Directory Ties Cloud Customers to Exchange Server

• Customers who move all their mailboxes into Exchange Online may still need Exchange servers to manage directories.
• The costs of the servers will jump this year.
• Directory management tools other than Exchange Server are extremely limited or not supported by Microsoft.
• A better long-term solution will have to wait for directory improvements.

Many Exchange Online customers hoped to shrink infrastructure costs and staff levels by moving Exchange Server mailboxes to the cloud. Years later, customers often find they have drastically reduced Exchange Server costs and maintenance, but not to zero. Most still need Exchange Server to manage user accounts and other directory data on-premises.

Why Exchange Online Needs Exchange Server

Most Exchange Online customers still use Windows Server Active Directory (AD) to control access to on-premises PCs, file servers, and other resources. They regularly sync user accounts and other directory data between AD and Entra ID, Microsoft’s could directory. Directory sync simplifies access management by keep the user’s password, group memberships, and other attributes the same on-premises as in the cloud.