online mailboxes.
You can also use the Migration Tools to copy content from your Exchange Server,
POP3, or IMAP4 e-mail server mailboxes to your Exchange Online mailboxes.

Coming soon in Online Services

With the launch of Exchange, SharePoint and Office 2010 earlier this year,
the Business Productivity Online Suite (BPOS) team has been working hard to
update BPOS and get closer to parity with those on-premise server products. In
the coming months, expect previews of the new capabilities in Exchange Online,

  • Voice mail with Unified Messaging
  • Integrated archiving
  • Retention policies and legal hold
  • Transport rules
  • Multi-mailbox search
  • Conversation View
  • MailTips
  • Enhanced Web-based administration
  • Role-Based Access Control
  • Remote PowerShell
  • Free/busy between cloud and on-premises
  • Cross-premises management
  • Native migration tools

Stay abreast of the previews on the Microsoft Online Services Team

We know that enterprises continue to have concerns around migrating to the
cloud, and a critical workload like email is certainly no exception, especially
when it comes to security. But we also know that many of you are already testing
the wind in the clouds.