Do not confuse 3rd party email hosting with online e-mail services. The latter "provide you with free e-mail in exchange for advertising. These services make you sign up for each account separately and you cannot use your own domain name. This is not the best choice for a business because you are not working under a branded domain and there is advertising linked to your e-mail, but there are some micro-organizations that go this route." (www.allbusiness.com)
You do not need colocation hosting companies to tell you the results of not having reliable email capacities in your business - in a nutshell, no one can communicate within the office, with clients and, worse yet, with potential clients.
One of the advantages to signing up for 3rd party email hosting for small and medium sized companies include not having to pay for the expensive software and personnel to manage it. "E-mail hosting providers offer premium e-mail services on custom platforms. For a fee they will configure your e-mail, give your company its own domain name, and provide you with a large number of accounts." (www.allbusiness.com)
Another advantage is that the cost of the service, on a monthly basis, is minimal and which includes the incorporation of expensive software such as virus as well as spam protection.
If you are into micro-managing hosting server colocation providers will not recommend 3rd party email hosting. The main disadvantage of this service is that you lose control of your email capabilities to include the security of such. Even though these hosting server colocation companies have the highest degree of security, we all know "stuff happens".