Exchange Server 2016 and 2019 reach end of support in October 2025, which makes now the time to start planning your Exchange On-Prem to Online migration. Once that date arrives, sticking with an on-premises Exchange environment means moving to the newly released Exchange Server Subscription Edition (SE). And yes! That comes with strings (and extra costs) attached!
There is a 10% increase for server licences, and the Core and Enterprise CAL suites increased by 15% and 20% respectively on the 1st of July 2025. For many IT leaders, that’s a hard pill to swallow, especially when budgets are already stretched.
Traditionally, Exchange was a CapEx investment - you bought it, owned it, and planned your depreciation cycles around it. But Exchange SE flips the script. Licences are now subscription-based, shifting costs into OpEx territory. And while moving to Exchange Online has often been dismissed as “too big a leap” or “too costly”, it’s worth asking whether the subscription model of SE really leaves on-premises any less of a fundamental change.
Why is Exchange on-premises being retired?
While some organisations ask if they can migrate from Exchange Online to On-Prem, the reality is that Microsoft’s roadmap is firmly cloud-first.
Exchange On-Prem end of life is fast approaching, and Microsoft is pushing hard on cloud adoption. The move to Exchange Server Subscription Edition (SE) reflects that strategy. Unlike previous versions, SE introduces no major new features, just a new way to pay. Instead of numbered releases, Exchange SE is governed by the Modern Lifecycle Policy, with continuous updates as an evergreen product.
For organisations that must keep Exchange on-premises, moving to SE before October 2025 is unavoidable, along with the associated price increases. Ignoring the deadline risks running critical business data on unsupported, non-compliant software - a gamble few organisations can afford.
The hard fact is that the security and compliance implications for ignoring this deadline could potentially dwarf the cost of making the decision to either switch to the on-premises Subscription Edition or migrate to Exchange Online.
Migrating to Exchange Online delivers the benefits of a fully managed SaaS platform:
Reduced hardware costs
Lower admin overhead
Stronger security
Often a lower total cost than staying with SE
The risks of delaying your exchange migration
Regulatory pressure is increasing, and ignoring the Exchange On-Prem end-of-life date means leaving critical systems unsupported. Frameworks like GDPR, PCI DSS, NCSC Cyber Essentials/Cyber Essentials Plus and ISO 27001 all require strong data governance, retention, and protection.
Exchange On-Premises lacks modern compliance and security tools that are designed to meet these requirements:
No built-in Microsoft Purview features like eDiscovery, Insider Risk Management, or DLP analytics
Harder to implement audit trails, retention labels, and data classification
No Microsoft Defender for Office 365 providing out of the box protection against threats in email, links (URLS), and file attachments
On-premises Exchange Server is a high-profile attack vector and has been targeted in Hafnium, ProxyShell, and LockBit ransomware campaigns. As a result, it requires regular critical security patching of both the server operating system and Exchange application, which many organisations fall behind on.
Microsoft 365 has a zero-trust architecture and AI-driven protection, while Exchange Online benefits from automatic updates, threat intelligence, and built-in disaster recovery.
Key benefits of migrating to Exchange Online
Migrating to Exchange Online offers multiple benefits for businesses, from reduced operational costs and infrastructure to stronger security and enhanced flexibility.
Reduced infrastructure & operational costs
Moving to Exchange Online removes the need for heavy on-premises investment. With Microsoft managing the platform, organisations save on both upfront spend and ongoing maintenance.
No servers to purchase, maintain, or upgrade
Eliminates costs for backups, storage, and disaster recovery infrastructure
Shifts spend from CapEx (hardware) to predictable OpEx (per-user licensing)
Stronger security & compliance
Security is built in rather than bolted on, helping organisations reduce risk while staying aligned with modern standards.
Multi-Factor Authentication (MFA) for stronger access control
Zero Trust Architecture to reduce attack surface
Defender for Office 365 with advanced protection against phishing, malware, and business email compromise (BEC)
Automated patching reduces the risk of vulnerabilities
Manual patching and maintenance become a thing of the past. Microsoft ensures Exchange Online is always up to date, closing vulnerabilities before they can be exploited.
Compliance tools
Exchange Online comes with an extensive set of governance and compliance features to protect sensitive data and support regulatory requirements, including:
Data Loss Prevention (DLP)
eDiscovery & Legal Hold
Retention Policies
Audit Logs for tracking activity
Certified for major standards
Microsoft provides a library of compliance offerings, with both regional and industry-specific reference guides for Azure Dynamics 365 and Microsoft 365 (including Exchange Online).
Free access to the Microsoft Service Trust Portal means it’s easy to quickly pull out the relevant certificates, regulations, and standards for your Microsoft 365 services (including Office 365 and Exchange Online). This takes away the headache (and cost) of a lot of the on-premises compliance planning and associated infrastructure audit costs.
Scalable & flexible
Exchange Online grows with your business, making it easier to adapt to changing needs.
Add or remove users and mailboxes instantly
Built to support hybrid and remote working models
Access email anywhere via Outlook desktop, web, or mobile apps
Business continuity
With Microsoft’s cloud infrastructure, downtime is virtually eliminated, and resilience is guaranteed.
99.99% uptime SLA backed by Microsoft
Built-in geo-redundancy and disaster recovery
No downtime for patching or maintenance windows
Challenges when migrating to Exchange Online
For organisations with older or unsupported Exchange environments, migration is not a simple “lift and shift.” It’s a complex journey that demands careful planning, patience, and the right expertise.
Barry commented, “One of the biggest shifts is in skills and administration. Whether you adopt a hybrid Exchange model or go fully cloud with Exchange Online, your IT teams will need to adapt. This includes developing capabilities in Entra ID hybrid identity management, becoming comfortable with Exchange Online PowerShell, and understanding how to manage remote mailboxes and attributes. This often still requires local Exchange tools or a dedicated management server."
Another key consideration is data management. Organisations must plan for local PST files or archives, ensuring critical user data is preserved and migrated in line with compliance requirements.
Finally, there’s the often-overlooked issue of SMTP (Simple Mail Transfer Protocol) relay. Printers, scanners, and application servers that rely on on-premises relaying must be redirected to modern alternatives such as:
An authenticated Office 365 SMTP account
A dedicated SMTP relay server
A third-party SMTP relay service
Azure Communication Services for email
Successful Exchange migration isn’t just about moving mailboxes. It’s about modernising processes, upskilling teams, and ensuring every piece of the puzzle has a place in the new environment.
Step-by-step guide to migrating from Exchange On-Premises to Exchange Online
The complexity of an Exchange On-Prem to Online migration can be simple or complex, and very much depends on the complexity, age, and size of the on-premises environment. Below is a structured approach to guide the migration process.
Assess the current environment
Before you move, take stock of what you’ve got. A thorough assessment helps avoid surprises later.
Perform inventory of Exchange servers: versions, mailbox counts, storage use
Check server health: event logs, queues, and disk space
Identify third-party dependencies like journaling, archiving, or relay
Review Active Directory and DNS health
Understand current mail flow and hybrid requirements
Choose a migration method
Not all migrations are created equal. The right path for your business depends on size and complexity.
Cutover migration - Best for fewer than 150 mailboxes on Exchange 2013+
Staged migration - Suited to Exchange 2010+ in larger batches (note: Exchange 2010 is unsupported without third-party tools)
Hybrid migration - Ideal for gradual moves or long-term coexistence (Exchange 2013/2016/2019)
Prepare Microsoft 365 Tenant
Think of this as setting up the new house before moving in.
Set up your Microsoft 365 tenant
Add and verify custom domains
Assign Exchange Online licenses to users
Configure directory synchronisation
Identity is the backbone of the migration, so configuring directory synchronisation is key.
Install and configure Microsoft Entra Connect
Sync on-premises AD with Entra ID
Confirm UPN suffixes match verified domains
Choose password hash-sync or pass-through authentication
Set up hybrid configuration (if applicable)
For hybrid scenarios, the Hybrid Configuration Wizard (HCW) does the heavy lifting.
Connect on-premises Exchange with Exchange Online
Configure mail flow connectors, Autodiscover, and calendar sharing
Install SSL certificates as required
Migrate mailboxes
Now comes the move itself.
Use the Exchange Admin Center (EAC) or PowerShell to create migration batches
Monitor progress and error logs
Pre-stage 90–95% of mailboxes, then complete cutover during quieter periods
Update DNS and mail flow
This is the part where you start to point traffic to its new home.
Update MX records to Microsoft 365
Update Autodiscover, SPF, DKIM, and DMARC records
Verify mail is flowing into Exchange Online correctly
Retire legacy mail routing
Decommission On-Prem Exchange (Optional)
Once everything is running smoothly in the cloud, you can wind down on-prem infrastructure.
Remove old mailboxes
Decommission hybrid connectors if not needed
Optionally retain one Exchange server for management (hybrid identity) or use Exchange management tools
Post-migration cleanup
The dust settles after you migrate to Exchange Online, but there are still details to tidy up.
Notify users of changes (like new Outlook Web Access URLs)
Monitor mailbox performance
Reconfigure mobile devices and client profiles if needed
Check archiving, compliance, and retention policies are applied
Implement security & compliance policies
Finally, security and compliance need to be handled. Don’t leave the front door unlocked.
Enable MFA and conditional access
Apply DLP and retention policies
Set up eDiscovery and Legal Hold
Deploy Defender for Office 365
Review Microsoft Secure Score for ongoing improvements
Exchange Online migration checklist
While Nasstar can support you with your Exchange Online migration, we find it’s always handy to have a checklist. That’s why we’ve created this Exchange Online migration checklist to guide you through every stage.
Licensing & subscriptions
Microsoft 365 tenant created
Exchange Online licenses assigned
Optional archiving/Defender licenses applied
Pre-migration readiness
Inventory current Exchange environment
Verify AD health and Exchange compatibility
Configure Entra Connect
Verify domains and DNS records
Document SMTP relay dependencies
Migration method
Select method (cutover, staged, hybrid, third-party)
Plan mailbox migration batches
Technical configuration
Configure sync settings
Run Hybrid Configuration Wizard (if needed)
Create and test migration batches
Validate mail flow
DNS & mail flow
Update MX, SPF, DKIM, DMARC, Autodiscover
Post-migration
End-user communication and training
Verify mailbox access (desktop, mobile, OWA)
Reconfigure devices, check shared mailboxes
Decommission on-premises Exchange (if appropriate)
Security & compliance
Enable MFA and Conditional Access
Apply retention and DLP policies
Configure eDiscovery & Legal Hold
Review Microsoft Secure Score
Optional/advanced
Plan PST or archive migration
Review journaling requirements
Configure SMTP relay alternatives
Audit and secure service accounts
Migrating to Exchange Online with Nasstar
Exchange Server’s end of life isn’t a distant “someday problem.” October 2025 is close, and the longer you wait, the more rushed, risky, and expensive migrations become. Whether you’re wrestling with legacy infrastructure, compliance headaches, or simply trying to keep costs under control, Exchange Online offers a modern, secure, and resilient path forward.
The question isn’t really if you’ll need to move, it’s when (and how much pain you’ll endure if you delay).
At Nasstar, we’ve helped countless organisations tackle complex migrations, from legacy-laden setups to hybrid environments with tricky compliance needs. We know the pitfalls, and we know how to make the process smoother, faster, and safer.
Now is the time to start planning. Let’s talk about how we can help you with a smooth and secure Exchange On-Prem to Online migration - on your terms, before the deadline forces your hand. Contact us today.
Please refer to the following Microsoft pages for more information about the Exchange Server Subscriber Edition licence changes:
