There's a few things to consider about mail, but they all boil down to incoming mail and outgoing mail. Incoming mail is easy to deal with whether hosted on your own or through a provider, however there are benefits of hosting your mail server locally, especially if you are running Exchange.
Pros
1) Active directory integration and ease of setup/use.
2) The mail store is local, so send/retrieving is always instantaneous, no issues with having to use cache mode or tieing up your bandwidth when you send out an attachment to your entire company and they all have to download it individually.
3) Shared contacts and calendars are easier when you can utilize the full features of Exchange and active directory.
4) You can make sure your reverse DNS is setup correctly, which is not always the case with a hosted solution.
5) If you sign up for something like Postini ($1/month/user) you now have a backup system in case your mail server goes down - your emails get queued up, you get a VERY good SPAM filtering service and you have the option for them to do archiving for a slightly higher price.
6) In all reality, your ISP should NOT be telling you how many emails per hour you can be sending. You're on a business line and you're conducting business practices. Dump them if they push back on you - however if you're using your Exchange server and not theirs, I can't imagine they'd say anything.
7) You get control over everything.
Cons
1) You get control over everything. In the wrong hands, a very bad situation. Exchange is a very "set it and forget it" application, however everyone has a tinkerer in their company and that can lead to trouble. We run Exchange 2003, and aside from updates, we haven't touched the configuration since 2003.
2) If you're sending out your newsletters/bulk emails from the same box and IP address as your day to day mail, there's a good chance your IP is going to get mistaken for a SPAMMER and you'll have to work very hard to make sure your day to day emails end up in inboxes and not junk/spam folders. In the six years we've been in business, we have not sent a single email to our user base and we still struggle with email reaching people correctly.
3) There are hardware and software expenses that are paid up front. A typical server will run about $2000-$3000. An offsite backup solution will run about $45/month per gigabyte of data. Smaller businesses can get away with something like Windows Small Business Server which integrates Active Directory and Exchange for about $1200 plus Outlook licenses for each user - however for bigger organizations the cost does add up fast.
4) You will need an IT guy or a Managed Services firm. You'll want someone responsive if anything should happen.
If it was my company/dealership, I would be hosting our email locally at our dealership or at our BDC. I wouldn't be sending our newsletter/bulk emails through that server, I'd want to keep it as "clean" as possible. I'd find a service whose sole job is to do that and who takes SPAM very seriously, like Constant Contact. The last thing you want is for your lead follow up emails to not make it to your potential customers.
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