Cloud Technology Blog

Should Businesses Still Run On-Premise Exchange or Switch to Exchange Online?

In today’s digital age, the word “cloud” has become a huge buzzword. IT admins everywhere are either in discussions to migrate to Microsoft 365, in the process of migrating, or have fully completed their migration from on-premises Exchange to Microsoft 365.

However, some companies find that they want to migrate back to on-premises Exchange Server after completing their migration due to one or more reasons. One such reason is that after they completed a full migration and ceased using on-premises Exchange Server, they find the cloud has limited management control functions compared to an on-premises Exchange Server.

It brings us to the big question covered in this article for companies seeking to migrate to Microsoft 365 or other cloud environments. Should you keep your on-premises Exchange environment and Active Directory servers for management purposes or migrate entirely to a cloud environment like Microsoft 365?

Is Unified Messaging Dead?

The term “Unified Communications” is practically dead. At the very least, you should regard it as outdated and treat it as a legacy term that describes legacy integrations between vendors, Skype for Business (Lync), and other proprietary vendor integrations.

Today, any IP telephony specialist will confirm that cloud voicemail has replaced unified messaging. Skype for Business 2015 has reached its end of life, while the 2019 version only supports Cloud Voicemail – hosted in Azure. Therefore, there is no rationale for running a full on-premises Exchange solution anymore.

Microsoft 365 (Hosted Exchange Services) vs. On-Premise Exchange

Before choosing the best solution for your company, it’s essential to understand all your options by comparing the advantages and disadvantages of running an on-premises Exchange Server and a full migration to Exchange Online.

Exchange Server On-Premise

An on-premises solution requires you to keep one or more servers to run Exchange within the company.

Its advantages include:

  • The hardware belongs to the business, so it’s under your complete control.
  • In-house Exchange servers enable simpler integration to external systems that support or work with MS Exchange like Mail-Store or File-Smart.
  • Exchange data is under your control.
  • You can control server updates, re-starts, shutdowns, and backups and conduct them at your convenience.
  • You can apply upgrades and server configuration at your convenience.
  • Outages and bottlenecks to your internet connections will not affect accessibility and performance provided you set up your Exchange server well.
  • You have full access to your mailboxes from anywhere provided you have an Internet connection.
  • You can achieve storage efficiency because public folders allow you to share mailboxes with all users.
  • Supports the ability to configure high-level and multi-level security
  • Allows complete email archiving with sophisticated search facilities
  • Supports the remote wiping of stolen or lost business devices like IPads


  • You are responsible for hardware maintenance, repairs, and related issues.
  • Requires large initial dollar investment in the hardware, software, and associated licensing you may need to start and run your on-premises Exchange Server
  • Server maintenance is relatively higher compared to a cloud solution.
  • You need additional IT skills to support the Exchange Server(s) or associated infrastructure. For example, an IP telephony specialist to set up, manage, or maintain your IP phone system.
  • The reliability and uptime of your on-premises Exchange server(s) depend on your configuration and the level of infrastructure investment and maintenance.

Microsoft 365

Microsoft 365 is currently the best value for your money and reliability amongst the Cloud solutions in existence. It’s available in several variants depending on your business needs, size, and other factors.

Its advantages include:

  • It’s a packaged solution that includes Exchange, SharePoint, and Lync services.
  • It includes the latest version and updates of the Microsoft Office License.
  • You can implement it quickly and efficiently compared to on-premises Exchange.
  • Offers excellent security, functionality, scalability, and stability
  • You can access the service anywhere with internet service available.
  • It has no end-user requirement. Microsoft handles all maintenance and support.
  • The monthly pay-as-you-go model allows you to commence operations quickly without the high cost of in-house infrastructure and setup.
  • Has minimal-to-no downtown
  • Microsoft completes all server hardware and software upgrades.
  • Microsoft 365 is FISMA, ISO27001, HIPAA, and GDPR certified


  • Data is susceptible to the laws, compliance, and regulations of other overseas countries.
  • Has difficult migration that requires third-party tools, which can be time-consuming for your business
  • Integrating server-installed applications is a challenge.
  • Limited legal archiving capabilities

What is the Best practice?

The best practice as far as on-premises Exchange vs. Microsoft 365 Exchange Online is to run a single Exchange 2019 mailbox server in-house for management purposes and then host your email on Exchange online. It gives you the management control you need and allows you to enjoy the advantages of both on-premises Exchange and Microsoft 365 online Exchange while minimizing both options’ disadvantages.

When your business runs Exchange Online, it gets the rich integration of Microsoft 365 solutions that include Microsoft Teams. Additionally, you get better built-in malware and spam protection. It also frees up your IT team because they no longer need to update, manage, and maintain in-house servers regularly.

The best part is Exchange Online is inclusive in any Microsoft 365 license you purchase. It means that if you want to use cloud services, which is almost a requirement today, migrating to the cloud makes sense from a financial and security standpoint.

Unfortunately, exchange online (just like other cloud services) has zero-day exploit security concerns. The cyber-attack targets all current versions of Exchange even when you never ran Unified Messaging since there are different ways to get administrator privileges. Therefore, running the latest version of Exchange without its Unified Messaging service only makes it more challenging but not impossible for malicious actors to run privileged escalation exploits.

The Bottom Line

There is no perfect solution to satisfy all business requirements equally since everyone has different goals and circumstances. On-premises Exchange might seem old-fashioned, but it works for many companies that don’t want to or can’t switch to Exchange online for any number of reasons.

Get in touch with In The Cloud Technologies to discuss your options and requirements with one of our Microsoft Cloud Services professionals. We specialize in Microsoft 365 services, including Microsoft Teams and Azure. We service clients in Boston, MA, and the New England region to maximize their cloud services and solutions.