Microsoft’s Exchange Server Subscription Edition now GA to replace standalone Exchange 2016 and 2019

If you’re an enterprise still hosting on-premises Exchange 2016 or Exchange 2019 email, it’s time to stop dragging your feet: Microsoft has now made Exchange Server Subscription Edition (SE) generally available to replace them.

SE is just what it sounds like: Enterprise users must soon buy subscription licenses for all users and servers. The change, now in effect, comes with an immediate 10% price hike for standalone on premises server products, as well as a 15% increase for the on-prem Core CAL Suite and a 20% increase for the on-prem Enterprise CAL Suite, effective August 1.

For Exchange Server SE, Microsoft explained, in addition to purchasing the required Server licenses and CALs, customers must also maintain an active subscription. This means purchasing either:

Cloud subscription licenses for all users and devices that access Exchange Server SE (for example, Microsoft 365 E3 or E5 licenses); or

Exchange Server SE Server licenses and CALs with Software Assurance (SA).

The tech giant will officially end support for Exchange Server 2016 and 2019 on October 14, meaning it will provide no more updates, technical help, bug fixes, or security patches.

Enterprises can continue to use Exchange Server 2016 and 2019 after end-of-life (EOL), but they do so at their own risk, the company said.

Moving to a ‘modern lifecycle policy’ with continuous service and support

“With an EOL date some 3.5 months away, this will give laggards (and those with compliance and business reasons to remain on-prem) a supported path forward,” said John Annand, digital infrastructure practice lead at Info-Tech Research Group.

Microsoft released its final cumulative update (CU) for Exchange Server 2019 in February, which means that, if customers want to keep email on-premises, they must upgrade to the SE licensing model to keep receiving support and updates. If ready to make the shift to the cloud, they can also choose Microsoft’s fully-hosted platforms Exchange Online or M365.

“Exchange SE demonstrates our commitment to ongoing support for scenarios where on-premises solutions remain critical,” Microsoft wrote in a blog post.

The good news is that SE will be governed by Microsoft’s ‘modern lifecycle policy,’ meaning it will be an evergreen product that receives continuous service and support. There will be no fixed end dates for the release, allowing customers to keep configurations fresh.

“This will create unique opportunities to simplify, streamline, and modernize the product over the coming years,” Microsoft said. 

The company said it will continue releasing Exchange SE CUs at the “same cadence” of two per calendar year, with security or hotfix updates — targeted software updates to address specific, typically critical issues that arise between CUs — released as needed.

Analysts point out that this shouldn’t be unexpected: Microsoft has been making it known for some time that it intended to end support for 2016 and 2019 Exchange editions and move to a subscription model.

But Annand pointed out that, three years ago, there were still rumored to be around 300,000 physical servers on prem with 7.3 billion mailboxes.

Of course, Microsoft wants to “see more money in the bank,” he noted, pointing to the 10% price increase on server licensing and a 15% or 20% increase on client access licensing, depending on the purchasing vehicle.

“Price increases are never welcomed by customers, and our members are no different,” Annand said. “That being said, they’re resigned to that fact of life. As long as MS continues to let them host their data locally and manage the update cycle (as opposed to updates being forced on them, as with Exchange Online), they’ll grudgingly acquiesce.”

How to upgrade to Exchange SE

The final Exchange Server 2019 update incorporates all prior security patches and introduces server-side components for Feature Flighting, an optional cloud-based service that supports immediate updating when new features become available. This can help ensure stability and security up to EOL this fall.

Microsoft advises upgrading to Exchange SE as soon as possible and decommissioning Exchange 2016 or 2019. After moving to SE, as of SE CU2, enterprises will no longer be able to also have Exchange 2016 or 2019 servers on premises.

Organizations have two upgrade options: A legacy upgrade that requires new servers, or an “in-place” upgrade (available only for Exchange 2019), which involves downloading and installing the latest upgrade package.

During this process, there can be some disruption, Microsoft said, as mailboxes will be temporarily paused; however, enterprises can plan around this by performing upgrades overnight, on the weekend, or when offices are otherwise closed.

Microsoft pointed out that the move to SE is unlike previous releases, as it does not contain a major code upgrade and does not have any major changes. No new license keys are required, no features were added or removed, no installation prerequisites were changed and there are no Active Directory schema changes.

While there’s little time left, analysts advise organizations still on Exchange 2016 or 2019 to build a migration strategy, plan extensively, and assess infrastructure needs to avoid migration headaches. Beyond budgeting for extra costs, they said, it’s also helpful to have project managers, IT personnel skilled in Exchange, and support from vendors skilled in migration available during the changeover.