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Google Apps vs. Exchange Server: and the winner goes to…


While on a support call today, a new Chrometa user asked about how to choose an Email server for a small firm. Afterward, I thought I’d share our company’s story on picking an email service.

When we started Chrometa, one of the first things on our to-do list was to set up email address for everyone. Previously, when we worked at other firms, we used Exchange Server. This nifty email server from Microsoft also synced everyone’s contact list and calendars. But now things are different. We were a small company that didn’t have the time, dollars, and IT staff to maintain our own Exchange Server. Also, our needs didn’t warrant such an investment.

So off we went to find a bare-bones email service. First, we signed up for Yahoo Small Business Email  — after all, our domain name was already hosted on Yahoo so we were all set to go. During the early days of product development (read: coding and testing), we didn’t really need any advanced features, like contact sharing. For shared calendars, we synced our Google Calendars to Outlook — all in all, everything was fine. But for most businesses, Yahoo Mail just doesn’t cut it. This brings us back to Microsoft Exchange Server.

Microsoft Exchange Server

Let’s start with the top 5 reasons companies run Microsoft Exchange Server:

  1. Outlook. Exchange Server was designed for Outlook.
  2. Shared contacts. Need to get in touch with someone? Just do a contact search and you’ll get the details as long as it’s in the Exchange Server’s Active Directory. Neat.
  3. Shared calendars
  4. Shared resources. Need to book that conference room?
  5. Webmail (run a web version of Outlook from your browser. Weeeee! It’s just not the same as Outlook for desktop)

This used to get pretty expensive, fast. Companies bought and ran their own Microsoft Exchange Server infrastructure. This meant that someone (and often more than one person) had to monitor it, upgrade it, and administer it. Their job was pretty important, as we all know what happens when either email or the Internet goes down (insert episode from the Office).

But wait, what’s all this ruckus I hear about Hosted Exchange?

Hosted Exchange

Hosted Exchange is a pretty good idea, and it really took off with the all the advancements in virtualization technologies. In plain English, virtualization means splitting a perfectly good computer into many little computers using software, and each one of those little computers can do its own thing independent of the others.

Hosted Exchange meant that your company can now *rent* the right to use an Exchange Server owned and administered by another company. That means you don’t have to buy the hardware, upgrade it, maintain it, or hire someone to look after it. Instead of spending $1,000’s/user/year on email, you’ve just cut that cost to $100’s/user/year. Pretty Awesome.

The other option you may not have considered is Google Apps. Last summer, we switched our company to Google Apps — and to this day I consider this one of the best decisions we’ve made.

Google Apps for Business

Why Google Apps? It does almost everything that Microsoft Exchange does, and a lot more! Plus it’s even more cost effective than Hosted Exchange.

  1. Outlook: check
  2. Shared Contacts: kind of, but it’s a hassle. You can easily share all your internal contacts (people within your company), but your company needs to maintain a separate LDAP server if you want shared address books. In other words, you can’t have a “universal address book” out-of-the-box just yet.
  3. Shared Calendar: check (Google Calendar sync to Outlook)
  4. Shared Resources: not really… but if you’re a small company, you probably don’t do a lot of conference room booking
  5. Webmail: well that’s a given.

What else do you get? Let’s drill down:

  1. Extremely simple email account setup and administration. This is really important if you’re a small firm. Wouldn’t it be nice to add accounts, forward email from one account to another, and set up “catch all” emails, without needing to call IT support?
  2. A better webmail experience. It’s Gmail, plus you get 25 GB’s of storage.
  3. Mobile access to Gmail on the iPhone. BlackBerry PUSH, Gmail Apps for BlackBerry and Android phones.
  4. Continuous improvement. Google Apps are constantly adding new features and improvements. Microsoft Exchange does not.

Finally, let talk economics. Google Apps charges $50/user/year. That’s <50% the cost of Hosted Exchange.

In the lawyer community, there has been much debate about the security and privacy of Google Apps. I have to agree that web security is very important. But do realize that your Hosted Exchange server is also on the web, as is your computer when it is connected to the Internet. As with any technology, the best security algorithm sits between your ears. Log out of web apps if you’re using a public terminal. And please check the recipient list before hitting reply-all :-)


For most small businesses, I’d recommend Google Apps. You’ll get all the key functionality of Hosted Exchange at a fraction of the cost. More importantly, you’ll enjoy far simpler setup and administration. Last but not least, you’ll gain access to Google’s expanding suite of continuously-improving products.

Everyone’s needs are different. If you don’t mind paying extra for complete control over your own mail server, and if you can’t live without a “universal address book”, go for hosted Exchange.

Special thanks to Andrew for inspiring this post.

  • Pete

    You forget you get a lot more email/calendar/contacts for $50/user/year. You get Instant Messaging with video in Google Talk, Google Sites, Google Docs, Google Video, Google Groups, SSO, App Engine, etc. You need to compare the entire Microsoft Stack (BPOS/BPOS-D) against Google. I guarantee if you do it you will find that Google wins in terms of features, innovation and cost by a wide margin!!!

  • JP Ren

    Pete, totally agree that Google wins out in terms of breadth of features. I neglected to mention Google Talk, Sites, etc as those weren’t “must-haves” features when we were choosing an email service.

    Most companies, for better or for worse, are still running on Outlook (even if they have Google Apps serving up the back end). I think Google Talk, Sites, etc will be more compelling for this audience as it makes its way into everyday workflow at the workplace.

  • Andrew

    Good analysis JP. The cloud is giving us lawyers some interesting new and complicated options.

  • http://Realestate77.com Jim

    Google’s lack of a functional Shared Contacts service is a deal breaker. I have a small business and have been migrating a small business with 8 users from exchange to google apps. Not having a universal contacts list is killing the plan. I am not excited about being gouged for $100s from some opportunistic developers offering third party addons for what should be CORE functionality. The Goggle Rep assured me they supported this function…bull. Anything other than having a central and shareable management of these contacts seems curiously absent from google.

  • JP Ren

    Thanks Jim. What Jim’s referring to here is a “universal address book”, where private contacts for all users are automatically synced with the server — so everyone has access to everyone else’s contacts.

    Exchange Server delivers this “universal address book” type functionality through a separate service called Active Directory. Active Directory is basically Microsoft’s proprietary server-based address book similar to LDAP (Lightweight Directory Access Protocol), which is the industry standard. Outlook also supports LDAP.

    Google Apps does have a feature called “Contact Sharing”. Warning: this is NOT THE SAME as universal contacts. “Contact Sharing” enables the sharing of all internal contact entries (i.e. contact info for everyone within your organization). More details here: http://www.google.com/support/a/bin/answer.py?hl=en&answer=47926

    So far, Google Apps’ answer to the universal contacts question has been creating a link to your company’s existing LDAP servers. This isn’t elegant, because most companies turn to Google Apps because they don’t want to run any email or contact related servers.

    As Jim mentioned, there isn’t an easy way to achieve the universal address book right now — but Google should already be working on this, as It’s probably the last major hurdle preventing some large corporations from switching to Google Apps.

  • http://geekswithblogs.net/harish Harish Pavithran

    Hi, while i like google apps, I think some of the people commenting here are right – you have to compare the whole stack not just. The Microsoft BPOS solution is 10 bucks a month per seat for SharePoint Online, Exchange Online and Web Conferencing (ala Webex) along with Secure dedicated instant messaging and online presence anywhere (in email, document sharing etc.) This is huge difference between Google and Microsoft Solutions. The Google solution is great for someone that needs a point solution for email, does not need conference room booking or does not need web conferencing solutions. In other words good for the really smally businesness that needs a plain vanila solution with no frills and is cost effective. For a more wholesome solution with a more mature offering look to Microsoft.

  • http://YourURL Mike

    I have tried to move to Google apps with a lot of frustration. The lack of real folders is tough, so we did a workaround with labels and Google Labs nested folders, but this only works for the main user. I share (delegate in Exchange terms) my email, contacts and calendar to an assistant. In Google apps the calendar works ok, but the email with the nested folders is a mess and the only way my assistant can move email from her inbox to my folders is to forward them to me and then label them! The same with contacts. With hosted exchange she can view both her contacts, folders and calendar and just drag entries to mine!!!! Sounds like most people using Google Apps do not work with a team or an assistant. I am on a Macbook and still run a virtual machine to use outlook, because I have yet to find anything close.

  • http://YourURL yoan

    I had migrated from exchange to google apps. There are some features from exchange that google doesn’t have. If you decide to move to google, you just need to learn and adjust to google apps. The good thing about google apps is that your emails cannot be lost due to a hardware failure and downtime. Trust me when when exchange crash and that you have over hundred of user on shoulder. There’s alot of pressure coming from those top dog.

  • http://YourURL Bob Gaudy

    Message tracking is terrible. If you support a medium sized business with users who are less than savy and “lose” email all the time or report odd behavior like email was delayed, etc. It’s really hard to track messages with Google Apps compared to Exchange as of right NOW.

  • http://www.digital-mr.com Chris

    Google apps seams the perfect solution.
    Google is growing and i believe it will become even better.
    Easy to set up, friendly and low cost

    Thanks for the review :)