Licensing Exchange Online

Exchange Online is a Microsoft-hosted service that offers most of the Exchange feature set at a fee that compares favorably to on-premises licensing costs, especially after a 50% price reduction in late 2009. Customers who are contemplating an upgrade of internal systems to Exchange Server 2010 and are comfortable with the legal and security implications of outsourcing e-mail to a third party may want to consider Exchange Online.

Exchange in the Microsoft Cloud

Largely due to competition from other cloud computing vendors, pricing for Exchange Online is exceptionally competitive and, in some cases, isn’t significantly more than Microsoft’s on-premises licensing fees. For example, over a three-year term, the cost of licensing Exchange Online (on shared, “multitenant” servers) is only about 40% higher than the cost of purchasing Exchange Server 2010 server licenses and Standard Client Access Licenses (SCALs) with Software Assurance (SA), and it is less expensive than purchasing server licenses and both Standard and Enterprise CALs (ECALs) with SA. (For a summary of Exchange on-premises licensing terms used in this article, see the sidebar “Exchange Server Licensing Terms“.) Adding in savings for hardware, system administration, power, and license compliance costs associated with on-premises systems likely tips the total cost scale in Exchange Online’s favor.