In recent years, however, hosted Exchange services have evolved to remove many of these costs, providing a messaging system with the functions and reliability to serve Fortune 500 organizations - including integrated tools for wireless devices, anti-spam functions and compliance tools - at a price that small businesses can afford.

With the hosted Exchange service came an abundance of outsourced services targeting the small business segment. But, says Microsoft Exchange hosting provider Intermedia.NET (intermedia.net), the flood of new offerings left the mid-sized market underserved.

Already a leader in the hosted exchange space - a Microsoft Gold certified partner that introduced hosted Exchange 2007 services in December of 2006 and signed its 2000th reseller partner in March - Intermedia.NET introduced a hosted Exchange 2007 service targeting the mid market in the first week of April.

"There was an increasing interest on the part of the business world [in] higher-end Exchange 2007 solutions," says Robert E. Leibholz, VP of sales and business development for Intermedia.NET. "A lot of their clients wanted Exchange 2007, but they also wanted the reliability of SAN-based technology as well as the customization of integrated activate directory."

With the new solution, Intermedia.NET enables customers with 50 to 1,000 users to adopt a well-built and well-supported implementation of the new messaging service without the high costs that come along with in-house deployment, which Leibholz says is an industry first. The Intermedia.NET solution runs on an enterprise-grade platform with EMC storage.

"There are a couple of companies out there that have started offering Exchange 2007," says Leibholz. "And what they've done is basically shoved the entire thing on one dedicated box at a much higher price, which is not the recommended solution by Microsoft. There really is no company out there that is doing anything close to what we're doing right now."

Customers can chose from enterprise plans, which are clustered, SAN-based Exchange solutions, or custom enterprise plans, which offer dedicated Exchange servers. The plans start from $1,295 per month for up to 100 users.

For a mid-sized organization, switching from an in-house Exchange 2003 implementation to the 2007 version can carry a new set of expenses, making the upgrade period a good window for switching to an outsourced solution.

Costs for an in-house Exchange solution include multiple 64-bit servers, Exchange 2007 server licenses and end user licenses for Exchange 2007, Outlook 2007 and Windows Server 2003, for each employee.

"Because Exchange 2007 requires 64-bit, has storage requirements and is relatively complex, it's only beginning to be built in-house," says Leibholz. "The vast majority of the population is still on Exchange 2003, which is one of the reasons that we've been moving forward in this practice, because it is so much easier to go through us than to build your own."

Most mid-market companies that deploy in-house Exchange environments usually hire a full-time Exchange administrator to manage the solution. Intermedia.NET's hosted Exchange solution for mid-market companies manages the entire environment and includes all hardware and licenses within the monthly price of the hosted service.

Intermedia.NET's Exchange 2007 solution has already met with a positive response. The company has signed up several mid-market customers, including an airline, within the offering's first few weeks. Leibholz says the solution finally meets the realistic long-term needs of mid-market companies.

"This product was developed to answer the needs of more complex environments and more sophisticated businesses that have larger numbers of mailboxes," says Leibholz. "As companies get bigger and have branch offices, it's a bigger opportunity for them to use this kind of a solution."