So, you probably all know we've got this buzzword du jour, Software as a Service, and it even comes with its own neat-looking acronym, SaaS. Of course, Microsoft wants to muck it all up and put its own spin on it by calling its version Software Plus Services (or, occasionally, Software + Services -- does that mean we can call it S+S, or does that make it look too much like algebra?). Anyway, I like the wordplay of it all, and no matter whose terminology you choose, it really just means getting your apps off the desktop and, indeed, out of your organization.

Is this a good thing? When done right, it can be. Let's look specifically at hosted Microsoft Exchange Server services. We all know, certainly, how important email has become. And most of us have probably experienced the frustration when a corporate email system inexplicably goes down, shutting us out of important documents or other information we need to do our jobs. A recent survey by Osterman Research, commissioned by the Neverfail Group, found that organizations experience a mean of 1.6 incidents of unplanned downtime each month, with outages typically lasting around 32 minutes. The report goes on to say that "when email is unavailable it can dramatically and negatively impact user productivity, as well as corporate revenue and profitability, even for outages of just a few hours." Ouch. I hope all the CFOs out there are getting that message because the biggest reasons reported by the survey for poor email availability were resource or budgetary constraints, or email availability being placed behind too many other priorities.

How does a hosted Exchange solution help with these problems? I spoke recently to Ravi Agarwal, CEO for 123Together.com, a hosted Exchange provider, and his answer for why companies would want to use a hosted solution was simple and straightforward: "ROI -- cost, money." For starters, you don't have the costs of the Exchange software and CALs (not to mention the headache of figuring out Microsoft's licensing agreements). And you also don't have to buy hardware and pay the staff that would tend it -- not insignificant considerations. With a hosted solution not only do you save in upfront costs, but you generally pay a consistent monthly per-user fee, making budgeting simple -- your costs are predictable. Also, hosted providers have the infrastructure and the support services to build effective, highly available systems. You'll receive the benefits of high availability without the traditional costs of implementing such solutions. 123Together.com is actually willing to guarantee 100 percent uptime with its dedicated server service.

But one big problem with a hosted Exchange solution is that you connect to Exchange through the Internet -- with all of the Internet's connectivity problems, such as latency and packet loss. I spoke with Scott Cutler, executive vice president of AppRiver, another hosted Exchange provider, who reported that 40-50 percent of service calls were due to customers perceiving that the service was down, when in fact the problem was a connection failure. To fight this problem, AppRiver recently announced their partnership with Akamai Technologies to provide optimized connections with the Akamai IP Application Accelerator service. Akamai uses a technology it calls SureRoute, which involves a network of over 25,000 servers worldwide that can provide an accurate, real-time map of the Internet and therefore route traffic around trouble spots. The dramatic reduction in the volume of service calls that AppRiver received with the improved transport let the company implement this technology without increasing the cost of its service.

Another thing to think about with a hosted Exchange service is mobile device support. Agarwal said, "Mobility, from my experience, is a key driver" toward adoption of a hosted Exchange solution. Particularly in organizations that have employees with a variety of mobile devices, with different requirements for connecting to the Exchange server, outsourcing this support can relieve a good many organizational headaches. Both AppRiver and 123Together.com provide options to support BlackBerry Enterprise Server, Good Messaging Server, and Windows Mobile devices.

I also asked both companies about the ability to use unified communications (UC) with a hosted Exchange solution: Can you outsource your messaging solution and still get integrated voicemail, IM, email, presence information, fax, Web conferencing, and whatever else goes into this thing we're calling UC? Both of the providers I spoke with agreed that UC would be a little more difficult to implement with hosted Exchange, but that it is certainly possible. In fact, both companies told me that they plan to get a UC component into their solution in the coming year.

There are several reasons why organizations have proven reluctant to outsource this critical part of their operations. The biggest reason seems to be a certain level of nervousness about moving software and data outside of the company's control. Indeed, in some cases, a company might have security measures that prohibit this arrangement. Also, if a company uses a lot of homegrown, custom applications in its mail system, a hosted solution might not be practical.

Up till now, hosted Exchange solutions have largely been used by small-to-midsized businesses (SMBs), and the cost seems to be the biggest reason. Enterprises can typically afford to keep all their messaging needs inhouse, often even having Exchange-specific support staff. However, with recent developments such as AppRiver's improved transport with Akamai IP Application Accelerator and 100 percent uptime guarantees such as 123Together.com is offering, maybe the time is right for more companies to seriously consider using hosted Exchange for their messaging needs.

If you use hosted Exchange or if you think you might want to, I've got a recommendation for you. Windows IT Pro Senior Contributing Editor David Chernicoff recently wrote a commentary on his experience of switching to a hosted Exchange solution, "Hosted Applications? Know Your Provider!" From his challenging experience, he's come up with some useful tips to think about when choosing a service. Post a comment to let us know about your experiences with hosted Exchange.

Finally, here are a few other articles for you about SaaS and hosted apps: