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Mark your calendars; on October 14, 2025, Exchange Server 2016 and 2019 will reach the end of their mainstream support life cycles. After this date, these versions will no longer receive official support, bug fixes, or security updates, placing organizations still running them at significant security risk.
To ensure that your email environment remains stable and protected, you have two paths forward: migrate your on-premises deployments to Exchange Online or upgrade to Exchange Server Subscription Edition (Exchange Server SE). In this blog, we will analyze each option, compare their core attributes and considerations, and help you determine which route may best align with your organization’s needs.
Exchange Online is Microsoft’s cloud-based email service, hosting your data on its servers while you retain full ownership. Microsoft does not use your data for advertising and secures it through encryption in transit (TLS/SSL) and at rest (e.g., BitLocker). By complying with major regulations and standards like ISO 27001, SOC, HIPAA/HITECH, and the GDPR, Microsoft ensures strong security and compliance.
It also handles all backend operations—data center infrastructure, hardware, patches, and global availability—so you are freed from routine administration. Your main duties involve account management along with configuration and governance (e.g., retention settings and archiving). By subscribing to a Microsoft 365 plan (e.g., E3, E5) that includes Exchange Online, you benefit from predictable licensing fees, automatic updates, and a robust infrastructure for your email services.
Exchange Server SE is an upcoming release that maintains the architecture of previous on-premises models, meaning you continue to host your own data on servers you control while receiving recurring feature updates through a subscription. However, you remain responsible for purchasing and maintaining hardware, designing availability solutions, configuring encryption, and managing tasks such as account management, retention settings, and archiving policies.
You must secure the appropriate licenses, and under this subscription model, you might have to pay an annual fee for both the subscription and the Software Assurance annual maintenance plan instead of a one-time upfront cost (assumed based on the terms of SharePoint Server Subscription Edition, since Microsoft has not provided any official information as of Apr. 7, 2025). Additionally, you will need to oversee the update process, schedule maintenance, and manage any resulting downtime.
Below is a condensed table illustrating key differences between Exchange Online and Exchange Server SE.
| Factor | Exchange Online | Exchange Server SE |
|---|---|---|
| Maintenance | Microsoft manages all server infrastructure, patches, and upgrades, reducing day-to-day IT overhead. | You handle server setup, hardware, and patching for full control but increased administrative effort. |
| Scalability | Easily scale by adding or removing user licenses. No hardware changes needed. | Scale by procuring additional hardware or upgrading existing servers, which costs time and money. |
| Updates | Automatic updates and new features are rolled out by Microsoft, keeping the service current. | You decide when to apply subscription-based updates, letting you test changes but increasing admin overhead. |
| Availability | High availability and geo-redundancy are included. You need stable internet access for uninterrupted service. | Availability depends on your own HA design (e.g., clustering). You’re responsible for failover and redundancy measures. |
| Security and compliance | Robust security and compliance features (ISO 27001, SOC, HIPAA, GDPR). Data is encrypted in transit (TLS) and at rest (BitLocker). | You control on-premises security end to end. Exchange Server SE doesn’t natively include TLS/SSL or disk encryption, so you must configure these separately. |
| Data residency | Data is stored in Microsoft’s regional data centers, replicated for redundancy. | You host data on your own servers, fully controlling its location. |
| Licensing | Requires a Microsoft 365 or Office 365 plan (e.g., E3, E5) with Exchange Online. Pay per user mailbox. | Subscription-based licensing for each server, plus Software Assurance. Features and fixes come with your active subscription (assumed based on the terms of SharePoint Server Subscription Edition, since Microsoft has not provided any official information, as of Apr. 7, 2025). |
| Running costs | Subscription fees for user licenses. No physical servers or data center expenses. | Ongoing subscription fees plus hardware, power, and maintenance costs. |
| Customization and control | Straightforward setup and management. Limited customization as configuration is not under the client's control. | More flexibility to customize. You manage hardware, security, and configuration details, which can be complex but offer deeper control. |
Despite the self-hosting architecture of Exchange Server SE, the inclusion of subscription fees, in addition to hardware and annual maintenance costs, results in a higher expense than what you might have incurred with the older, one-time perpetual licenses. Moreover, you will be tasked with designing the server connections, maintaining availability, managing updates, and coordinating additional encryption or security tools, which can divert IT resources from more strategic initiatives.
Unless your organization faces specialized compliance mandates or operational requirements that make on-premises hosting unavoidable, Exchange Online is the more cost-effective and seamless option. Here's why:
If you are considering Exchange Online as your cloud-based email solution, you have already recognized the advantages of reduced IT complexity, stronger security, and simplified budgeting.
While Exchange Online brings a lot to the table—reduced hardware headaches, predictable costs, and better uptime—there are a few practical things you’ll need to figure out first. Let’s break it down.
Migration: Migrating to Exchange Online poses a unique challenge to administrators, especially when a large amount of mailbox data needs to be migrated. Your migration method depends on your current setup, mailbox volume, and how much control or coexistence you need during the move.
This method moves all mailboxes at once and works best for organizations running Exchange 2013 or later with fewer than 150 mailboxes. It’s simple to execute but less suitable for large or complex environments.
This approach lets you move users in batches over time. It’s designed for Exchange 2010 or earlier and requires directory synchronization using Microsoft Entra Connect.
Hybrid allows you to run both on-premises and cloud environments in parallel, making it ideal for large organizations or those needing long-term coexistence. It requires more setup but offers flexibility and a seamless user experience.
Before you start, make sure to keep these points in mind:
Licensing: Exchange Online works on a per-user license model. You can either buy standalone Exchange Online plans or go with a Microsoft 365 suite that includes Exchange along with other apps and services.
Choose the plan that best aligns with your organization's size, compliance requirements, and collaboration needs.
Effectively managing Exchange Online can present certain challenges—built-in reports are difficult to interpret, requiring administrators to sift through extensive audit logs that resemble raw data more than actionable insights.
Additionally, routine tasks like managing mailbox permissions, configuring mailbox delegation, or adjusting mailbox storage quotas can become cumbersome when performed individually or through standard tools.
Moreover, as your organization inevitably expands its Microsoft 365 adoption to include other services like Teams, SharePoint Online, or Entra ID, managing each service through separate administrative portals—without integrated reporting or interactive management—can significantly increase complexity and administrative overhead.
This is exactly where a solution like ManageEngine M365 Manager Plus comes in.
M365 Manager Plus addresses these management challenges directly. It provides simplified, executive-friendly reports that consolidate critical information into clear, easy-to-understand insights, enabling quick decision-making. Additionally, it streamlines bulk administration tasks such as mailbox delegation, permissions management, and quota adjustments, allowing IT teams to efficiently execute organization-wide changes.
With M365 Manager Plus, you gain a unified console for auditing, reporting, monitoring, and alerting across your Microsoft 365 services, including Exchange Online.
When you decide to migrate other workloads to Microsoft 365, M365 Manager Plus is critical. It supports user life cycle management in Entra ID, provides robust tools for Teams and SharePoint Online site management, and delivers real-time auditing, monitoring, and alerting across your entire Microsoft 365 environment, coupled with granular cross-tenant administration.
This ensures your organization maintains clear oversight of critical activities and potential risks, simplifying compliance and governance. As a result, your IT team can dedicate more time to strategic initiatives and innovation rather than managing complex and disconnected administrative tools.
Download the free, 30-day trial of M365 Manager Plus to see these features in action for yourself and explore the other features this tool has to offer. Contact us for a free, personalized demo on setting these features up to secure your Microsoft 365 environment.
