What is the best way for email processing setup on CRM 2013 (on- premises) Set up?

We need to notify customers via CRM 2013 for some activities.
I searched regarding email processing set up, and i found two options:
1. via outlook
2. Via Exchange Server.
Tried through email router (exchange server), but it requires exchange online or SMTP for outgoing profile.
I do have exchange on premise setup, I am not sure about SMTP option.
My queries are:
> Can we configure Exchange server to work as Exchange Online?
> what other option, I can try for email Processing?
looking for your suggestions...
Thanks in advance!

If you have Exchange onPremise, then you should be able to use the email router or server side sync in combination with CRM workflows (to generate the email). This is a fairly common scenario. You do not need Exchange Online.
http://technet.microsoft.com/en-us/library/dn531109(v=crm.6).aspx
http://technet.microsoft.com/en-us/library/dn531050(v=crm.6).aspx
http://www.microsoft.com/en-us/download/details.aspx?id=40342
Regards, Donna

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