Microsoft Exchange can help--if you have the right kind of business

Do I need it?
If you have less than a dozen employees, Exchange is probably more software than you need. Collaboration is important for any business, but with a small group of workers, it's easier and more cost effective to rely on old-fashioned e-mail, phone calls, and yelling across the room.

Exchange is a complex piece of software that can be challenging to set up and maintain. Exchange 2003, the most recent release, interacts with the Microsoft Active Directory service and the Microsoft Windows registry, parts of Windows that most users never venture into. To configure and manage Exchange, you need to understand how Windows works and how networks communicate with each other.

That said, Microsoft offers an exhaustive breakdown of Exchange's benefits and cost savings for small businesses that's worth reviewing if you're considering deploying Exchange.

Do I want it?
For the midsize business, Exchange provides some real advantages. As one example, let's say you want to set up a meeting with coworkers. Without Exchange, you'd probably e-mail or call to see if people can attend, make copies of handouts to pass out in the meeting, send an e-mail reminder and then, after it's all over, translate your scrawled minutes into a neatly typed document for distribution.

With Exchange, the process gets a lot easier and faster. Just send out an e-mail Meeting Request. When coworkers click to accept the invitation, the meeting time and date are automatically added to their Outlook calendars and a list of attendees is generated in your calendar. Everyone is reminded of the meeting via a pop-up window generated by Outlook. Click Meeting Workspace as you send out the invite to set up a shared space on the company intranet for people to store and access information related to the meeting. Or hold the entire meeting online, complete with chat, video, and file sharing by clicking Online Meeting.

Configure your e-mail
Use Exchange to configure your e-mail system exactly the way you want it, such as to ban certain types of file attachments or block e-mail from specific domains that send you spam. You can make these changes for everyone in your company at the same time. Exchange 2003 also has an Intelligent Message Filter, which uses Microsoft SmartScreen technology to junk spam before it reaches in-boxes.

Exchange lets groups of employees utilize Outlook's more advanced communication features. For example, public folders can be set up to share e-mail, documents, agendas, task lists, and notes related to a specific project, and this information can be accessed remotely by logging in to the server the same way you'd log in to retrieve e-mail.

Get e-mail, faxes, and voicemail in one place
Ray Felton, a Los Angeles, California-based textile designer with 17 employees, says the feature that sold him on Exchange is unified messaging, which puts each user's e-mail, voicemail and faxes into a single in-box. "With everything in one place, it's much easier to for us stay organized and on top of our deadlines," he says. "You need to add a third-party product to do this, so it's one more thing for the purchase order, but it's one of the best investments we ever made."

Felton, who spends more than half the year on the road showing his designs to potential buyers, says Exchange saves time that would be spent calling into the office voicemail system, checking several e-mail accounts, and calling people to make sure they received faxes. "Exchange pulled it all together," he adds. "It's like having an extremely efficient assistant who is always on duty."

Unified messaging services typically require hardware that connects a company's phone system to the Exchange server. They're often designed with large businesses in mind and can be costly, between $8,000 and $12,000, so you'd need a lot of very mobile employees to make this investment pay off. But unified messaging for small businesses is on the horizon. Microsoft is working to develop its own hosted service that will include e-mail, unified messaging, instant messaging, VoIP (Voice over Internet telephone service), and data-conferencing capabilities.

No word on when the hosted service will go live, but Microsoft has confirmed that unified messaging is a central focus of the next version of Exchange, code-named Exchange 12, which is expected to be released in the next two years. Also note that if you have or are considering getting VoIP, most vendors provide unified messaging. Since VoIP integrates your phone and data network, unified messaging services via VoIP are significantly less expensive than devices that need to bring together two separate data streams.

Some programs have similar features
IBM offers Lotus Notes and server software Domino, which is very similar to the Outlook/Exchange combo. But while Microsoft offers server software packages with features tailored to small businesses, Notes may appeal more to larger company users. If you have a Java programmer on staff, consider the free Apache server software teamed with Apache Java Enterprise Mail Server. The benefit of Apache, besides its cost, is that someone conversant with Java can easily customize the software to suit a business's needs.

Get the right software and hardware to get the most from Exchange
You'll want a server running Microsoft Windows Server 2003 or Microsoft Windows 2000 server operating system. You'll get the most out of Exchange if you're also using Outlook 2003, the most recent release of Microsoft's e-mail program, but Exchange supports all e-mail clients and Web-based e-mail interfaces.

The best deal for small businesses is Microsoft's Small Business Server 2003 (Standard Edition, about $500 for 5 licenses; see pricing information for more details), a suite of products that includes server operating system Windows Server 2003, Windows SharePoint Services (a collaborative Web-based tool), Exchange Server 2003 Technology, Microsoft Office Outlook 2003, and Microsoft Shared Fax Service (a desktop faxing service).

Follow the guide or hire a consultant
Setting up Exchange isn't easy, but Microsoft has an excellent how-to guide. If the project doesn't strike you as a delightful challenge, consider hiring someone to do it for you. Installing Entourage can take 4 to 10 hours, depending on the size of your network and the amount of data you need to transfer. Most consultants charge around $200 an hour for these services.

Consider outsourcing Exchange
Microsoft offers free tools to help small businesses manage Exchange. You can also outsource your entire e-mail system and avoid buying a server and software and managing the system. Hosting companies such as Intermedia and Localweb also handle e-mail backup and antivirus protection and provide whatever software you need. Costs range from $8.95 per user per month for space on a shared server to $600 for your own personal (remote) server.