This is a question asked frequently by small companies who are struggling to find an efficient way to share data and manage their increasing volumes of communications. Essentially the difference is having your email all stored on a central server and distributed from there, or being individually received by each mailbox from external sources.

An important distinction should be made: POP3 (and IMAP) is an email protocol that handles how emails are sent and received. Exchange (for the purposes of this article we will be referring to Microsoft Exchange) is a server platform that allows mail processing using any protocol.

What are the benefits of using Exchange Server?

Exchange allows a lot more than centralized email processing. It has a great many features which make flexible working more possible, and which solve a number of common office problems. One of the most useful of these is the ability to share calendars, allowing meetings to be booked without hours of communication.

Another important feature is that it allows seamless integration of a number of wireless devices. It also has great access options for mobile devices, especially Blackberries. This pairing is what has made the Blackberry the business phone of choice the world over. Other mobile phones can do it, but none do it quite so well.

What are the disadvantages of Exchange?

There are two main disadvantages, and these are cost and implementation. Setting up and maintaining Microsoft Exchange is no easy feat, and requires either the services of an in-house administrator or an outsourced IT firm.

The cost involves both the $14 per license per month fee, and the costs of setting up a server. You will need a good server with a lot of RAM and reliable, regular backups. Hosted Exchange services are available to reduce the set up costs of implementing Exchange.

What are the benefits of POP3/IMAP?

By and large, the only benefit worth speaking of is simplicity and cost effectiveness. It doesn’t require a professional to set up a POP3-based email system for 20 users (though it does require some know-how and a bit of patience), and it won’t cost you much, if anything, to do. When your business buys a domain name, you will likely get unlimited email addresses with it.

These emails will be handled by your hosting provider, and you can send and receive emails via POP3 or IMAP (another email protocol). You can use a web-based email client, or use Microsoft Outlook. However, you won’t be able to use most of the neat features of Outlook, such as calendar and to-do list sharing, mobile access, etc. These limitations will make flexible working more difficult.