Microsoft Exchange Online Vs On-Premise: Which Is Best For Your Business?
  • Home
  • Blog
  • Microsoft Exchange Online Vs On-Premise: Which Is Best For Your Business?

Microsoft Exchange Online Vs On-Premise: Which Is Best For Your Business?

Are the days of the on-premise email server almost over? Join TMB as we pit Microsoft Exchange online vs on-premise.

As annoying as email can be when used improperly, and despite the fact it’s the leading channel for cyber crime, it’s an essential part of doing business. So how you get your emails served to your organisation is a big decision: do you opt for your own server, or do you move it all to the cloud, using Microsoft Exchange Online?

Let’s look at each of these in turn.

Microsoft Exchange On-premise Advantages

Full Control

When you deploy Microsoft Exchange on premise, it’s installed on your own hardware and configured however you want. You have full control over where it’s hosted, when it’s updated – everything.

Performance And Speed

Because you’re not relying on someone else’s hardware and because emails can be stored and served locally, an on-premise Exchange can be faster than an online one.

Customise It

Having full control means you have the freedom to customise your Exchange. You can even modify its behaviour with third-party plugins, if you want.

Low Ongoing Costs

Once it’s set up, there are no subscription fees to pay.

Microsoft Exchange On-premise Disadvantages

Possible Downtime

With an on-site server, you are responsible for the hardware and the configuration of software. If anything goes wrong with either, then you could experience downtime, and it will be up to you to get things on track again.


To help avoid downtime, you will need to make sure that your email server and your copy of Exchange are both maintained and kept up to date.

Requires Expertise

With an on-premise Exchange, you will need someone who is capable of monitoring and operating your server. That could mean hiring an in-house specialist or using an external supplier.

High Up-front Costs

Servers are not cheap. It can easily cost several thousand pounds to buy one and to keep it working.

Space And Energy

Servers can be big, bulky things, and they need to be powered, which will add to your expenses.


Adding multi-factor authentication is only possible with a third-party addon.

2-factor authentication comes included with Exchange Online


Microsoft Exchange Online Advantages


Microsoft offers guaranteed uptime of 99%, so your service should be there practically any time you need it.

Predictable Costs

Because Exchange Online is a subscription service, you have low up-front costs and your monthly expenditure on your email service is easy to predict.

No Server Needed

You don’t need to buy or maintain your own server, which will save you time and money.

Always Up To Date

As a cloud service, you don’t have to worry about updates for Exchange Online, because Microsoft will take care of them automatically.

Scale At Speed

Setting up new mailboxes in Exchange Online is quick and easy. If your business is growing quickly or your staff turnover is high, this flexibility can be invaluable.


Exchange Online offers multi-factor authentication, which significantly cuts the chance of people gaining unauthorised access to your user accounts.

Office 365

Although you can sign up to Exchange Online on its own, it also comes as part of most Office 365 business plans. 

Exchange Online Disadvantages

Lack Of Control

Inevitably, you giving up some control when using a cloud service of any kind. You can’t usually determine where your data is hosted or on which hardware, for example.

Ongoing Costs

Although you will save money not having to buy a server, Exchange Online comes with ongoing fees. Depending on the size of your business, it might work out more expensive than an on-premise server.

Regulatory Compliance

In some cases, Exchange Online might not be compliant with certain regulations. For example, if your business is related to national security, you will need to check to see if Exchange Online complies with any restrictions that are placed on you.

Microsoft Exchange Online Vs On-Premise: The Outcome

For the majority of businesses, the benefits of Exchange Online far outweigh any drawbacks. It’s fast, convenient and affordable. There are, of course, good reasons why you might want or need an on-premise server instead, particularly if you have strict security requirements.

But probably the best solution of all is a hybrid deployment. So rather than Exchange Online vs on-premise, it’s a matter of Exchange Online and on-premise. That way you get the advantages of both systems.

It's also important to remember that neither Exchange Online nor Exchange on-premise comes with backup by default. There are some undelete functions, which people often mistake for backup, but they don't offer long retention times or features to stop accidental overwriting. Whichever deployment type you use, you should make sure you have a backup and disaster revovery solution and/or Office 365 backup

If you’re unsure which kind of deployment is right for you, please contact TMB, by emailing, or call 0333 900 9050. 

Download Our Reference Sheet

Click the image below to view and download our quick-view reference sheet listing the pros and cons of Microsoft Exchange Online vs on-premise.

microsoft exchange online vs on premise comparison


Download The TMB Guide To Cyber Security Now!

Recent Posts

Follow Us