Consultants Corner: Special Edition - Exchange 2007 Facts (Update)


"I can feel it coming ..." It seems Exchange 2007 has been flying around the GroupWise community quite a bit these past few weeks. I like to pride myself in being just ahead of the curve in my business, having a sixth sense, if you will, to the trends. Exchange 2007 is just one such example. It all started innocently with an installation of the GroupWise 7 Exchange gateway, which brought me some hands-on with Exchange. Then ...

It was not long ago that a customer requested my team write a comparison report of other email platforms to their current GroupWise 7 system. At the time, I enlisted the aid of an consultant who had done GroupWise, Notes, and Exchange. This led to a well- written report that presented all three platforms fairly. It was this report and my discussions with a different customer that led me down the Exchange 2007 path. This customer wanted me to compare GroupWise 7 to Exchange 2007 and to compare migrating from Exchange 5.5 to GroupWise 7 or Exchange 2007.

Well, this was the second such request and my toes were tingling ... I had that feeling something was coming. So I took the project - except this time, I did all the research and writing myself from scratch. In order to make sure I was fairly representing Exchange 2007, I enlisted a friend who is my counterpart in the Exchange world, to be a technical resource and reviewer. The report turned out well, but more importantly I gained a tremendous knowledge of how Exchange 2007 works, as well as all the financials involved in implementing it. I thought I would share with you some facts about Exchange 2007 so you too can speak intelligently the next time you are asked to investigate migrating.

Building Exchange 2007

1: The Infrastructure

First up, the infrastructure: Exchange 2007 requires Active Directory. It requires that all users be in Active Directory before they can be Exchange users. This is unlike GroupWise 7, which requires eDirectory only for management - users do not need to be in eDirectory. (eDirectory can be installed on any SUSE Linux, Windows or NetWare box where GroupWise is running.) Therefore, if you do not have Active Directory fully deployed with all users in it, you will need to build Active Directory. This will require servers, the number of which depends upon the size of your organization. As part of this cost, you will need Windows 2003 servers and a Client Access License (CAL) for each user in Active Directory. Consider this and the costs.

2: x64-bit Hardware

Second, Exchange 2007 requires x64-bit hardware. This is unlike GroupWise, which can run on any x32-bit server and has the same, if not better, performance. Now most hardware in the last few years has x64 ability. But you cannot just install Exchange on your existing servers where file/print and other services are running. You first have to decide, again based upon the size of your organization, just how you will deploy Exchange. You see, with Exchange 2007 there are new Server Roles.

Exchange Server Roles

The server roles are:

1. Client Access role - acts as a proxy for Internet traffic in order to direct mail to the proper mailbox server. It handles Outlook Web Access services and mobility.

2. Mailbox role - acts as the host for user mailboxes, and core services.

3. Hub Transport role - acts as the "air traffic controller" for all internal messages between all server roles, or even between users in the same mailbox database. Message policy is enforced for all internal/external messaging, and all messages flow through this server.

4. Unified Messaging role - acts as the portal to PBX integration for all voice/fax messaging, including voice dial-in functions (only if you purchase the addition Enterprise Licensing for Exchange 2007).

5. Edge Transport role - acts as the border security to the Exchange 2007 system. This server is deployed outside the internal network, possibly in the DMZ. Typically, anti-virus/anti-Spam and links to Exchange Host Filtering are performed by this server. It cannot be deployed on the same server as the other server roles (only if you purchase the addition Enterprise Licensing for Exchange 2007).

The Mailbox server is the one server, similar to a post office in GroupWise 7, that requires special treatment for design. The number and size of databases, as well as storage, processing power and RAM, are important in order to get best performance.

The other servers do require consideration. The Hub transport is a single point of failure in an Exchange 2007 system, so providing redundancy is important. Just so you know, the Hub Transport is like a Routing Domain in GroupWise 7 - something we rarely use, because it's a single point of failure. In Exchange 2007, it's a place where policies can be applied. Users that are online with Outlook can directly access the mailbox server without the Hub Transport. Also, if you are a small organization, all three server roles may run on one server. Consider the cost of the hardware, multiple processors, large amount of RAM, etc., that you will need to support these server roles.

3. Operating System

Third on my list is the operating system. Exchange 2007 requires Windows 2003 R2 Server x64 for EACH server role. GroupWise 7 requires NetWare, or SUSE Linux, or Windows 2000/3 server. By the way, GroupWise 7 ships with all the SUSE Linux you can use for free, if GroupWise is running on it.

There are two versions of Windows 2003 R2 Server: Standard and Enterprise. Standard Edition supports 4-way symmetrical multiprocessing, while Enterprise Edition supports 8-way symmetrical multiprocessing. Standard Edition supports up to 4GB of RAM, while Enterprise supports up to 64GB of RAM. Standard is considered for work group or small organizations, whereas enterprise is for ... well, enterprise environments and applications. Therefore, you will have to purchase the Enterprise Edition of Windows 2003 R2 Server for Mailbox Server Roles in all but small environments. The other server roles can work fine with Standard Edition Windows 2003 R2 Server. But if you want to cluster any server role, Enterprise Edition is a must. Consider the cost of which Windows 2003 R2 Server Edition you will need.

4. Exchange 2007 Server Licenses

OK, let's get to number four on the list, Exchange 2007 Server Licenses. This is where things get interesting. You must purchase a server license for each Windows 2003 R2 Server that will run Exchange. GroupWise 7 licensing allows you to install on any number of servers, to infinity. And to make things more difficult, there are two editions of Exchange 2007 Server: Standard and Enterprise.

The Standard Exchange 2007 server edition is designed for small- to medium-sized organizations, whereas the Exchange 2007 Enterprise server edition is designed for large organizations. Exchange 2007 Standard allows for up to 5 Storage Groups and 5 databases per server, while the Exchange 2007 Enterprise version provides for up to 50 Storage Groups and 50 databases per server. If you have 1000 users, and you are planning for individual mailboxes to grow to 1GB in size or larger, then Enterprise Edition is a must. Now lest you think that all server roles must be Exchange 2007 Enterprise Edition, they do not have to be. The Mailbox server role again is the first likely candidate, because it houses mailboxes (aka, the databases). But the larger the organization, the more redundancy, and the more likely other server roles will require Enterprise Edition Exchange 2007. Consider the cost of each needed Exchange 2007 Server edition.

5. Exchange 2007 CAL's

Number five - I bet you thought we were done, not by a long shot. Once we have hardware, Active Directory, Windows 2003 servers, CAL licenses for Active Directory access, and Exchange Server Licenses, we still need Exchange 2007 CAL's. Yes, that is correct. Not only do you have to purchase Exchange 2007 server, but you must purchase Exchange 2007 CAL for each user that will be in the Exchange 2007 system. And GroupWise 7? Well, GroupWise 7 just requires you to purchase one license for each user in the GroupWise 7 system and no server licenses - and if you use SUSE Linux, as I stated, there's no operating system server licensing. Consider the cost of each Exchange 2007 Client Access License.

6. Outlook 2007 Client

Sixth, you must purchase the Outlook 2007 client! Get this - if you want the full feature set of Exchange 2007, you must purchase Outlook 2007 client. GroupWise 7 client? Well, it's free - just go to: and search for GroupWise 7. You can download the client and use it at home as your POP3/IMAP4 client - anyone can! For those organizations that have purchased or will purchase Office 2007, you get Outlook 2007 bundled with it. Or, you can purchase Outlook 2007 as a stand-alone product. Consider Outlook 2007 costs.

7. Optional Exchange 2007 Enterprise CAL

The seventh item is the Exchange 2007 Enterprise CAL. This is optional and an additional cost that provides for Unified Messaging, Firewall, and Antispam services, to name a few things. If you need this, consider this cost per person as well.

Summary of Requirements

Let's summarize to this point:

1. You need Active Directory fully deployed on its own servers with all users added.

2. You need x64-bit hardware.

3. You need Windows 2003 R2 Server x64 Standard or Enterprise operating systems.

4. You need Exchange 2007 Server Standard and/or Enterprise Edition for each Exchange Server Role.

5. You need Exchange 2007 Client Access License for each user in the Exchange 2007 system. You also need a Client Access License for each user in Active Directory.

6. You need the Outlook 2007 client.

7. (Optional) You might want Exchange 2007 Enterprise CAL for Unified messaging, etc.

Counting the Costs

So how does all this look when you add it up with numbers? Good question - let me do just that. Let's assume you have a 5,000 user environment. Let's further assume you have to build the Exchange 2007 from scratch - fresh - because you do if you are migrating from GroupWise OR from Exchange 5.5/2000/2003!

I will not consider any redundancy or clustering. I also will assume you have a SAN already, and all storage will be on the SAN. Another assumption is pricing. I will provide you with MSRP and prices from CDW. What I will not do is consider special volume discounting on either side of the fence - I'd be here all day! So here are a few tables to give you the picture of what it takes to build a brand new Exchange 2007 5000 user system.

Server FunctionNumber NeededHardware Unit PriceHardware Total Price

Active Directory Server2$8,712$17,424

Exchange Client Access Server1$8,712$8,712

Exchange Hub Transport Server1$8,712$8,712

Exchange Mailbox Server3$14,056$42,168

Total Hardware Price..$77,016

Table 1: Exchange 2007 Hardware Costs

ProductsNumber of Licenses RequiredMSRP Per Unit Cost/Total RequiredCDW Per Unit Cost/Total

1 Exchange 2007 Enterprise Server Edition License5$3,999/$19,995$3,932.99/$19,664.95

1 Exchange Standard CAL User License5000$67/$335,000$69.99/$349,950

1 Outlook 2007 Client License5000$109.95/$549,750$84.99/$424,950

1 Windows 2003 Server R2 Standard (x64) Edition License ( 5 CAL's, 20 CAL's Total)4$999/$3,996$959.99/$3,839.96

1 Windows 2003 Server R2 Enterprise (x64) Edition License ( 25 CAL's, 75 CAL's Total)3$3,999/$11,997$3,709.99/$11,129.97

1 Windows Server CAL's License (5000 CAL's needed minus 95 CAL's from server licenses)4905$39.95/$195,954.75$29.99/$147,100.95

Total Price .$1,116,692.70$956,635.83

Table 2: Exchange 2007 Licensing Costs

Big numbers for a new system, I would say. And I am sure many of you wonder if you will be getting a raise in pay if your organization is willing to spend this kind of money to change email platforms. Here are a few things I did not include that must be considered:

  • Administrator training must be paid for in order to support the environment.

  • End user training must be provided to teach users how to use a new interface.

  • There are implementation costs, such as hiring a consultant - or several of them.

Costs of a GroupWise 7 Implementation

So, what does it look like if we are implementing GroupWise 7 instead of Exchange 2007? There are the same assumptions as with Exchange 2007 for a 5000 user GroupWise 7 system, new installation. But wait - I will go one better. Let's look at a new GroupWise 7 system running on Windows 2003 R2 Servers versus running on SUSE Linux Enterprise Server 10.

Server FunctionNumber NeededUnit PriceTotal Price

Primary Domain and One Post Office (eDirectory for Management of GroupWise 7)1$8,363$8,363

Post Office Domain and One Post Office1$8,363$8,363

One Post Office2$8,363$16,726

Gateway Domain and One Internet Access and One WebAccess Gateway1$8,363$8,363

Total Hardware Price..$41,815

Table 3: GroupWise 7 Hardware Costs

ProductsNumber of Licenses RequiredMSRP Per Unit Cost/Total RequiredCDW Per Unit Cost/Total

1 GroupWise 7 Full License5000$143/$715,000$119.99/$599,950

1 SUSE 10 Server License5$0$0

Total Licenses/Price.$715,000$599,950

Table 2: GroupWise 7 on Linux Licensing Costs

ProductsNumber of Licenses RequiredMSRP Per Unit Cost/Total RequiredCDW Per Unit Cost/Total

1 GroupWise 7 Full License5000$143/$715,000$119.99/$599,950

1 Windows 2003 Server R2 Standard Edition License ( 5 CAL's, 20 CAL's Total)5$999/$4,995$959.99/$4,799.95

Total Licenses/Price.$719,995$604,749.95

Table 3: GroupWise 7 on Windows 2003 Server Licensing Costs

As you can see in either case, on Linux or on Windows 2003, GroupWise 7 is less expensive.


What about migrating from Exchange 5.5 to Exchange 2007? How much does that cost? Answer: More than the above numbers, for sure!

In order to migrate from Exchange 5.5 to Exchange 2007, you must first migrate to Exchange 2003. Yes, that's right. There is no "in-place" upgrade. But that's the same for Exchange 2003 to Exchange 2007 - no in-place upgrade. This is due to the changes in the databases and infrastructure of Exchange 2007. In order to migrate from Exchange 5.5 to Exchange 2003 - your first step to get to Exchange 2007 - you must move all users to Exchange 2003. Yes, that means you need to build an Exchange 2003 system for the interim migration, and it must support your environment while in the interim step. This means more hardware.

Once moved to Exchange 2003, you can then move the users to the Exchange 2007 system, the second step. This process is similar to moving mailboxes from post office to post office in GroupWise. It requires each users account to be moved. The good news is that a 3rd party provider - Quest - has a utility that will aid in the migration, at a cost.

This new utility by Quest will migrate directly from Exchange 5.5 to Exchange 2007. The Exchange Migration Wizard by Quest costs $23.67 per mailbox, according to CDW. So if you had to migrate 5000 mailboxes, it would be an additional $118,350 on top of the new Exchange 2007. Of course, I am sure there is discount pricing. The last cost would be consulting fees to migrate your organization, unless your IT team is skilled in migrations and has the time.

And what if you wanted to migrate from Exchange 5.5/2000/2003 to GroupWise 7? It would cost you nothing extra but the consulting fees, if you hired a consultant. The GroupWise 7 Migration Utility for Exchange is free. Simply build the new GroupWise 7 system and migrate the users. You can run multiple instances of the GroupWise 7 Migration Utility for Exchange in order to increase the migration process. As an example, you could have 10 Migration Utilities set up and running each migrating 500 users mailboxes. You could potentially have the migration done in one long week, depending upon the size of user mailboxes, of course. The GroupWise 7 Migration Utility for Exchange runs on a Windows workstation, so you are not limited to just a few servers for the process.

A Bit of Reading for You

First I thought you would appreciate a recent quote from this 2006 article:

"And Microsoft is likely to have a challenge converting users to Exchange 2007. According to Microsoft officials, nearly a quarter of its users migrated off Exchange 5.5 in the past year and either went to Exchange 2003 or to a competing platform. And those users that stayed with Microsoft likely won't be upgrading in the near future even if they have Software Assurance maintenance contracts that provide access to the Exchange 2007 upgrade.

However, last fall, Microsoft said it still had 16% of its installed base on Exchange 5.5, a group that would be prime candidates for an upgrade but are also being tempted by IBM/Lotus, open-source e-mail vendors and others.

The rest of the Exchange user base is spread across Exchange 2000 and 2003."

This article talks about the organizations not being in a hurry to upgrade to Exchange 2007:

Exchange Product Information:


As you can see, migrating to Exchange 2007 from Exchange 5.5 or GroupWise is a costly venture. And it will be time-consuming as well, not to mention the loss of end- user productivity as users learn a new client. On top of all of this, a truly respectable corporate officer or leader in an organization must ask himself: "Where is the return on investment?"

Now it's not always about money. Sometimes the migrations are about "resume building" for the CIO or Directory of IT or IT Staff, and sometimes it's about business processes such as a crucial application that can link into an email system. But when making a truly honest business decision, it is never justifiable to migrate from any email platform unless you can show good ROI and strong economies of scale. The fact is, less money can be spent to improve the existing system. So, if you find that "In the Air Tonight" a migration is coming, do gather your facts and figures and make an honest, informed decision.

As always, I can be reached at, if you have any comments, article ideas, or just want to help a quirky consultant support his GroupWise habit.


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