Hosted Exchange: Scalability Challenges. Microsoft Exchange is expensive to run when you have 500 mailboxes or less. The problem is the time needed to provide IT support for each mailbox. With larger systems, you commonly have one full-time support person per 1,000 or 2,000 mailboxes. But when you get to 500-mailbox systems or smaller, ratios of 50 or even 20 mailboxes per full-time support person become common.

For this reason, there should be a strong market in the coming years for the hosted version of Microsoft Exchange. This is a new offering that lets service providers offer Exchange to third parties.

How could Hosted Exchange be improved? One of its greatest shortcomings is scalability:

Rockliffe's MailSite is an example of email software used by service providers that has better scalability. You can add an arbitrary number of standard Windows machines, and they all act as a single system. Each machine is load balanced, fully active, and running email (i.e., no passive standby machines). ... David Ferris