Where's Microsoft's Hosted Exchange 2010?

Does it seem strange to anyone but me that Microsoft still isn't offering Exchange Server 2010 in its Exchange Online hosted service? I mean, wasn't this the version of Exchange that received extensive testing in a hosted environment—that being Microsoft's Live@edu program—before it was released? I would have thought, therefore, the company would have been quick to offer its latest and greatest mail server as part of its hosted platform, making it a part of Microsoft Business Productivity Online Standard Suite (BPOS). Yet here we are nine months after the release of the on-premises, software version of Exchange 2010, and there's no word on when Exchange 2010 will make its official Microsoft debut online.

I had a discussion recently with Exchange expert Tony Redmond, and as he pointed out, there's nothing new about Exchange hosting—many companies have been offering such services for 10 years or more. Of course, these companies have for a long time been frustrated because they felt, as Redmond said, "Microsoft wouldn't take them seriously." As a result, the hosting companies "had to come up with all sorts of innovative ways of getting around requirements like address book segmentation . . . rolling out platforms that would allow different companies to take advantage of shared platforms," Redmond said.

But then Microsoft itself got in the hosting game. In addition to in many ways legitimizing the space in the minds of consumers, this move has had a definite effect on Microsoft's development. As Redmond said, Microsoft has "had to live for the last while with all of the inadequacies of their software for the hosted platform. So they've found out all the pain points themselves that the hosting providers have had to live with for years and years and years, and it's a result of that that you see all the engineering effort now going in to make SharePoint and Exchange more amenable to the hosting provider."

You can probably look at the web-based Exchange Control Panel (ECP) as a first big step in this direction. Most hosting providers offer their own management console, which is typically a web-based console with access locked down to the client's specific accounts and functionality. Because of the shared Exchange environment you'll find in most hosted scenarios (assuming you don't go the extra expense of getting a dedicated Exchange setup), giving customers access to the full Exchange management tools, such as Exchange Management Shell (EMS), is obviously a good way to wreck the whole system. A tool such as ECP, in addition to giving anywhere access to Exchange administrative functions, can perhaps also be the basis for Microsoft's own hosted management console of the future.

In addition to the ongoing engineering effort to make Exchange even better suited for running in a hosted environment, there is perhaps one more key factor delaying Microsoft's upgrade to Exchange 2010 on its own hosted platform: the migration issue. Microsoft has now been offering hosted Exchange 2007 commercially for nearly two years and presumably has many customers online with a multitude of mailboxes and lots and lots of data. Just like every other company that decides to upgrade to Exchange 2010, Microsoft now has to deal with moving all those accounts and data for their hosted customers—and remember, there's no in-place upgrade option to Exchange 2010. D'oh!

Microsoft has not yet said publicly when Exchange 2010 will be available in Exchange Online and BPOS, although expectation is that it will be before the end of the year, probably in the October/November timeframe. Microsoft's website has this to say about the benefits of hosted Exchange 2010: "Exchange Online subscribers will be able to enjoy these [Exchange 2010] enhancements without the effort required for an on-premises server upgrade. This is one of the key benefits of an online service—you can give your users access to the latest Exchange capabilities with minimal effort." Good in theory, but so far Microsoft is failing to deliver these latest capabilities.


Related Reading:

Microsoft Pushes Hybrid Cloud Vision at TechEd 2010

Moving Exchange to the Cloud, Part 1

Hosted Exchange Server Makes More Sense Than Ever

Exchange 14 and the Cloud