Which one is better for your business?
Everyone knows your business needs email.
But here’s the thing… Not all email hosting solutions are created equal. As the email hosting services market size balloons by USD 54.23 billion from 2024-2028, business owners are rushing to make a decision on which route to take.
The problem is…
Too many business owners end up buried in the technical jargon and making the wrong choice. They either pay through the nose for features they don’t need or worse… they choose an email solution that can’t scale with their business.
But picking between cloud vs on-premise email hosting doesn’t have to be a headache.
In this article you’ll learn:
- Cloud Based vs On-Premise Email Hosting Explained
- Email Hosting Costs That Actually Make Sense
- Email Security Considerations
- When to Choose Cloud Email Hosting for Your Business
Cloud Based vs On-Premise Email Hosting Explained
Okay, let’s break this down…
Cloud based email hosting means your company’s email is stored on servers managed by a third party. This is like having your own reliable business email hosting solution that takes care of everything from the cloud.
On-premise email hosting means your company owns and maintains the actual email servers. This is everything is running out of your office or data center.
But here’s what most people miss…
It’s not a question
of which technology is better. It’s a question of what makes sense for your business.
Cloud based hosting has skyrocketed in popularity for good reasons. In fact, only 16% of Microsoft Exchange deployments are still on-premises as of 2023.
That’s a tidal wave shift toward the cloud and it’s not going to reverse.
Email Hosting Costs That Actually Make Sense
Alright, let’s get something straight.
The biggest misconception about email hosting is around costs.
Cloud Based Email Hosting
- Monthly subscription ($5-15 per user)
- Zero hardware costs
- Zero IT maintenance staff required
- Automatic software updates included
- Built-in backup and recovery
On-Premise Email Hosting
- Server hardware costs ($5,000-50,000+ upfront)
- Software licenses
- IT staff salaries ($60,000+ per person per year)
- Electricity and cooling
- Replacement hardware costs every 3-5 years
- Security patches and updates
Guess what…
Add it all up and the hidden costs of on-premise email hosting mean a cloud solution is typically 30-40% cheaper over 5 years. No wonder 42.5% of EU businesses have already made the switch to cloud.
Email Security Considerations
Security is a huge deal when it comes to email.
Email contains your most sensitive business communications, customer data and confidential documents.
So which option is more secure?
Cloud Email Security Advantages
- 24/7 monitoring by professional security teams
- Advanced threat protection built-in
- Automatic security updates applied
- Enterprise-grade encryption standard
- Compliance certifications (SOC 2, ISO 27001, HIPAA)
On-Premise Email Security Advantages
- Complete control over your data
- Custom security policies tailored to your needs
- No third-party access to your information
- Air-gapped systems possible for ultra-sensitive data
Truth time…
Unless you’re a bank, government agency or handling some seriously classified information… the security advantages of on-premise hosting are mostly illusory. Cloud providers spend millions on security infrastructure you can’t possibly match. Especially if you’re a SMB.
But it’s not always a slam dunk either…
Businesses that handle highly regulated data or need complete control might find the on-premise option is the only way to go due to regulatory requirements.
When to Choose Cloud Email Hosting for Your Business
Alright, cloud email hosting isn’t just hipster stuff, it’s the practical choice for most modern businesses.
Cloud Based Hosting Makes Sense For:
Growing Businesses
Need 10 new staff next month? Cloud providers can provision new email accounts in minutes. No hardware to buy. No setup hassles.
Remote Teams
Team members all over the country? Cloud email can be accessed from anywhere with internet. Perfect for remote work.
Limited IT Resources
Don’t have a full-time IT person? No worries, the cloud provider will do all the maintenance, updates and troubleshooting for you.
Budget Constraints
Startup with cashflow concerns? Cloud hosting removes big upfront investments and lets you pay as you go.
The stats are clear…
60% of enterprises are planning to move to cloud based email solutions by 2024. Don’t let business leaders sound like hipsters, they’re making this move for practical reasons.
When to Choose On-Premise Email Hosting for Your Business
Hold up, don’t go all in on the cloud…
On-premise hosting isn’t completely dead either. There are plenty of businesses out there that simply have to have the control and customizability that only on-premise can provide.
On-Premise Hosting Makes Sense For:
Government Agencies – Handling classified info needs air gapped systems
Financial Institutions – Compliance and data sovereignty demands
Healthcare Organizations – Patient privacy regs demand local control
Manufacturing Companies – Legacy system integration needs
The Control Factor
On-premise means you control:
- Data location (never leaves your facility)
- Access rules (custom policies for your org)
- Integration options (hook up to any internal system)
- Upgrade timing (do it when you want)
But you also control…
All of the headaches, costs and responsibilities that come with running email infrastructure yourself.
How to Make the Right Choice for Your Business
Decision time, which way to go?
If you’re still not sure which email hosting path to take for your business, ask yourself these questions:
- Do you have a full-time IT staff person? If no, then cloud is probably the better choice.
- Do you anticipate rapid growth? Cloud scales in seconds.
- Do you work with highly regulated data? On-premise might be necessary for compliance.
- Is uptime mission critical for your business? Cloud has better uptime SLAs.
- What is your budget for upfront costs? Cloud has zero upfront costs.
The decision making process is actually quite simple:
- Choose cloud if: You want simplicity, scalability and lower overall costs
- Choose on-premise if: You need complete control and have regulatory constraints
Most businesses fall into the first category, which is why the email hosting market is exploding and cloud adoption keeps accelerating.
The Conclusion on Cloud vs On-Premise Email Hosting
Cloud vs on-premise email hosting? Yeah, t’s over.
This isn’t really a “battle” anymore. Cloud is just kicking the pants off on premise for most applications for a reason.
Cloud based email hosting is better for most businesses because:
- Cheaper Total Cost: Over time cloud solutions are less expensive overall
- Better Security: Than what most companies can provide themselves
- Scalability: Instant scaling options for new staff and growth
- Professional Support: And maintenance from experts
On-premise hosting still has a place for ultra-secure government or financial applications, or businesses with special integration needs. But the on-premise email market is a dying breed these days.
Most companies fall into the cloud camp because modern operations just work better with a cloud email solution.
The hard truth: Unless you have special regulatory or integration requirements and unlimited IT resources, cloud based email hosting is almost always the best option.
Don’t overthink this decision. Pick the email solution that lets you focus on growing your business and not managing email servers.
That’s usually the cloud.
