Analysis: Will Australia upgrade to Exchange 2010?

If you ask Australian IT professionals what they think of Microsoft Exchange, you will generally get one of two answers.

Some like it, particularly its standardisation and integration with other Microsoft products. Others hate it, mostly due to its historically bloated desktop companion, Microsoft Outlook.

There is no middle path.

For those who hate Exchange, the business case to drop it is clear-cut. They could dump the monolithic e-mail and collaboration suite for Google's much lighter Gmail offering, which, they argue, is all that most end users really want anyway.

But for those who prefer Exchange -- and there are many valid reasons to do so -- the argument for maintaining and upgrading is a little less clear, apart from the obvious fact that it is by far the incumbent dominant player.

Since October 2009, there has been a new kid on the Microsoft block -- Exchange 2010 -- and nobody has enough experience yet to say for sure whether it'll be a triumph or another Vista-like flop.

Who has already upgraded?

Two large Australian organisations that have already upgraded to Exchange 2010 are Victoria University (VU) and brewer Lion Nathan.

As reported today on iTnews, VU has partnered with Dimension Data to roll out Exchange 2010 to tens of thousands of mailboxes.

The university's director of Information Technology Services, Phil County, says the rollout was undertaken as part of a wider unified communications strategy which is also seeing the university replace its telephone infrastructure with new Cisco IP phones.

The university is also looking to tie the Exchange upgrade to Microsoft's hosted Live@EDU student email system.

"I would see email in the future, particularly in the enterprise, moving into the cloud," says County.

Consequently, one of the "firm criteria" that County's team built into its new email infrastructure was the  flexibility to allow the IT team to choose where mailboxes were hosted in the long term.

"If we decided to go for a service offering in the future, from a user perspective they wouldn't notice," he says.

The only features of Exchange 2010 County is unimpressed with is its archiving configuration and business and metadata rules.

"The archiving is actually heaps, heaps better than it was in the past," County says, but he notes VU may still use a third-party archiving solution instead of Exchange 2010's own options.

As for the main rival option -- Gmail -- County says Exchange simply provides a higher level of maturity for enterprise-level features.

"I actually don't think Google is ready," he says, noting the migration to Google's architecture would have required a "major change" for his IT department.

Asked what advice he would pass on to other CIOs or IT managers examining a similar project, County said it was important to realise that Exchange was not simply an email system any more.

"You have to look at it as an ecosystem," he says. "You have to know what systems it interfaces with and the supporting storage area network architecture."

Australia's other early Exchange 2010 adopter is brewer Lion Nathan, which did not want to go on the record for this story. But in a case study Microsoft published in November, the brewer said it expected to save about $90,000 through reducing storage requirements and to have all of its 3,400 staff on Exchange 2010 by December 2009.

Lion Nathan carried out its implementation with the assistance of Microsoft partner JASCO Consulting.

It planned to implement Exchange 2010's database availability group (DAG) -- a new feature which combines on-site and off-site data replication to drive better availability and uptime.

The brewing group has also deployed the Unified Messaging feature of Exchange, so that users can receive their voicemails through email. Exchange 2010 also allows users to preview the text of their voicemail.

Read on for Page Two - Why upgrade?

To upgrade or not to upgrade

Microsoft Australia unified communications specialist Sandra Lee-Joe says almost all of the vendor's large Australian customers are looking at Exchange 2010, and key Microsoft partners Dimension Data and Data#3 have already conducted several implementations each that have consisted of 10,000 mailboxes or larger.

Data#3 national practice manager (Microsoft Services) Scott Gosling says much of the interest from customers has come from those engaged in merger and acquisition activity -- where systems integrations is inevitable. But the public sector is also interested, he says.

Not all of the migrations will be publicised, however.

"Exchange [as a platform] has been in the market for a long time," says Gosling. "There's some good skills in customers now. A lot of customers will do their own upgrade without any fanfare. The days of the database schema are gone."

Dimension Data Microsoft global alliance director Brian Walshe says he's been surprised by the amount of interest in Exchange 2010.

"The reality is today, anyone that is upgrading Exchange is going to go to 2010," he says.

Walshe says the launch of Outlook 2010 next week as part of the new Office 2010 will boost demand for Exchange 2010, as customers can use one platform to unlock features in the other.

Other customers are migrating from IBM's Lotus Notes or Novell GroupWise to what some now see as the best of breed product.

However, the largest factor that is driving upgrades in the sector is that most of the Exchange ecosystem in Australia is still based on Exchange 2003 rather than Exchange 2007.

Just as Windows 7 upgrades have been popular for desktops still on XP, customers on Exchange 2003 will view Exchange 2010 as the best means to solve some of their pain points with the legacy software.

But Data#3's Gosling admits there are customers that are "sitting" on Exchange 2007 as a platform and are happy with what they currently have. Examples include conservative government agencies or even retail giants like Woolworths -- which recently flagged its intention to migrate from Exchange 2003 to Exchange 2007 -- despite the availability of 2010.

Tier two banking giant Suncorp was an early adopter of Exchange 2007, but it's currently happy with its platform and doesn't see the need to upgrade.

It's a similar situation with the Queensland University of Technology. Back in 2007, the university rolled out Exchange 2007 as part of Microsoft's Rapid Deployment Program. But last month, the university's director of facilities and infrastructure Graham Keys said it was doing the initial planning and review of Exchange 2010, but would not be implementing until at least the end of 2010.

There just isn't an urgent need.

Why upgrade?

VU has been a supporter of Exchange throughout the years. But County said Exchange 2010 was the first version of the software that he considered truly enterprise-level.

"The old versions of Exchange, for example," he said, "weren't as good as you might have wanted for disaster recovery and how you could actually integrate that into your storage area networks. [Exchange] 2010 is more enterprise, more robust."

For example, County says in previous versions of Exchange, administrators had to do a lot of work creating parallel storage architectures behind the scenes to do maintenance on mailbox structure -- even though 2007 had some functionality in this area.

"It really came down to creating two different parallel structures to mirror each other," he said.

Exchange 2010 has that feature built-in, County says, as part of better disaster recovery capabilities and more flexible storage mechanisms. "[Exchange] 2010 is really hitting that mark a lot more," he says.

Exchange 2010 has a bunch of new features (most visibly, the improved Outlook Web Access), but it is this improved focus on storage that is commonly mentioned as one of the main features in the software.

"Seventy percent of any Exchange environment is probably storage," says Microsoft's Lee-Joe.

Lion Nathan, for example, is taking advantage of one of the most hyped features of Exchange 2010 -- the ability to do away with complex and expensive storage area networks and replace them with cheaper direct-attached storage units (HP StorageWorks 60 Modular Storage Arrays).

The storage area networks that were previously servicing Exchange implementations can then be re-purposed to a more useful application.

DiData's Walshe says he's also seeing an "enormous" amount of interest in Exchange 2010's new rights management rules around email, because large organisations are looking to better secure their data.

And he's also seeing user interest in some of the lesser-publicised features of the new software -- for example, its Mail Tips option. Mail Tips warns users -- before they send an email -- about pitfalls.

For example, it'll let you know if an external recipient has been added to an internal email discussion you're having, or whether you're emailing someone who's already set a holiday message and might not be around to receive it.

Read on for Page Three - Cloud adoption

Exchange on-premise for the Cloud?

Lee-Joe says she is also in discussions with many potential customers for Microsoft's hosted mail offering Exchange Online -- which is part of the software giant's broader Business Productivity Online Suite (BPOS).

Having common code with on-premises Exchange 2010 installations means some mailboxes can be hosted in the cloud, and others hosted by customers themselves. One example given by Lee-Joe was a corporation with an Australian head office, which hosted the mailboxes of its local staff internally, but let Microsoft host the mailboxes of its Asian offices in the cloud.

"We've been waiting for an ability to do this, and we finally have got it with Exchange 2010," she says.

Microsoft hasn't named any major Australian customers yet to do so, but the executive says the company is seeing more companies move to the cloud over the last three months "than ever before".

Dimension Data's Walshe says much of the interest around the cloud is coming from Lotus Notes or GroupWise customers who have struggled to get a business case through their company to migrate to Exchange, because the attitude from management was one of 'we've already got an email system that works'.

"They're now re-visiting," he said, arguing on the basis of flexibility and eliminating the need for on-premises equipment. Government agencies are also interested, although concern still exists about where data is hosted.

Walshe believes there will be a "bell curve" for cloud email adoption.

Organisations below 500 seats would be interested in the technology, he said, because they often don't have the in-house expertise to run their own email systems. Large organisations with more than 10,000 seats would also be interested -- because of the potential cost advantages around more easily scalable infrastructure.

But companies with only a few thousand staff probably had enough expertise in-house and were comfortable running on-premises solutions.

Conclusion

It's hard to quantify just how Exchange 2010 will do in Australia. But with the global financial crisis just about over for Australians and IT budgets starting to open up again, it's hard not to believe that there will be quite a few high-profile upgrades and migrations involving Exchange 2010 as the next several years roll on.

Users appear happy with the software so far, and Microsoft appears to have addressed some of the pain points that were holding Exchange back.

"They are little things, but when you add them up, they're more than the sum of their parts," says Walshe.

What do you think? Is Microsoft Exchange 2010 worth the upgrade? How does it compare with web-based email?