Upcoming Price Increase and Changes to Microsoft On-Prem Server Licensing

Microsoft has announced significant licensing and pricing changes for its on-premises server products, effective July 1, 2025. These updates will impact organizations relying on Exchange Server, Skype for Business Server, and SharePoint Server. As the software asset management (SAM) landscape evolves, understanding these changes is crucial for maintaining compliance and optimizing costs. 

What’s Changing?

1. Introduction of Subscription Editions

Microsoft is transitioning from traditional perpetual licensing to a subscription-based model for its on-premises server products: 

• Exchange Server Subscription Edition (SE)
• Skype for Business Server Subscription Edition

These Subscription Editions will adopt the Modern Lifecycle Policy, providing regular updates without the need for major version upgrades. To deploy these editions, organizations must have active Software Assurance (SA) or cloud subscription licenses for all users and devices accessing the servers.  

2. Price Increases

Effective July 1, 2025, Microsoft will implement the following price adjustments: 

• 10% increase for standalone on-premises server products: Exchange Server, Skype for Business Server, and SharePoint Server. 
• 15% increase for the Core Client Access License (CAL) Suite.
• 20% increase for the Enterprise CAL Suite.

These changes apply exclusively to on-premises versions and do not affect pricing for SharePoint Online, Exchange Online, or Microsoft Teams.  

Implications for Your Organization

These updates signify a strategic shift by Microsoft towards subscription-based licensing, even for on-premises deployments. Organizations must assess their current infrastructure and licensing agreements to determine the best path forward.

Considerations:

• Budget Impact: The upcoming price increases necessitate a review of IT budgets and potential reallocation of resources. 
• Licensing Compliance: Ensuring that all users and devices have appropriate SA or cloud subscription licenses is critical to remain compliant. 
• Upgrade Planning: Organizations using older versions of Exchange or Skype for Business Server should plan for migration to the Subscription Editions to benefit from ongoing support and updates. 

How Licenseware Can Help

At Licenseware, we specialize in providing modular, on-demand SAM tools that help organizations navigate complex licensing landscapes. Our solutions offer:

• Automated License Assessments: Quickly identify compliance gaps and optimization opportunities.
• Cost Analysis: Evaluate the financial impact of licensing changes and explore cost-saving strategies.
• Migration Planning: Develop informed strategies for transitioning to new licensing models or cloud-based solutions.

By leveraging Licenseware’s tools, organizations can make data-driven decisions to adapt to Microsoft’s evolving licensing frameworks effectively.

Next Steps

To prepare for the upcoming changes:

1. Audit Current Licenses: Review existing licenses to identify which products and versions are in use.
2. Evaluate SA and Subscription Needs: Determine the necessity of Software Assurance or cloud subscriptions for your organization. 
3. Plan for Budget Adjustments: Incorporate the anticipated price increases into your financial planning. 
4. Consult with Experts: Engage with SAM professionals or use tools like Licenseware to guide your transition strategy.

Staying ahead of these changes will ensure your organization remains compliant and optimally licensed, avoiding unexpected costs and disruptions.

For more information on Microsoft’s licensing updates, visit their official announcement here.

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