How Microsoft will end Office's perpetual licensing

Microsoft in September announced that the next version of its on-premises Exchange Server will be available only as a subscription-based product. What does that say about its licensing plans for Office?

Microsoft Office logo in an environment of abstract encrypted code and a padlock overlay.
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Microsoft may have hinted at how it plans to end its decades-long practice of selling Office as one-time-payment licenses.

During the Redmond, Wash. company's Ignite technical conference, held virtually last month because of the pandemic, Microsoft announced that the next version of its on-premises Exchange Server — the de facto email server in the enterprise — will be available only as a subscription-based product, thus ending licensing that let customers pay just once for the software.

"This is going to be a version of Exchange that will only be available with the purchase of a subscription," said Greg Taylor, director of product marketing for Exchange, in a video posted just prior to Ignite. "This subscription entitles you to updates and support for the lifetime of your subscription."

Other details, notably pricing, were missing. Microsoft said that info will be fleshed out before the release of what it dubbed Exchange Next in the second half of 2021.

That means Exchange Server 2019, which debuted two years ago, will be the last in the line of email servers sold as "perpetual" licenses, those that a company purchases with an up-front payment. A perpetual license payment provides the rights to run the software as long as one wants, even after Microsoft halts support.

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