Family Owned & Operated Since 1994. 

A Trusted Technology Partner & IT Resource.

Thank you for considering inSync as your IT Partner.  We appreciate the opportunity to present our IT support & services skillset, & how we set ourselves apart from other IT providers.


Serving Los Angeles, Orange County, San Diego & Riverside Counties

Email:  Karen Bessette

Corporate:  (949) 837-5000​

Contact Us

inSync Computer Solutions

Corporate Headquarters:

23272 Mill Creek Drive, Suite 110  Laguna Hill, California  92653

  • karenb092

Microsoft Office 365 - How to Migrate from the Cloud back to an On-Premise Exchange

So it's always interesting that our engineers are pro-O365 and I am not. I am the CFO of inSync. Since I have experience in Microsoft licensing for over 25 years - I have watched Microsoft's pricing model evolve from an aggressive upgrade path, to purchasing brand new licenses, & now to the Cloud and Office 365.

The reason for the big push to the Cloud & Software As A Service - repetitive revenue. Despite the fact that I have proved to our engineers that Cloud solutions are often 4 times as much as on-premise solutions, and that problems do not go away with the Cloud - they just introduce different types of problems, they still prefer O365. I prefer the money.

And, let's not forget, that your email is often a legal tool that can be instrumental in defending against a lawsuit. So if you're on E1 licenses, your email is not being saved long-term. E3 licenses have legal hold which is $20/month/user. Barracuda has an archiving solution for O365 which can allow you to downgrade from an E3 to an E1 license. It's all about saving money and making sure your email is protected, secured & archived.

And, on the face of it, O365 sounds reasonable until you do the math. Our server solutions are 5 year solutions because it lasts the life of a server. And, if you're a typical business, every 5 years you upgrade your server for file & print, accounting applications, Exchange Email...

The Pricing Difference between O365 & On-Premise Exchange:

On-Premise Microsoft Exchange - A Five Year Solution

Microsoft Exchange User License $ 80/user or $4,000 for 50 users

Microsoft Exchange Server License $878/server

Microsoft Windows Updates $145 * 12 months * 5 = $8,700 over 5 Years

Barracuda - Mail Security & Antispam = $20/User/Year or $1000/Year or $5,000 over 5 years

Exchange On Premise

Total Cost For 50 Users Over 5 Years:

$18,578 Over 5 Years or $3,715.60/Year

Total Cost Of O365 with E3 Legal Hold Licenses

$20/user/month x 50 Users: $12,000/year or $60,000 over 5 Years

Barracuda - Mail Security & Antispam = $20/User/Year or $1000/Year or $5,000 over 5 years

$65,000 Over 5 Years or $13,000/Year

Is it any wonder that Microsoft is pushing the Cloud?

And there are no guarantees that, in the next 5 years, Microsoft's rates will not increase.

For the on-premise solutions, a server is required but the typical small business already has a server in their office. So it may require more RAM & hard drives, but it is minimal compared to O365 in the Cloud. And if you have more users, the difference just gets more lopsided.

Are you already in O365? Manage your licenses carefully.

Every time we review new clients' O365 billing, it is 30% to 100% higher than it should be because, internally, they are not managing employee turnover, or administrators are creating mailboxes for a conference room, accounts payable...on top of their personal email. The name of the game is to get that monthly cost down to a minimum!

Getting Out of Office 365

So when I explained to my clients that we could save a fair amount of money over a 5 year period plus they gained more control over their email, they were in. They wanted the on-premise solution.

Microsoft Office 365 to Exchange On-Premise (NOT HYBRID)

What Microsoft fails to tell new customers is, once you're in O365, it's very difficult to migrate your data back to a on-premise Exchange server. In fact, there is no prescribed method from Microsoft to migrate from O365 to an on-premise solution.

The options presented: Stay in O365, recreate a new domain and users, or create a “Hybrid” environment where we could manage on-premise accounts and mailboxes through Office 365. Well we didn’t want to do any of those things. Our client wanted to get rid 100% out of the cloud and manage everything internally on the domain. We spent weeks doing research and designed a fail-safe plan to migrate about 140 accounts with roughly 60-75 GB of email each.

Usually the most troubling part of an exercise like this is downtime. How long will each user be down? Can it be done with zero downtime? Ultimately, we decided migrating PSTs would be too slow due to mailbox sizes. We decided to pursue a direct migration from O365 to the on-premise Exchange server. If we set the client up in a “Hybrid” configuration then we could perform a direct migration without the PST copying.

The Leap of Faith

We did some research and found a tool from a company named CodeTwo which allowed an administrator to move an account either to the O365 or back to an on-premise solution without the use of complex PowerShell commands and scripts. Given that we wanted this process to move a smoothly as possible, we tested the tool.

The CodeTwo tool only worked in a properly configured Hybrid Exchange environment. If you are unfamiliar with Hybrid Exchange, please take a look at the following:

The first problem we faced bringing these accounts down from O365 was that we could not do a 1:1 mapping with accounts already created. These users had an AD profile and an Office 365 account but the tool wouldn’t migrate between them because it needs to create a user. At this point we needed to get creative with our methodology.

Instead of mapping “” in O365 to “” on-premise, we migrated it instead to a with a new user Bob2. This allowed us to migrate the entire mailbox of from the Cloud to Bob2 to on- premise Exhange.

We then needed to connect the new mailbox of Bob2 to the old AD account Bob. Exchange recovers mailboxes based on defaults & keeps disabled mailboxes for 30 days. This allowed us to “Disable” both accounts which would detach the mailbox from Bob2, and use the connect-a-mailbox feature to rejoin it back to Bob’s original profile.


We had a process that was moving the migration right along. At this point we created the new mapping required, & began breaking the employees into batches to handle at separate times.

Lessons Learned

The only other problem was the Non-Delivery Report errors. Outlook remembers and stores an email address using an x500 record. O365 utilized a different Exchange DN than the on-premise server. This causes issues when trying to reply or send to a auto completed email address.

In order to stop this problem, we had to add each employees legacy Exchange DN to their email addresses as an x500 address. Once that was done, there were no more issues and all users were successfully brought out of the cloud into an self-hosted Exchange.

Take that Microsoft! #o365 #microsoft365 #leavingO365 #howtoleaveo365