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Cloud Computing vs. Hosting

Cloud Computing

Cloud Computing and Hosting are not the same thing. Hosting is defined as renting rack space and paying monthly for hosting your server as well as the bandwidth used. Hosting is a legacy option before Cloud Computing and you still have to account for management, disaster recovery, backup, security, and upgrades.

Let’s compare Cloud Computing for e-mail versus hosting. For both you have a project to get onto the service. With Cloud Computing you get gigabytes of storage, full use of Outlook, and SPAM filtering. In addition, you escape on-going upgrade costs, SPAM filtering, SSL certificates, and a failover plan and infrastructure for a 99.9% Service Level Agreement (geo-dispersed data centers around the world). The cost for Cloud Computing Exchange is generally less than 50% of hosting Exchange at a third-party and 70% of the cost of on-premise Exchange.

With hosting you are dependent upon unreliable and slow VPN access to Exchange as part of your environment. You still pay for upgrade, backup, SSL, and SPAM filtering. For the convenience of offsite Exchange, you are slower with the potential for similar downtime and still must deal with failover and disaster plans. For certain applications like an e-commerce web server hosted at the local rack space, this makes sense for the cheap access to bandwidth and failover generator for power failure.

However, for line of business applications like accounting, e-mail, presence, and document storage cloud computing wins hands down. Imagine having access to the data and services to run your business via the Internet, regardless if your sites have power or flooded or destroyed by natural disaster. Failover to another server or site is eliminated, as well as restore of servers in an emergency trailer. Basically, you are in disaster mode at all times and get to focus on improving business rather than worrying about the worst and paying to be an IT survivalist. While there is no silver bullet, Cloud Computing offers better reliability and lower cost than legacy Hosting.


  1. On the whole a nice differentiator in hosted vs cloud.

    I’m not sure its fair to say “You still pay for upgrade, backup, SSL, and SPAM filtering.” You’re STILL paying for it in cloud based offerings. The advantage of the cloud is that the provider achieves certain quantities of scale, and passes the savings along to the end customer. Moreover, the labor and uncertainty associated with performing maintenance tasks is reduced or eliminated, by virtue of having a SME engaged in the tasks at hand. Instead of having an Exchange expert on staff, or paying VAR rates for support, you have the benefit of the expert working at the data center, with his costs rolled up into a convenient, easy to budget monthly fee.

    • Thank you for your comment. It definitely depends upon the service as to cost, but the real underlying differentiator for Cloud is that VARs can now focus on helping clients with business aspects rather than infrastructure deployment and maintenance.

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