So, You Want to Host Exchange?

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This happens to be the title of one of the highest rated sessions we had in our Business Productivity track at this year’s WPC. This Interactive was led by Michael van Dijken, a top subject matter expert on hosting Exchange and a member of my member of my Exchange Partner Marketing team.

User PhotoAs evidenced by the experience we had in the breakout room (and the feedback in the session evals), Michael drove a very compelling discussion around what it means to be an Exchange hosting partner in this new world of public and private clouds, whether offered by Microsoft or our rich eco-system of  solutions partners.

Michael did such a great job drive framing this discussion, I asked him to do a guest posting to provide you some guidance and direction if you are considering hosting Exchange 2010—whether in a public and/or private cloud—considering we are now in an age of native multi-tenancy built into the product, in a post-HMC world.

Without further ado, here’s Michael:

A few weeks ago, I once again had the pleasure of attending our annual Worldwide Partner Conference. As I’ve come to expect, this was an outstanding event, and I had the opportunity to have many great conversations with partners. As the “hosting guy” on the team, several of my conversations were with hosting service providers, and I was encouraged by the number of hosters getting ready to upgrade to Exchange 2010.

One of the questions which I found come up consistently (both in conversations and in my interactive breakout session at WPC titled “So You Want To Host Exchange?” – BP22i) was whether to deploy Exchange 2010 using the “/hosting” mode switch, or to simply use the standard configuration typical of an on-premises deployment. Given that this was such a topic of interest, I thought I’d address it here on the Exchange Partner blog. But first a little background on the subject.

With the release of Exchange 2010 SP1 earlier this year, we added a deployment option known as /hosting mode. Using this deployment option creates what can be thought of as a multi-tenant approach to hosting Exchange. In actual fact, /hosting mode uses a different Active Directory schema to create true separation between tenants – something which can obviously be very beneficial to service providers.

While this sounds like cotton candy, it should be noted that deploying using /hosting mode does have some limitations, most notably the fact that Exchange Unified Messaging is not available. There are no plans, at this time, to address this in the immediate future. You can learn more about this topic on TechNet.

Now, if you’re a service provider considering upgrading your hosting infrastructure to Exchange 2010, here’s my perspective on how to pick the right approach – it’s the same perspective I gave at WPC. Each approach has its pros and cons, and as with most things, your target customers should drive your decision. /hosting mode is an excellent approach if isolation and information privacy is of utmost concern to your target customers – but its light on a few key features as noted above. The on-premises approach delivers the features customers are asking for, but a lot of work needs to be done to the configuration to “mimic” multi-tenancy (and doesn’t ultimately achieve the same level of separation as /hosting mode).

“That’s all well and good, but what are customers asking for?” you might ask. Well, fortunately we have great research to draw from here. We know that most customers on Exchange 2003 and many on Exchange 2007 plan to upgrade to Exchange 2010 in the next several months. This is a great starting point – it means opportunity abounds. We also know that one of the primary reasons these customers cite for their desire to upgrade is so that are able to use the advanced features in Exchange 2010 – like Unified Messaging and the native archiving and discovery capabilities. So, interpreting these two pieces of information, we see that a significant portion of the opportunity is best served offering a full-featured hosted Exchange service. This perspective, by the way, resonates with service providers we’ve spoken to in recent months.

Now, there are (somewhat limited) scenarios where /hosting mode may be applicable. For example, particular regulated industries might require a high degree of tenant separation, or certain customer segments where features may not be a primary decision driver.

At this point, you’re probably asking “hasn’t Microsoft said that /hosting mode is the only way to go for service providers?” Well, yes, that has been our guidance. However, recognizing and listening to your feedback, we have started to adjust our perspective and began to articulate this at the Hosting Summit held in March. We’ll continue to do so in the coming months leading up to the release of Exchange Server 2010 SP2.

You might also be wondering how to deploy without using /hosting mode given that our published guidance is for /hosting mode. The best approach to do this today is to use a hosting automation solution, or to engage the services of a System Integrator with depth in the hosting industry (such as Implement.com). Following this approach both speeds your time to market, and offers you the confidence of a product already tested and proven in the marketplace. Check out these hosting automation solutions from the partners we work closely with:

We will also provide more guidance in due course. Stay tuned!

So, /hosting mode or standard enterprise deployment – it comes down to the needs of your customers and the market you’re trying to serve.

Michael van Dijken
Senior Product Management
Exchange Partner Marketing