Exchange Server Subscription Edition Pricing Breakdown
With the new version less system just around the corner, every admin and organization wants to know how the Exchange Server Subscription Edition pricing will look like.
This is to plan out the total upgrade cost and whether or not the increase justifies the value they are getting out of the new system.
Here in this write-up, we take you through scenario scenario-wise breakdown of the total cost. This simulated pricing will help plan out the best course of action. So, let us start with discussing the core changes to pricing Microsoft announced with their press release.
Exchange Server Subscription Edition Pricing Rising on 1st July 2025 with a Catch
The new price rollout is happening on 1st July because it is the date from which Microsoft begins its new Financial Year.
The price increases are as follows. The Standalone Server Licenses bump ~ 10 %. Moreover, the Core Cal Suite is increasing by 15%, whereas the enterprise Cal Suite will now cost 20% more than before. This mimics the Microsoft 365 business plan price ramp-up that went live on 1st April.
The vNext Exchange Server would be generally available for organizations as an upgrade to their existing on-premise system.
Under the version‑less model (Modern Lifecycle Policy), on‑prem customers must:
- Maintain active Software Assurance (SA) on both server licenses and CALs, or
- Cover every accessing user/device with qualifying cloud subscriptions (e.g., Microsoft 365 E3/E5)
It’s all or nothing.
Real‑World Exchange Server Subscription Edition Pricing Scenarios
Disclaimer: The below examples are illustrative estimates of real-world scenarios. Actual pricing is a factor of many different elements, such as on your licensing agreement (EA, Open, CSP, etc), region, and discounts given by licence provider partners.
Moreover, server hardware, Operating system licenses, management lab, and power, etc are NOT INCLUDED in on-premise licence calculations.
Scenario 1: Small Business (50 Users, No SA Today)
Challenge: On Exchange 2016 with no SA, must re‑license to SE.
- Server License: $700 × 1.10 = $770
- Server SA (Yr 1): $770 × 25% ≈ $193
- Ent CAL: $130 × 1.20 = $156 per user
- CAL SA (Yr 1): $156 × 25% ≈ $39 per user
Total Year 1
- Server + SA: $770 + $193 = $963
- 50 CALs + SA: 50 × ($156 + $39) = 50 × $195 = $9,750
- Grand Total: ~$10,713
How Cloud Alternative compare to Exchange Server Subscription Edition Pricing?
- Microsoft 365 E3 @ $36/user/mo → 50 × 36 × 12 = $21,600
Even though on‑prem license outlay looks lower, cloud covers hardware, patching, HA, and gives extra apps and security.
Scenario 2: Medium Business (500 Users, Active SA)
Challenge: Exchange 2019 with SA expiring soon—upgrade to SE or renew SA at higher rates.
- Server SA: $770 × 25% = $193
- CAL SA: 500 × ($156 × 25%) = 500 × $39 = $19,500
Annual SA Renewal: $193 + $19,500 = $19,693
Pre‑increase SA cost (for comparison): ~$16,425
Year‑over‑year bump: ~$3,268 (20% increase)
Cloud Alternative
- 500 × 36 × 12 = $216,000 per year
Exchange Server Subscription Edition Pricing for Large Business (3,000 Users, Active SA)
Challenge: Multiple servers (assume 4 Std) + 3,000 Ent CALs.
- Server SA: 4 × ($770 × 25%) = 4 × $193 = $772
- CAL SA: 3,000 × ($156 × 25%) = 3,000 × $39 = $117,000
Annual SA Renewal: ~$117,772
Pre‑increase SA cost: ~$98,200
Increase: ~$19,572 per year
Cloud Alternative
- 3,000 × 36 × 12 = $1,296,000 per year
Large enterprises often negotiate deep volume discounts, but even so, on‑prem maintenance costs (hardware, power, cooling, DR, staffing) aren’t included in the above—and they’re significant.
Conclusion
If you’re running Exchange on‑prem today, July 1’s increases are more than a line item—they’re a strategic signal:
- Budget for the 10% server license and 15–20% CAL suite hikes.
- Evaluate whether maintaining SA or adopting cloud‑based on‑prem rights via Microsoft 365 subscriptions makes sense.
- Factor in hardware refresh cycles, operational overhead, and compliance needs.
On‑premises server licensing is entering a new era of subscription economics. Plan now to avoid sticker shock later.