How Microsoft will end Office's perpetual licensing

[Karlston]

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?

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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.

 

The alternative to Exchange Server as a perpetual license — where the software is often deployed on-premises — is to "rent" Exchange Online, Microsoft's cloud-based email service. Exchange Online is usually acquired as part of an Office 365 or Microsoft 365 subscription.

 

Because of the change to subscription licensing, Exchange Server 2019 will be not only the final perpetual-style version of the on-premises software but may also be the last version to contain significant new features and functionality. In announcing the upcoming licensing model, Microsoft said that Exchange Server 2019 would be "the last major upgrade they [customers] will ever need to do," implying that the updates offered to Exchange Next will be minor, thus sans new shiny stuff.

 

There was always the expectation that at some point Microsoft would drop on-premises Exchange Server or twist it beyond recognition, all in an effort to push and pull all possible customers to the subscription-based Exchange Online through the also-sub-based Office 365 and Microsoft 365.

 

One of the clearest clues was the simultaneous end of support for Exchange Server 2016 and Exchange Server 2019: Oct. 14, 2025. Although that provided the usual — and until lately, sacrosanct — 10 years to Exchange Server 2016, it cut 2019's support lifetime by nearly a third, to 7 years. That shorting of support, and the fact that its date matched 2016's, signaled something drastic, perhaps an end to the product.

The future of on-premises Office

So, what should customers read into the end-of-support dates for Office 2016 and Office 2019? After all, both those perpetual-licensed suites drop off the support list on the same day, which is also the same day as Exchange Server 2016 and Exchange Server 2019: Oct. 14, 2025.

 

Well, well, well.

 

No surprise, really, what with the tight connections between the client and server sides of the Office environment. Upgrade one, upgrade all, has been Microsoft's mandate, with synchronized releases, more or less, from at least the turn of the century. Exchange Server 2000, Office 2000. Exchange Server 2003, Office 2003. And so on, so forth, through 2007, 2010, 2013, 2016 and 2019, every three years like clockwork.

 

At the same time it talked up Exchange Server Next, Microsoft also reiterated that it would issue an on-premises Office to succeed Office 2019. "Microsoft Office will also see a new perpetual release for both Windows and Mac, in the second half of 2021," the company said, reaffirming what it said in September 2018 as it launched Office 2019.

 

Microsoft did not say that Office Next — a placeholder Computerworld used for what Microsoft might eventually name Office 2022 — would be offered by subscription. Rather, it used "perpetual release," which suggested a single, up-front payment.

 

Still, it would be odd for Microsoft to ask customers to pay for their Office on-premises infrastructure — the server software — with subscriptions while it tells them to purchase the client software with a one-time fee, when it's kept the two in sync for years.

 

Microsoft could use a hybrid approach for Office Next, contended Rob Helm, an analyst with Directions on Microsoft. "Office might be handled differently [than Exchange Server]," he said of the former's payment scheme. Perhaps Microsoft would sell Office Next on the perpetual license model, he continued, "But not with a fixed support length."

 

Instead, customers would be required to make regular payments for "subscription rights" that would include support.

 

If Microsoft splits its client-server duo into perpetual and subscription licensing for the next cycle — the 2021 releases — or for more than one such cycle, it seems clear that once the company decides to debut the final on-premises Office, it will have that product adopt the same subscription scheme as Exchange Server. Doing anything but that would be a needless complication and uselessly confuse customers, something even Microsoft — known for doing both at times — should avoid if at all possible.

 

At that point, Microsoft will have eased the entire on-premises Office ecosystem to a subscription model, albeit one significantly different from the Office/Microsoft 365 design. Like Exchange Server Next, Office Next will be a dead-end product that, although maintained with security and other bug fixes, will increasingly lag behind the pure-subscription software-and-services of Office 365 and Microsoft 365 in new features.

 

Microsoft has now, and will continue to have in the future, little to no motivation to add functionality to the on-premises line — not if it wants to keep touting the 365 alternative as the best solution. The Server Next/Office Next combo will instead emphasize stability and reliability, somewhat like Windows 10 Long-Term Servicing Channel does in the Windows universe.

 

From Taylor’s account, Microsoft will offer the Server Next model for quite some time “[if] you know you’re staying on premises for some period of years to come,” while also talking up the transition from perpetual licensing to subscription.

 

Taylor also confirmed that the shortening of support for Exchange Server 2019 — from the usual 10 years to seven years, remember — was for a distinctive purpose. "We want to try to get people into this new model," Taylor said, referring to the Exchange Next subscription.

 

Computerworld cannot come up with another reason for shortening the support for Office 2019 that same way. Microsoft will do this, whether for the 2021 cycle or later. Count on it.

 

 

How Microsoft will end Office's perpetual licensing

 

[mp68terr]

Hard to follow.

 

Microsoft to release a new perpetual license version of Office next year

(https://www.nsaneforums.com/topic/386944-microsoft-to-release-a-new-perpetual-license-version-of-office-next-year/)

 

[Sylence]

Exchange server is huge and the cost of the infrastructure to properly host it is a lot, compared to Microsoft 365 subscription that offers Exchange hosted on Microsoft servers.

I've tried both online and on-premise version of almost all of these server applications and in the end I prefer the online versions of them that are part of Microsoft 365 subscription package. no more dealing with server hardware, setups, their dependencies etc. 

[steven36]

They plenty alternatives  to Exchange server  a few are GSuite   and even Open Source  Horde that free  .But the fact is most  Enterprise  that use Microsoft  most have had contracts with  them since the 1990s want touch a   perpetual license anymore   because there there already up to there eyeballs in M$  services  and  they can  use Office 365   and it works  with other services they already  subscribe too. Perpetual license Office dont have these perks.

 

Most home users  would rather use Perpetual license Office at  home  but employers rather they not  use it for working at home they rather  they  use  there works Office 365 so they employer can see  what there doing .M$   has all that stuff were  the info is shared  back with the employer  even . 

 

Office 365  Business they different plans but there  300 seats they can  give  there workers it to  use  at home.

 

The ones for home  is  $69.99/year   1 person   $99.99/year 2-6 people it come with 1TB  of storage space.

 

Good luck  to anyone  trying  sell  stuff  in  the USA  right now to  Business  COVID-19 pandemic have rendered  69% and 51% of firms zombies.

 

The Fed’s pandemic response has created a ‘zombie horde’ of crumbling companies

https://www.businessinsider.com/investing-advice-4-portfolio-moves-avoid-zombie-companies-todd-jablonski-2020-9

 

They millions out of work  so  they only thing they can afford is Horde .

 

 

The best jobs to have are  in parts of retail industry that sell stuff people really want  or in the medical  industry  .

 

Over the last 20 years, Silicon Valley has benefited from a once-in-a-lifetime alignment of advantages. American primacy, the ubiquity of cheap capital, the arrival of the smartphone (among other widely adopted tech innovations), and, perhaps most significantly, a benign regulatory environment have all conspired to create a historic concentration of wealth and power.

 

That might not be true for much longer, however. Despite the fact that many public tech companies saw their valuations skyrocket during the lockdown and that the Covid-19 pandemic has accelerated mass adoption in e-commerce, online payments, telemedicine, and video conferencing, there are signs that the gilded age for consumer internet businesses may be drawing to a close.

 

The micro-targeted advertising model will increasingly be under attack and will weaken

 

More rights for gig workers and the end of “zero hours” contracts

 

There will be big winners and many failures in the direct to consumer (D2C) and online product subscription models

 

Companies that focus on “conscious capitalism” and empathetic tech will have an advantage

 

https://hbr.org/2020/09/whats-next-for-silicon-valley

 

You already see Microsoft shifting towards empathetic tech, 

 

Only AI  Tech  and  Tech that are in business to do more than just make money and put people 1st will have the advantage  in the post  COVID-19 pandemic world.