Microsoft in September announced that the next version of its on-premises Exchange Server will be available only as a subscription-based product. What does that say about its licensing plans for Office?
Microsoft may be signaling the end of its long-standing tradition of offering Office and other enterprise software as one-time-payment licenses. During its recent Ignite technical conference, held virtually due to the pandemic, the company revealed a significant shift in its licensing strategy. Specifically, Microsoft announced that the next version of Exchange Server, the widely used on-premises email server in enterprise environments, will be available exclusively through a subscription model.
This marks a major departure from the traditional licensing approach, where customers could purchase the software outright with a single payment. Instead, future versions of Exchange will require ongoing subscription payments, aligning with Microsoft’s broader push toward cloud-based services and recurring revenue models.
Greg Taylor, Director of Product Marketing for Exchange, confirmed the change in a video released just before the Ignite event. “This is going to be a version of Exchange that will only be available with the purchase of a subscription,” Taylor stated, emphasizing that perpetual licenses will no longer be an option for this product.
The move reflects Microsoft’s evolving business strategy, which increasingly favors subscription-based offerings like Microsoft 365. By transitioning core enterprise products to this model, Microsoft aims to provide continuous updates, enhanced security, and better integration with cloud services, while also ensuring a steady revenue stream.
For organizations still relying on traditional licensing, this change may require a re-evaluation of their IT budgeting and infrastructure planning. Microsoft has not yet announced similar changes for other Office products, but this development could be a sign of things to come.
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