Yes, I’ve used hosted Exchange services and they work well. Just one thing–if you have network problems and don’t know it, you’ll find out after switching to hosted Exchange. For example, one client had spotty service until they increased their DSL speed and eliminated the use of a flaky wireless network.

I think this is a particularly good solution for organizations that are too small for a Windows domain–that is, fewer than ten computers.

Running Exchange isn’t the expensive part. It’s taking care of it when things go wrong. You really need software that will do block-level restores, so you can restore just a single mailbox. Otherwise you need to always keep space free on your server equal to the size of your information store, so you can restore the entire thing from backup. You need a decent UPS and the thing has to be properly configured to trigger a graceful shutdown upon power loss. Etc, etc.

HTH,

Zac