Service Manager has a built in function to handle incoming e-mails. Unfortunately this built-in function can be challenging to configure and is also very limited. Just to mention a few limitations:
It can only handle Incidents
It doesn't handle updates to existing Work Items
It requires an SMTP server to drop e-mails as a file in a folder within Windows
Because of these limitations and the need to have a working incoming e-mail channel, the Exchange connector was developed. The Exchange Connector is able to create new Incidents or Service Requests based on incoming e-mails. It's also able to update existing Work Items. Upon creating or updating Incidents/Service Requests it can also apply a template to that record.