Which is best for a small firm? MS Exchange Server or an Internet Service?

In 2004, we installed MS SBS 2003 on the only server we had at the time. This past October, we setup a second server with MS Windows Server 2008 Standard. The first server still houses our email, users, security groups, etc. In the next couple of months, we like to retire the old server. My question is: Should we migrate our email to the new server (which would require the purchase of MS Exchange Server and the associated licenses) or should we migrate to an internet service?

We have 24 mailboxes. Two key pieces of information – we are required to retain all client related emails for 7 years. At this time, our mailboxes require about 27GB of storage.

Any advise would be greatly appreciated.