Here are some quick thoughts as to the pros and cons of Internally hosted email verses Externally hosted email.

If already have SBS Server, no big cost savings by hosting email.
It might actually cost more, but this depends on how many mail boxes are hosted, the price of the hosting, and service calls that would be related to an Internal Exchange Server that may be required.

Internal External
Pro Con Pro Con
No monthly charge Upfront labour cost to setup Reduces upfront labour cost of a new server Monthly charge for each mailbox
No limit to number of Mailboxes Additional mailboxes will cost extra
For internal emails, the Internet speed is not impacted Internal emails are sent onto the Internet
Full control over server Need additional IT Support All IT Support for email is outsourced to hosting provider Need to trust outside supplier
Problematic to change suppliers, if there is a problem.
Easy to recover from backups Backups and recovery need to be understood and practiced Backups are handled by someone else. Have to trust they are actually doing it, and need to raise a support request to get backups.
Internally, large attachments will not be a problem There will be problems/limits with the size of emails
If Internet connection goes down, internal emails will still work. If Internet connection goes down, no download or upload of emails to staff outside of office If Internet connection goes down, no download or upload of emails to office
If sustained power outage then no access to email from the outside Localized power outages do not impact access to email by mobile workforce.
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