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Editor's Note: Email, the Lowest-Hanging Fruit of the Cloud

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.

By Mitch Irsfeld

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 side-by-side.

Mimecast’s recent Cloud Barometer Survey 2010 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 domains.

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 task.

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 short video 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 functionality.

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 Exchange Online Overview posting. There you will find two short Exchange Online screencasts: Part 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 Microsoft 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 Suite 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 Services 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, including:

  • 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 Blog.

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.

Mitch Irsfeld
Mitch Irsfeld, Editor of TechNet, is a veteran computer industry journalist and content developer who managed editorial staffs at several leading publications, including InformationWeek, InternetWeek and CommunicationsWeek. He is also an editor for TechNet Magazineand managing editor of the TechNet Flash newsletter.