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.
Table of Contents
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. Find Exchange Server Version you currently have on-premise.
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 license provider partners.
Also Read: Microsoft Exchange 2016 and 2019 End of Life Date is Live
Moreover, server hardware, Operating system licenses, management lab, and power, etc are NOT INCLUDED in on-premise license 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.
Check Out: Steps to Import MBOX to Exchange and Exchange Online
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. However, in a recent update Microsoft has announced the end of EA volume licensing price discounts. So you may want to recalculate the costs.
Exchange SE vs O365 Cloud: Aspects Measured
| Aspect | On-Premises (Exchange SE) | Cloud (Microsoft 365 E3/E5) |
| Upfront Cost | Lower for licenses; higher for hardware/setup | Subscription-based; no hardware investment |
| Ongoing Maintenance | Requires SA (~25% annually); manual patching, backups | Automatic updates, built-in HA/DR |
| Features | Core email and compliance; customizable | Full suite (email, collaboration, AI tools); scalable |
| Security/Compliance | Strong, but depends on self-managed systems | Automated Advanced threat protection; easier audits |
| Best For | Data sovereignty requires existing infrastructure. | Agility, remote work, and cost predictability |
Cloud often wins on TCO for most, but on-premises suits regulated industries.
Moreover, after seeing the price breakdown, no matter what you choose, staying on-premise or moving to the cloud, we have a solution for you. Try the SysTools Exchange Migration software today.
Get the demo version and see how easy it is to move the data via this tool.
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. (This was delayed to August 1st 2025).
- 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.
Frequently Asked Questions
Q. What happens if my SA lapses?
You lose access to updates and must repurchase licenses at current (higher) prices to regain compliance.
Q. Can I mix Standard and Enterprise CALs?
Yes, but Enterprise CALs are needed for advanced features like unified messaging.
Q. Is Exchange SE free if I have M365 E3/E5?
No, but those subscriptions grant rights to run on-premises Exchange for hybrid scenarios.
Q. How do I upgrade to SE?
It’s an in-place upgrade from 2019; download from the Volume Licensing Service Center.
Q. Are there discounts for nonprofits/education?
Yes, special pricing applies. Talk to your Microsoft representative.
Q. What’s the TCO difference long-term?
Studies show the cloud can save 20-40% over 5 years due to reduced ops costs.
Q. Does SE support hybrid with Exchange Online?
Absolutely, you can setup coexistence during migration.
For more details, visit Microsoft’s official Exchange SE resources.