Control. The biggest “problem” for us was the lack of control. You no longer have access to the server itself, but instead to a Management console which will vary depending on which vendor you choose. You can no longer see logs to see if a piece of email arrived or left the server. You may or may not even have the ability to add or delete users, instead you have to request this be done for you.
Mailbox retention. Since you pay by the user, the tendency is to close a mailbox soon after an employee departs instead of keeping it open for a while to monitor for client emails.
Spam. While you have some control over Spam, you probably won’t have the control that a service like Postini or a device like Barracuda will provide. Some services barely allow access to your quarantined email or just send you notices of what is quarantined. The spam filter on our particular service was pretty lax. It kind of has to be as it is filtering email for a wide population as opposed to being tuned to a particular organization’s needs.
Scanning. A lot of companies have a multipurpose machine that scans to email. Two out of three of our scanners could not send to an external email server. We had to reconfigure them to scan to file. Even if they could scan to email, it would have gobbled up bandwidth as the attachment would have to travel out to the server and then back down to the individual. Not very efficient. Also if the method of moving files inside an office is to use email, expect more time (and bandwidth) to be spent moving those files for the same reasons.
Speed. If the client is using Outlook, expect email startup to be slower depending on how you have it configured. We had to turn on caching as Outlook was looking to the email server way too much and receiving emails with large attachments really slowed things down.
Email disclaimers. You will have limited or no control over this depending on the service you choose. We wanted to have email disclaimers everywhere, including inside of Encrypted emails, and that proved very difficult for them to do. They ended up getting it done, but it is a plain text disclaimer that has the providers name stuck in the middle. Also, the rudimentary disclaimer software they used, did not differentiate between an external and internal user so the disclaimers tended to build up in an email conversation.
Encrypted emails. Sending an encrypted email is a very unforgiving and complicated process. With our service, first you MUST put the word [ENCRYPT] in the subject line. Failure to do it exactly as shown will cause the email to go out unencrypted. The first time a recipient gets an encrypted email, they must register supplying their name, address, phone number, create a password and a pin (in case they forget the password) Problem was the clients tended to forget both password and pin. There was no way for the client to automatically recover a forgotten password and there was no way for me to change it. I had to email our hosted email providers and have them delete the users “account” and re-email the encrypted document and have the client start all over.
Network alerts. Many of our network devices were unable to provide alerts to an external email server.
Email archiving. We found out it just archived incoming emails from external sources. Check on that. I hear the Microsoft product archives both.
Disk Storage. Most providers limit the size of your Mailbox. We have some users that like to keep everything they send and receive. This could become an issue for some users. There was also no way for me to monitor the mailbox size from the management console.
Support. Depending on the service you select, you may be dealing with a re-seller as we were. We used a service called ExchangeDefender which was re-sold to us by our now former IT consultant. I suggest you stay away from them. On the flip side of that, you have services like Office 365 where you are dealing with M$. Dealing with Microsoft is no picnic, either.
As you can tell, we were never really happy with a hosted solution, but stuck with it because of the perceived cost savings. Also, with the mail server being outside the network, this can be an advantage, particularly if you have a lot of users who work outside the office or you have temperamental internet access. However, with Server Virtualization becoming mainstream, it is no longer necessary to have a separate box for the email server making it now more cost effective to bring it back in house.