A few people have noticed that Exchange 2010 on SBS 2011 Standard edition, has Circular Logging enabled by default on the Exchange Databases. They’ve wondered why this is happening.
First up a history lesson. In SBS 2003, Exchange 2003 was configured by default to have Circular Logging disabled. This is great from a recovery perspective as it allows the Exchange database to keep log files of the email changes to the database and then later replay those log files into the last backed up copy of your database. When the inbuilt SBS 2003 Backup program ran, it would backup the log files and clear them down to zero once more. The only problem is that many users who configured their Exchange 2003 servers NEVER configured a backup. This then leads to the Exchange Log files which were located on the C: drive by default, to fill up the disk space and cause the server to crash due to low disk space on the Operating System partition.
When the SBS team were designing SBS 2008, they took this into account. The decided based on community feedback and user ineptness, that they would have Circular Logging enabled by default. This meant that the Exchange database log files would not fill up the disk space like it did with SBS 2003. This same design thought was carried through for SBS 2010 Standard edition and is what you see today. This does however limit your recovery options for a corrupt Exchange Database.
What happens is that if you run the SBS 2008 or SBS 2011 Standard backup wizards, it disables circular logging so that you can have a better chance of recovery of a corrupt mail database. If you are using other third party backup products such as StorageCraft ShadowProtect or BackupAssist, then you will want to manually go into the Exchange System Manager console and disable circular logging yourself.