This happens to be the title of one of the highest rated sessions we had in our Business Productivity track at this year’s WPC. This Interactive was led by Michael van Dijken, a top subject matter expert on hosting Exchange and a member of my member of my Exchange Partner Marketing team.

As evidenced by the experience we had in the breakout room (and the feedback in the session evals), Michael drove a very compelling discussion around what it means to be an Exchange hosting partner in this new world of public and private clouds, whether offered by Microsoft or our rich eco-system of  solutions partners.

Michael did such a great job drive framing this discussion, I asked him to do a guest posting to provide you some guidance and direction if you are considering hosting Exchange 2010—whether in a public and/or private cloud—considering we are now in an age of native multi-tenancy built into the product, in a post-HMC world.

Without further ado, here’s Michael:

A few weeks ago, I once again had the pleasure of attending our annual Worldwide Partner Conference. As I’ve come to expect, this was an outstanding event, and I had the opportunity to have many great conversations with partners. As the “hosting guy” on the team, several of my conversations were with hosting service providers, and I was encouraged by the number of hosters getting ready to upgrade to Exchange 2010.

One of the questions which I found come up consistently (both in conversations and in my interactive breakout session at WPC titled “So You Want To Host Exchange?” – BP22i) was whether to deploy Exchange 2010 using the “/hosting” mode switch, or to simply use the standard configuration typical of an on-premises deployment. Given that this was such a topic of interest, I thought I’d address it here on the Exchange Partner blog. But first a little background on the subject.

With the release of Exchange 2010 SP1 earlier this year, we added a deployment option known as /hosting mode. Using this deployment option creates what can be thought of as a multi-tenant approach to hosting Exchange. In actual fact, /hosting mode uses a different Active Directory schema to create true separation between tenants – something which can obviously be very beneficial to service providers.

While this sounds like cotton candy, it should be noted that deploying using /hosting mode does have some limitations, most notably the fact that Exchange Unified Messaging is not available. There are no plans, at this time, to address this in the immediate future. You can learn more about this topic on TechNet.

Now, if you’re a service provider considering upgrading your hosting infrastructure to Exchange 2010, here’s my perspective on how to pick the right approach – it’s the same perspective I gave at WPC. Each approach has its pros and cons, and as with most things, your target customers should drive your decision. /hosting mode is an excellent approach if isolation and information privacy is of utmost concern to your target customers – but its light on a few key features as noted above. The on-premises approach delivers the features customers are asking for, but a lot of work needs to be done to the configuration to “mimic” multi-tenancy (and doesn’t ultimately achieve the same level of separation as /hosting mode).

“That’s all well and good, but what are customers asking for?” you might ask. Well, fortunately we have great research to draw from here. We know that most customers on Exchange 2003 and many on Exchange 2007 plan to upgrade to Exchange 2010 in the next several months. This is a great starting point – it means opportunity abounds. We also know that one of the primary reasons these customers cite for their desire to upgrade is so that are able to use the advanced features in Exchange 2010 – like Unified Messaging and the native archiving and discovery capabilities. So, interpreting these two pieces of information, we see that a significant portion of the opportunity is best served offering a full-featured hosted Exchange service. This perspective, by the way, resonates with service providers we’ve spoken to in recent months.

Now, there are (somewhat limited) scenarios where /hosting mode may be applicable. For example, particular regulated industries might require a high degree of tenant separation, or certain customer segments where features may not be a primary decision driver.

At this point, you’re probably asking “hasn’t Microsoft said that /hosting mode is the only way to go for service providers?” Well, yes, that has been our guidance. However, recognizing and listening to your feedback, we have started to adjust our perspective and began to articulate this at the Hosting Summit held in March. We’ll continue to do so in the coming months leading up to the release of Exchange Server 2010 SP2.

You might also be wondering how to deploy without using /hosting mode given that our published guidance is for /hosting mode. The best approach to do this today is to use a hosting automation solution, or to engage the services of a System Integrator with depth in the hosting industry (such as Implement.com). Following this approach both speeds your time to market, and offers you the confidence of a product already tested and proven in the marketplace. Check out these hosting automation solutions from the partners we work closely with:

• Parallels Automation Microsoft Exchange Service Module
• Ensim Unify Service Provider Edition
• Cortex control panel from Citrix for delivering hosted Exchange
• Extend ASP for hosting Exchange

We will also provide more guidance in due course. Stay tuned!

So, /hosting mode or standard enterprise deployment – it comes down to the needs of your customers and the market you’re trying to serve.

Michael van Dijken
Senior Product Management
Exchange Partner Marketing

No surprise, right?

You’re probably saying, “Yeah, Ian. I get it. Exchange 2010 is a solid release and customers are clamoring for it, like you’ve mentioned many times before.”

Okay, fair point.

And, following all of the energy coming out of this year’s edition of WPC around killer products you can bet your businesses on—like Lync, Office 365, Dynamics CRM, and (of course) Exchange—you probably heard this message from few other Redmondites.

For example, several Microsoft execs (including Kurt Delbene and Kirk Koenigsbauer) said as such by highlighting that you’ve helped us collectively “Exchange” more than 22 million Lotus Notes seats over the past five years. This trend has only accelerated due to the fact Exchange 2010 offers such a clear cut and powerful business value prop over Notes.

Or, how about the fact that sales of Exchange 2010 have outpaced previous releases?

I even have a personal favorite from WPC11: customers are extremely satisfied with Exchange 2010.

Wait!

“What was that last one?” you ask.

As Julia White shared in her breakout at the big show in July, “customer satisfaction is at an all-time high” and “Exchange 2010 is well ahead of previous versions of Exchange.”

Following WPC—and Julia’s session—I got a bunch of questions from you asking about where this particular fun fact originated. Well, your timing couldn’t have been better since we (your humble Exchange product management team here in Redmond) have just finished reviewing the results of our annual product satisfaction survey.

Cue the big grins!

Here’s the background: for a number of years now, Microsoft has contracted a third-party research firm to independently survey our customer base to garner insights on their true feelings about our products and whether or not we’re really delivering across a number of dimensions: value, quality, performance, ease of use, security, etc. We traditionally get the final report in the summer, around the start of our new fiscal year.

We could not be more excited (note: I avoided the “super” adjective) by the fact the report starts with a statement like “Exchange 2010 establishes a new high watermark for overall customer satisfaction and outperforms prior Exchange versions and Lotus Notes on quality and value.”

Powerful stuff, right?

So, if I were you, I’d be asking: “Great, but how can I use this to grow my business, Ian?”

Simple: Get your customers to Exchange 2010, and they will love you for it.

And, they so want to go there!

We continue to hear, this time from the aforementioned annual survey, that “an overwhelming majority of existing Exchange 2003 and Exchange 2007 customers are considering upgrading to Exchange 2010.”

If that’s not enough motivation, remember that a happy customer is a customer that is way more likely to call upon you to deploy technologies with equally impressive growth opportunities, like Lync for unified communications.

As I have blogged about before, we still have a significant amount of customers running their businesses off of technology that was conceived more than decade ago. One cannot argue that things have changed a bit in the last ten years. For example, are you still trying to find a WLAN card for that Pocket PC device of yours, so you can ActiveSync your email without a USB cable? (Funny aside, I literally just found an old SD card style Wi-Fi adaptor in my growing gadget graveyard that I bought for my Compaq iPAQ a bunch of years back.)

Doubt it.

So, get out there and have those conversations with your customers about everything Exchange 2010 can do for them. Because, you certainly don’t want a competitor of yours to show up with something like Google’s Gmail and win favor with a customer who’s comparing their own current 10+ year old infrastructure against Google’s near facsimile of the Exchange value prop from 9 years back.

But wait, there’s more!

If you still have Lotus Notes customers in your area, it’s important to know that our recently completed research found out that they are extremely unsatisfied with their lot[us] in life. We’re talking about double-digit differences in product satisfaction. This is probably no surprise to you, considering we’ve told you about those 22 million seats that have switched over the last few years.

Don’t get distracted and miss the opportunity to grab this low hanging fruit!

Especially since this same annual survey mentioned that “nearly a third of Lotus Notes users” are looking to make the switch over the next 12 months, with nearly 20% of the remaining base is “strongly considering” making the change. Nice!

Oh, and I really hope you’re not running your business on 10+ year old technology. I know it is hard enough to stay competitive in this fast paced market, but don’t let your email infrastructure hold you back from being as satisfied as your customers are/will be on Exchange 2010. This is where your benefits from attaining the new Messaging Competency, specifically the internal-use rights, can be a HUGE asset for your businesses.

The morale of this post: don’t miss out on the opportunity to benefit from this winning equation of hunger for + happiness around Exchange 2010.

And, if your customer really, really wants to move, but is encumbered by budgetary or technology limitations, consider shopping Office 365 (and Exchange Online) as a means to get them to the promise land with even less friction. Again, they’ll love you for it.

And, if it is any consolation, I will too.

Ian
Group Product Manager
Exchange Partner Marketing