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Difference Between Office 365 versus On-Premises Exchange Server

Published By Raj
Debasish Pramanik
Approved By Debasish Pramanik
Published On January 25th, 2024
Reading Time 6 Minutes Reading

With around 80 million paid subscribers of Office 365, the cloud migration has become a hot discussion topic incorporate. The growth of cloud services has given a new definition to more return on less investment as long as we talk about IT resources. The organizations working on Exchange services have the option of migrating to an online environment or keeping it on-premises. But the organizations should check the difference between Office 365 versus on-Premise Exchange.

When talking about organizations that manage their MS Exchange system in-house, the most important question that crosses their mind is whether migration to Office 365 will prove to be beneficial or not. Since both the cloud and on-premise Exchange have their associated pros and cons, the decision of migration is not easy.

Difference Between Office 365 vs On-Premise Exchange

With its launch in the year 2011, Office 365 has set a benchmark for the IT services for small as well as large business environments by transferring the Office on the cloud. Right from the emails to Office Apps that can be accessed from anywhere around the world, Office 365 has revolutionized the traditional workflow of the organization. In this section of Office 365, we will focus on both the pros and cons that are associated with Office 365.

Merits of Office 365 Over On-Premise Exchange

Increased Scalability – One of the biggest advantages of moving Exchange to the Cloud is that you get nearly all the basic features that are available for the on-premises Exchange platform. The offered online email storage of 50 GB can be synced with smartphones, PCs, tablets, and in Mac via ActiveSync. Microsoft gives you the provision to purchase accounts for the number of users working in your organization.

Reduced Investment – Reduced investment is another benefit that a user avails when using Office 365. There are multiple plans available for users to choose from. Moreover, either you can get Office Online or Office Suite installed on mobiles, PCs, and Mac machines (up to 5) for every license.

You also get access to services like SharePoint Online, Sway, Skype For Business, etc. for free (which you will have to pay if you use On-Premise Exchange). You can easily increase or decrease the number of account purchases depending on the number of users. This is a major difference between Office 365 versus On-Premise Exchange.

Minimal Risk Of Data Loss – Microsoft extends flawless security and invests in ensuring data authentication of its users’ organizational data. In addition to this, for extending additional security to your emails, you can add multifunctional authentication to your account. Moreover, Microsoft guarantees data safety in instances of outages or any natural disaster.

Seamless Upgradation – The users having subscriptions to Office 365 have the provision of the latest solutions for their organization. The users get access to all the enhancements of Office 365 once they are released. The productivity of the users is enhanced when accustomed to the changes. All the updates are done seamlessly, without the involvement of IT teams of the organizations.

Demerits of Office 365 Over On-Premise Exchange

No Administrative Control – The biggest demerit of subscribing to Office 365 is that the organizations lose administrative control over their data. Since the data is stored on Microsoft servers, whose location remains unknown to the users. In addition to this, the data stored on the servers might be susceptible to the law system of other countries.

Counter-Intuitive Migration – Starting with the prerequisites, the steps for complete migration from On-Premise Exchange to Office 365 is a very tedious task. In the absence of support, many corporates, which plan for the migration, end up in canceling the migration.

Reduced Flexibility With Applications – When it comes to the integration of third-party applications with Office 365, the flexibility of integration is compromised. The up-gradation is done automatically whenever the latest version of a service is introduced. Users have no control over the updations.

On-Premise Exchange Server – On-Premise Exchange server refers to the in-house Exchange servers within a company. On-Premise Exchange Server installation is a traditional way in which the organizations have worked to date with Exchange Server. Some of the associated differences between On-Premise Exchange and Office 365 are described below.

Merits Of On-Premise Exchange

Full Control On Activities – The administrator has control of the entire hardware and software configuration in your Exchange Server. The organization is responsible for the complete maintenance of the server, right from the installation to the timely upgrades. You can implement as many services as you like by purchasing them.

More Flexible Customization – Another difference between Office 365 vs On-Premise Exchange Server is that the latter ensures more flexibility as far as the integration with third-party applications is concerned. It gets easier to interconnect Exchange and other applications when hosted on the same local network.

Responsible For Data Storage – The administrators are totally responsible for making all the changes in your services. The decisions are made by the users in regards to the backup timings and their storage location. Your data is stored with you on backup tapes, online drives, or on remote servers.

Demerits of On-Premise Exchange

Chances Of Data Loss – Since the data in On-Premise Exchange is stored locally, in the instance of any disaster and in the absence of any Disaster Data Recovery plan, the entire data can be deleted.

High Investment – The biggest difference between On-Premise Exchange and Office 365 is the large investment involved in hardware, software, licensing, and the manpower for handling the server data. The initial investment is not the only thing to worry about. The timely update is a necessary factor to keep up with the current technology trends in the market.

Security Concern – The Exchange administrator needs to be proactive in order to configure network, Exchange platform, and other systems to cope with the security threats. In case the admin in the organization is not capable of doing so, the organization will have to hire professionals for doing so.

Wrapping Up

The business needs of every corporate differ according to their infrastructure, their budget, and the manpower they have. A solution, which proves to be successful for one, may turn out to be drastic for the other. Therefore, every organization based on the pros and cons of the service should decide which one to use between on-premises or exchange online for their organization. The organization should thoroughly check the differences between Office 365 and On-Premises Exchange Server.