Costs associated with Exchange and email systems

We now live in the day and age of outsourcing.  With platforms such as Office365 offering no only email but also SharePoint and Lync services for as little as $10 per month, outsourcing email and other services appears very attractive.  More than one IT manager has asked me recently what does their email system really cost.

As a guesstimate, I typically tell people their email system probably costs between $10 and $15 per mailbox per month to operate.  Operating your own email system has a number of advantages that are hard to quantify including flexibility and possibly more timely resolution of issues.  The "outsourcing" costs are a bit misleading because if you move to a hosted provider, chances are you will still need someone on staff with email and client software skills. After all, the problems such as "Outlook won't load" and "My rules are not working" are not going away.   So that has to be factored in to any potential cost savings.

  Typically, the biggest cost factor for any email system is the labor involved in setting it up and running it. Usually 45-55% of the overall cost of the email system is the administrators.

  Some other factors to calculate include:

• Software licensing costs including acquisition and annual maintenance 
• Don't forget software such as backup, antivirus, monitoring, etc... 
• Hardware costs including acquisitions costs and annual maintenance
• Overhead associated purchasing hardware and software.  If you decide to buy 10 servers, someone has to process the paperwork, pay the invoices, accept deliveries, inventory the new equipment, put it in a rack, run cables, etc...
• Air conditioning/cooling.  Did you think of that?  In Hawaii, our electricity is around US$0.33/KWh.  It costs around $600 to keep a 2U server at 72 degrees F year round. 
• Power:  A 2U server with a couple of TB of local disk space costs around $700 to power for on year. 
• Floor space?  What is the annual rent/lease cost for a rack full of equipment?  This is probably negligible in most cities, but in some cities with extremely expensive rents this may be a factor.