In-Depth Guide on Microsoft Exchange Server Subscription Edition (SE) Licensing

Microsoft Exchange Server Subscription Edition (SE) introduces a new licensing model that differs significantly from previous on-premises Exchange Server versions. It is designed to offer flexibility while aligning with modern Microsoft services that emphasize cloud integration. Below is an in-depth look at Exchange Server SE licensing, covering key aspects such as license types, subscription models, pricing, and upgrade paths.

1. Licensing Structure of Exchange Server Subscription Edition (SE)

Exchange Server SE adopts a subscription-based model, which means users need to pay for annual subscriptions rather than a one-time perpetual license. This aligns with Microsoft's broader strategy of offering subscription-based services, providing users with continuous access to the latest features and security updates as long as their subscription is active.

The license structure will be akin to the SharePoint Server Subscription Edition (SE), which was introduced with similar terms. It includes the following key components:

1.1. Subscription License Model

• Exchange Server SE will require subscription licenses for both the server and users. The key components are:Server License: This license covers the installation of Exchange Server on a physical or virtual machine. The server license is required for each server instance running Exchange Server SE.User License: User licenses are required for each individual or device that accesses the Exchange Server. These licenses are tied to the specific users or devices in an organization that use the mail and calendaring features of Exchange Server.Active Software Assurance (SA) is an essential component for both licenses. Customers who have active SA will continue to receive new versions and updates as part of their subscription.

1.2. Software Assurance (SA)

• Software Assurance (SA) is an add-on that can be applied to licenses, allowing organizations to receive benefits such as version upgrades and access to new features as they are released.
• If an organization’s SA lapses, they lose the right to Exchange Server SE but retain the rights to Exchange Server 2019 (the last perpetual version).

2. Key Licensing Changes from Previous Versions of Exchange Server

Exchange Server SE represents a major shift from the previous licensing structure used for Exchange Server 2019. Here are the most important changes:

2.1. Transition to Subscription Licensing

• Subscription vs. Perpetual Licenses: Unlike Exchange Server 2019, which used a traditional perpetual licensing model where you pay once for the software, Exchange Server SE operates on a subscription basis. This means that instead of purchasing a perpetual license with optional Software Assurance, organizations will pay annually to retain access to Exchange Server SE.
• Continuous Updates and Support: One of the advantages of a subscription-based model is continuous updates and patches, as long as the subscription remains active. This replaces the need for manual updates and the traditional upgrade process.

2.2. Removal of Coexistence with Older Versions

• In Exchange Server SE, Microsoft will remove support for coexistence with older versions like Exchange 2013. This means organizations still running older versions (such as Exchange 2013 or even Exchange 2016) will need to migrate to Exchange Server SE or another supported version to ensure continued support.

3. Subscription Licensing for Exchange Server SE

The Exchange Server SE licensing follows the same model as SharePoint Server SE, with a focus on subscription-based services and cloud integration. This means:

• Annual Subscription Fees:
• Licensing Tiers:

4. Exchange Server SE Licensing Options

Microsoft will provide several licensing options for Exchange Server SE to cater to different organizational needs.

4.1. Server License

This license is required for each server instance running Exchange Server SE.

• The server license is likely priced per physical or virtual server running Exchange Server.
• For on-premises environments, organizations need a separate server license for each instance of Exchange Server SE that is deployed.

4.2. Client Access Licenses (CALs)

For Exchange Server SE, Client Access Licenses (CALs) will still be required for each individual or device that accesses Exchange. However, there are some changes in how CALs are managed:

• User CALs: These are licenses assigned to individual users who access the Exchange Server to send, receive, and store emails.
• Device CALs: Alternatively, organizations can use device CALs for each device that accesses the server. This can be beneficial in environments with shared devices.

The CALs can be either standard or enterprise types depending on the features required, with Enterprise CALs offering additional features such as advanced security and compliance tools.

4.3. Software Assurance (SA)

Organizations that want access to new versions, updates, and additional features will need to have active Software Assurance for their licenses. Software Assurance ensures continuous updates, including the biannual cumulative updates (CUs) and the major version upgrades.

• If the Software Assurance expires, the organization will lose access to Exchange Server SE but can continue to use Exchange Server 2019 under their previous rights.
• Software Assurance benefits include:
• Version Upgrades: Access to future Exchange Server versions released during the subscription period.
• Support: 24/7 support for troubleshooting and incident resolution.
• New Features: Access to new features and updates as soon as they are available.

5. Upgrading to Exchange Server SE

5.1. In-Place Upgrade

The in-place upgrade is the simplest and most efficient way to move from Exchange Server 2019 to Exchange Server SE. The process is expected to be similar to applying a Cumulative Update (CU) in the previous version, which makes it easier for administrators to handle the migration.

• The in-place upgrade can be done without the need for new hardware, reducing the costs associated with migrating to the new version.
• However, Exchange 2016 users will first need to migrate to Exchange 2019 before performing the in-place upgrade to Exchange Server SE.

5.2. Legacy Upgrade

For environments that need more substantial changes, such as hardware refresh or operating system upgrade, a legacy upgrade process will be necessary. This involves building new infrastructure, migrating mailboxes, and reconfiguring namespaces. Although it is a more complex approach, it will still be supported in Exchange Server SE.

6. Summary of Exchange Server SE Licensing Key Points

• Subscription Licensing: Exchange Server SE will be available through annual subscriptions for both the server and user licenses, offering continuous updates and security patches.
• Active Software Assurance (SA) is required to access Exchange Server SE, providing benefits like future upgrades, 24/7 support, and more.
• Coexistence: No coexistence with Exchange 2013 or earlier versions of Exchange, so organizations will need to migrate sooner.
• Upgrade Paths: Organizations can perform an in-place upgrade from Exchange 2019, or use a legacy upgrade if starting from Exchange 2016.
• User and Device CALs: These licenses are still required for each user or device accessing the server. There will likely be Enterprise CALs for additional features.

This transition to a subscription-based model for Exchange Server SE represents a shift towards cloud-centric, ongoing service updates. Organizations will need to plan carefully to adopt this new model while ensuring seamless migrations from previous versions.