Re: "hosted on third-party servers"
Those customers DO STILL HAVE ACCESS TO THEIR DATA. Their thinking was correct.
What they don't have is access via Outlook.com, but they still hold their own data.
This is why I have no objection to "cloud services" so long as they aren't holding my data or capable of holding it to ransom.
Whether they have SERVICE or not is another question entirely. But I'd be an idiot if I rolled out something like this without another way to access mailboxes, send and receive email etc.
Backup MX records? In-house webmail? These things should be available.
And then you question why, for instance, you're paying for an online service that - if it turns off - you run your services. And when it turns on, it's reliant on your services running. It's like hiring a chauffeur for yourself that drives your car. If he's absent, you still carry on as normal. But he can't work without your car. If the car's not working, neither of you can drive.
Why you'd want that - except as a way to throw away money for the sake of looks - I can't fathom.
I work in schools. They want us to move to cloud-based MIS services. But all the MIS providers allow you to run the "cloud service" from your in-house servers. Mainly because IT throw a fit if you suggest that ONLY the MIS provider holds your critical data and you have to pay to get it back out from them, and you're reliant on them working perfectly to do simple things like take attendance registers (legally required).
So we actually have an "MIS Online" which is an online interface to the traditional SQL database for the MIS. And you can have that hosted by the provider, or hosted by yourself. So you end up in the silly situation of having "MIS Online" being a local service that you're hosting yourself, with your data also hosted in-house.
Why would you pay the MIS provider to host AN INTERFACE to your data that requires to connect back through your firewall to get to your actual data that you're hosting in-house anyway? It's just daft.