Exchange Online vs. On-Premises

Connectivity and communication are very important to any business. As a respected name in IT, Microsoft’s Exchange remains the primary choice for companies looking for a complete messaging platform.

There are two versions of the MS Exchange solution (hosted and cloud), and many organizations have a hard time deciding which version to choose. The main reason is a lack of understanding of Exchange Online and On-Premises. This comparison will help you to decide whether you want to stay on-premises or want to Migrate Exchange on premise to Exchange Online and it will help you to choose which one will be more beneficial for you.

Exchange Online vs. On-Premises – Detailed Comparison

Now that you have the answer to each of these queries, let’s rank the two versions of Office 365 Exchange based on their capabilities.


When it comes to costs, Exchange Online is extremely flexible and you can pay a license for each user. If you choose Exchange On-premises, you will need to set up and maintain your Exchange server and server hardware in addition to purchasing the CALs.

However, in the long run, the cost of implementing Exchange Online can exceed on-premises maintenance. The most important factor to consider is the length of time you plan to keep your local server. 


Microsoft invests heavily in security, so you can rely on IT services. Therefore, choosing Exchange Online reduces the risk of email data loss. Also, as the server is Online, businesses can access their exchange mail server on the Virtual Cloud Desktop from anywhere with optimum security.

If you choose Exchange On-Premises, your IT department is responsible for maintaining your Exchange server 24/7.


Exchange Online high availability is backed by a 99.9% SLA and is built into the platform. However, the accessibility of Exchange on-premises is affected by server failover, existing infrastructure setup, and disaster recovery strategies. That is, it relies entirely on the IT staff of the organization.


For Enterprise E1 and E3 business plans, Office 365 Exchange Online provides a mailbox with 100GB capacity. However, Exchange On-premises allows you to define mailbox allocations according to your organization’s needs. Also, mailbox allocation is limited only by the hard disk space of the server.

Supports Public Folder

Exchange Online now supports public folders but trying to move a traditional public folder to the latest public folder in cloud storage can cause problems. Many organizations still do this because migrating public folders to the cloud takes a lot of time and resources but storing public folders on-premises carries certain risks.


Migration is another important feature that considers the battle between Office 365 vs. Exchange. During the On-Premises exchange process online, it is still a practical option to avoid challenging future compatibility issues escalation. 


Eventually, it depends on your organization’s goals and tasks. From a wider perspective, Exchange Online outperforms Exchange On-Premises in terms of features, but Exchange On-Premises cannot be rejected immediately. Whether you use the tools or manually, Exchange Online migration requires careful planning with a high degree of technical expertise. If you follow the wrong steps, you can lose irreversible and costly information.

If you don’t have much knowledge or expertise in the Migration process or have an expert team, let Apps4Rent take care of it for you. They specialize in different cloud hosting and migration services like Migrate DropBox to SharePoint and make sure all our Migration is achieved smoothly.

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