Exchange licensing FAQs
The following FAQ provides answers to common questions about licensing Exchange.
Microsoft Exchange Server Subscription Edition licensing and pricing updates
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Exchange Server SE is the latest version of Exchange Server, designed to provide a perpetually updated on-premises email solution.
Licensing for Exchange Server SE follows an entitlement‑based model. Customers must maintain an active qualifying entitlement to install, run, and stay current with Exchange Server SE. That entitlement can come from one of the following:- Active Software Assurance (SA) on existing Exchange Server Standard or Enterprise licenses.
- A qualifying Microsoft 365 subscription (such as Microsoft 365 E3 or E5) acquired through an Enterprise Agreement and including on‑premises server‑use rights.
In addition to the server license entitlement, each user or device accessing Exchange Server SE must have the appropriate Client Access Licenses (CALs):
- A Standard CAL, which is always required.
- An Enterprise CAL (an add-on to the Standard CAL), which is required for advanced features.
CALs must also be covered by active SA or by an equivalent qualifying Microsoft 365 subscription. Maintaining active SA or a qualifying subscription is required to continue using Exchange Server SE and to receive ongoing cumulative updates.
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Extended Use Rights provide licenses to run on-premises Exchange Server SE, depending on your licensing program. They are not limited to Enterprise Agreements or Enterprise Agreement Subscriptions. Other programs such as Open License and Open Value may also include these rights.
To confirm, check the Microsoft Product Terms and select the appropriate licensing program from the dropdown. Look for Extended Use Rights under your program’s terms.
Important: Extended Use Rights apply only to users licensed with qualifying Microsoft 365 subscriptions. For example, you can’t license a single E3/E5 user and then run Exchange Server SE for additional unlicensed users. Every user accessing Exchange Server SE must have a qualifying license.
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Exchange Online Plan 1 and Plan 2 licenses provide Client Access License (CAL) equivalency for Exchange Server SE on-premises servers. This means users licensed with Exchange Online Plan 1 or Plan 2 can access Exchange Server SE without needing separate CALs.
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Pricing for Exchange Server SE and related licenses is not published directly in the FAQ. For current pricing, consult your Microsoft account representative or official Microsoft licensing resources.
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Microsoft Exchange is the server technology that stores and manages your email, calendar, contacts, and tasks. It provides the back-end services such as data storage, synchronization, security, and mailbox policies, that keep your mailbox available across devices.
Outlook is the client application you use to access that mailbox. Outlook can run on Windows, macOS, the web (Outlook on the web), and mobile devices. It provides the user interface for reading email, scheduling meetings, managing contacts, and working with all the data stored in Exchange.
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You can access your Exchange mailbox on a mobile device by using:
Outlook for iOS or Android (recommended): Install the Outlook app from the Apple App Store or Google Play Store, then sign in with your work or school account. The app provides the best support for modern Exchange features, including focused inbox, shared mailboxes, and enhanced security.
Built‑in mail apps using Exchange ActiveSync: Most mobile devices support connecting to Exchange using the built‑in mail app. Add a new account and choose either Microsoft Exchange, Exchange ActiveSync, or Work account, then enter your email address and password. Available features may vary by device.
When you sign in, email, calendars, contacts, and tasks stored in Exchange will automatically sync to your device.
Transitioning between Exchange Server versions
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No, the Outlook client license is no longer included with any Exchange CAL, and must be purchased separately for Exchange Server SE. The Exchange Server SE Standard CALs provide the rights to access e-mail, calendar, contacts, and tasks through either Outlook on the web, or through a mobile device via Exchange ActiveSync.
Server pricing and licensing
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No. Both the Standard and Enterprise CALs can be used with either server edition.
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One server license is required for each running instance of Exchange Server SE—whether it is installed natively on a physical machine or a virtual machine.
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No. External users do not require CALs to access Exchange Server SE. Access rights to standard Exchange functionality by external users is included with the Exchange Server SE license itself.
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Customers may still license Exchange Server SE with either per-user or per-device CALs. If several users share a desktop and do not individually access the Exchange server from other locations, such as their home PCs, then they can be licensed with one device CAL.
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Customers can get the In-Place Archive and In-Place Hold features through Exchange Online Archiving for Exchange Server, and they can get advanced security through Exchange Online Protection. All other premium features are only available in the Enterprise CAL or Enterprise CAL Suite.
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If you‘re not using online service licenses, such as Exchange Online subscriptions with Extended Use Rights, you can license Exchange Server SE through the traditional License + Software Assurance model:
- License: A one-time cost that gives the customer ownership of the software. Once paid off over the initial term, typically three years, the license is perpetual. However, you must maintain active Software Assurance (SA) even after the license is fully paid to keep your subscription and receive updates.
- Software Assurance: An annual subscription that provides ongoing benefits, updates, and rights to new versions. SA continues even after the license is fully paid.
Example: If a license costs $1,000 and SA is $100 per year, the first three years would include an annual licensing fee of $333 plus $100 per year for SA. After three years, only the $100 SA fee will be charged.
For Exchange Server SE, maintaining active SA (or a qualifying Microsoft 365 subscription with Extended Use Rights) is required to keep your subscription and receive updates. You can purchase Enterprise CALs without additional services if you pay the license and annual SA fees.
Exchange Online pricing and licensing
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Exchange Online is licensed via a subscription model. Three types of subscriptions are available: Exchange Online Kiosk, Exchange Online Plan 1, and Exchange Online Plan 2. These subscriptions can be purchased on their own or as part of a Microsoft 365 plan that includes SharePoint Online, OneDrive, and Microsoft 365 Apps for enterprise.
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To compare the different plans, see comparing Exchange Online plans. Or, for more detail, see the Exchange Online service description.
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No. Resource mailboxes, including Room Mailboxes and Equipment Mailboxes, are special mailbox types that are provided free of charge as part of Exchange Online. There is no limit to the number of conference room subscriptions.
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No. Shared mailboxes don’t have login credentials, so they are only accessible by licensed users who have been granted delegate access (full mailbox permission, send as, or send on behalf of). Shared mailboxes do not include a personal archive or legal hold capabilities. If you need these features, then you can purchase either Exchange Online Plan 1 or Plan 2 and assign it to the shared mailbox. There is no limit to the number of shared mailboxes though the size is limited to 50 GB. If you require a shared mailbox that is larger than 50 GB, an Exchange Online Plan 2 license will need to be assigned to it.
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You must assign the shared mailbox to either an Exchange Online Plan 1 plus Exchange Online Archiving subscription, or to an Exchange Online Plan 2 subscription to enable In-Place Archive. A shared mailbox can’t be used to archive email for an organization, except for those messages that are sent from the shared mailbox or received by the shared mailbox.
An In-Place Archive can only be used to archive mail for a single user or entity for which a license has been applied. Using an In-Place Archive to store mail from multiple users or entities is prohibited. For example, IT administrators cannot create shared mailboxes and have users copy (via CC or Transport rule) a shared mailbox for the explicit purpose of archiving. -
You must assign the shared mailbox an Exchange Online Plan 2 subscription to apply an In-Place Hold.
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Yes, these mailboxes require a subscription. The subscription type can be Exchange Online Kiosk or Exchange Online Plan 1 or Plan 2.
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No.
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Public folder mailboxes are available to users with Exchange Online Plan 1 and Plan 2 subscriptions. They are not available for Exchange Online Kiosk users.
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No. Using journaling, transport rules, or auto-forwarding rules to copy messages to an Exchange Online mailbox for dual-delivery purposes is not permitted. To preserve messages, you must put user content on In-Place Hold, or journal the messages to an external journal target.
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There are no limits on the duration of retention policy. You can set the retention duration based on your business needs.
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You have several options:
- You can export that user’s data to a PST file and store it on-premises.
- You can retain the data in that user’s mailbox by placing the user on In-Place Hold and marking the mailbox as inactive. It isn’t necessary to maintain a user subscription license for the inactive mailbox.
- If you have a hybrid deployment of Exchange Server and Exchange Online, you can migrate the mailbox back on-premises.
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Exchange Online Kiosk is designed for users who require fewer messaging features because they do not have dedicated computers. The subscription provides 2 GB of mailbox space per user and web-based access through Outlook on the web. Certain features are disabled for Kiosk users, including inbox rules, public folder mailboxes, site mailboxes, and delegate access to other mailboxes.
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Yes, all Exchange Online subscriptions, including Exchange Online Kiosk, allow organization-wide capabilities such as In-Place eDiscovery, journaling, custom retention policies, and premier anti-spam and anti-malware filtering via Exchange Online Protection.
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Users with Kiosk mailboxes are protected by the same uptime SLA and geo-redundancy protection as other Exchange Online mailboxes.
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In order to place a Kiosk mailbox on In-Place Hold, you must upgrade it to Exchange Online Plan 2 or purchase the Exchange Online Archiving for Exchange Online add-on.
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Yes. In the Microsoft Online Services Portal, you can assign the user a new subscription and remove the old one. This will automatically update the user’s capabilities in Exchange Online. The procedure for purchasing new subscriptions and canceling old ones varies; check your specific license agreement for details.
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Yes. In the Microsoft Online Services Portal, you can assign the user a new subscription and remove the old one. This will automatically update the user’s capabilities in Exchange Online. For the smoothest transition, you should remove any In-Place Holds from the user’s mailbox prior to assigning them the new subscription. The downgrade behavior is as follows:
- Mailbox data: All data in the user’s mailbox and archive is preserved. If the user has a total of more than 50 GB of data in the primary mailbox plus the archive, the conversion will succeed, but the mailbox will be out of compliance from a licensing perspective until the excess data is deleted by the user.
- In-Place Hold: If the mailbox is on In-Place Hold, the hold remains in place. The mailbox will be out of compliance from a licensing perspective until the In-Place Hold is cleared. If you are using Directory Sync, you can clear the In-Place Hold by updating the user's Active Directory object, otherwise you must call support to have it cleared.
- Hosted voice mail: This feature is automatically disabled for the user as part of the transition.
The procedure for purchasing new subscriptions and canceling old ones varies. Check your specific license agreement for details.
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Yes. In the Microsoft 365 admin center, you can assign the user a new subscription and remove the old one. This will automatically update the user’s capabilities in Exchange Online. For the smoothest transition, you should delete the user’s inbox rules and SMS notifications prior to assigning them the new subscription. The downgrade behavior is as follows:
- Mailbox size: If the size exceeds 2 GB, the action will fail.
- Inbox rules: Existing inbox rules are left in place but they are not editable. To delete the user’s rules, contact Microsoft 365 support.
The procedure for purchasing new subscriptions and canceling old ones varies. Check your specific license agreement for details.
Hybrid Deployment
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If you do not host any mailboxes on the servers used to connect to Microsoft 365, you can license them using the Microsoft 365 Hybrid Configuration wizard. It validates your Microsoft 365 subscription and installs the appropriate licenses on your servers. Please note that the Hybrid license is for the purposes of recipient management only. If you host mailboxes or need an Edge Transport or SMTP relay server on-premises, you still need an Exchange Server license.
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You can use PowerShell to enter the new product key.
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You can point your MX record to Exchange Online in a hybrid deployment. In this scenario, Exchange Online Protection (EOP) provides anti-spam and anti-malware filtering on inbound mail for the on-premises users, so these on-premises users require EOP subscriptions.
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A user with an F1 license cannot configure delegates to their own mailbox, but they can access another mailbox (including shared mailboxes) and perform any actions which have been delegated to them.
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