Microsoft Exchange Server Subscription Edition (SE) is now available for general release as of July 1, 2025. This marks a significant shift in how Microsoft delivers and supports its on-premises email server solution.
What Exchange Server SE Brings to Organizations
Exchange Server SE represents the future of Microsoft’s on-premises email platform. The product operates under the Modern Lifecycle Policy, meaning support continues indefinitely as long as organizations maintain current configurations. This eliminates the traditional fixed support end dates that characterized previous Exchange versions.
The subscription model introduces continuous servicing for the Exchange codebase. Microsoft will no longer release major, year-numbered versions. Instead, the platform receives ongoing updates as an evergreen product.
End of Perpetual Licensing: Microsoft has moved Exchange Server and Skype for Business Server to a subscription-only model, ending the era of year-numbered, perpetual license versions. Customers must now pay a regular subscription fee to use the software. If the subscription lapses, organizations revert to their previously purchased, now-unsupported perpetual version.
Transition and Upgrade: The transition from Exchange Server 2019 to SE is designed to be straightforward. The primary changes from the last cumulative update (CU15) for Exchange Server 2019 are:
- An updated license agreement
- A name change
- New build and version numbers
- Inclusion of all updates released since CU15
Support Implications: Exchange Server 2019 and Skype for Business Server 2019, along with their 2016 counterparts, will exit extended support on October 14, 2025. Running unsupported software is a significant risk, especially for organizations with regulatory obligations. The SE release ensures ongoing support for customers who must remain on-premises and do not wish to move to the cloud.
Pricing Changes: Microsoft has increased prices for all standalone on-premises server products (including Exchange Server SE) by 10 percent, with some license types rising by up to 20 percent. These increases do not affect Microsoft’s cloud offerings such as Exchange Online or Microsoft Teams.
Strategic Direction: The shift to subscription and the price hikes are seen by analysts as a strong signal from Microsoft encouraging customers to migrate to cloud-based solutions, especially given the limited integration with new Outlook and the end of support for older versions.
Ongoing Commitment: Despite the cloud push, Microsoft states that the SE release “demonstrates our commitment to ongoing support for scenarios where on-premises solutions remain critical,” acknowledging that some organizations cannot or will not move to the cloud for compliance, sovereignty, or operational reasons.
Technical Implementation and Compatibility
Exchange Server SE RTM functions as a cumulative update to Exchange Server 2019 CU15 or CU14. Organizations running Exchange Server 2016 or 2019 can upgrade to SE, though Exchange 2016 requires a mailbox migration process.
The upgrade process from Exchange 2019 maintains all existing features without additions or removals. No Active Directory schema changes occur (except when upgrading from CU14, which may require /PrepareAD). Installation requirements remain identical to previous versions, and existing Exchange 2019 license keys work with the initial SE deployment.
Key technical differences from Exchange 2019 CU15:
- Updated product name and branding
- Revised build and version numbers
- Updated license agreement
- Integration of post-CU15 updates
Licensing and Support Changes
The subscription model fundamentally changes how organizations approach Exchange licensing. Current Exchange 2019 keys work for initial SE installations, though Microsoft plans to introduce new keys in future updates. Organizations have 180 days to activate new installations using proper licensing.
Both Exchange Server 2016 and 2019 reach end of support on October 14, 2025. This timeline creates urgency for organizations to plan their migration to Exchange Server SE or consider moving to Exchange Online.
Why Microsoft Shifted to a Subscription Model
Microsoft’s move to a subscription model for Exchange Server aligns with their broader focus on cloud services while still providing necessary support for on-premises systems. By transitioning to a subscription structure, Microsoft ensures that organizations using Exchange Server, whether on-premises or in the cloud, receive continuous updates and patches, addressing the historical issue of on-premises versions lagging behind cloud solutions in terms of security.
The subscription model also encourages a gradual transition to the cloud, allowing customers to adopt cloud services at their own pace, without forcing the move. Although Microsoft has made adjustments to the pricing of on-premises server products, it is clear that their emphasis is on ensuring that organizations, whether cloud-based or not, receive full support, security, and updates.
At the same time, Microsoft recognizes that some organizations face challenges with cloud migration, due to regulatory, data sovereignty, or other operational considerations. For these businesses, the subscription model offers a viable solution to stay on-premises, with access to the latest security updates and ongoing support.
Deployment Options
Microsoft provides two download methods for Exchange Server SE. Organizations can access the software through the Microsoft 365 admin center or download directly from the Microsoft Download Center. The Volume Licensing Service Center (VLSC) retired in April 2024, requiring organizations to use the Microsoft 365 admin center for license management.
The standalone ISO file (ExchangeServerSE-x64.iso) includes SHA256 hash verification for security validation.
Strategic Positioning
Exchange Server SE maintains Microsoft’s commitment to supporting diverse deployment scenarios. While Exchange Online and Microsoft 365 continue receiving the latest features including Copilot integration, SE addresses scenarios where on-premises solutions remain necessary.
This release strategy acknowledges that organizations operate in different modes – cloud, on-premises, or hybrid – and need flexibility in their email infrastructure choices. Exchange Server SE provides a supported path forward for organizations requiring on-premises email capabilities while transitioning to a more sustainable support model.
The continuous servicing approach aligns Exchange Server with modern software delivery practices, providing organizations with regular updates and security patches without the disruption of major version upgrades.
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