How to Get Ready for Microsoft’s 2025 On-Premises Server Licensing Update

Microsoft has shared important updates about changes coming to its on-premises server software. Starting July 1, 2025, new licensing rules and price increases will take effect. If your organization uses Exchange Server, SharePoint Server, or Skype for Business Server, these changes will impact you directly.

This guide will help you understand what’s coming, what it means, and how to prepare—so your team stays ready and your budget stays on track.

What’s Changing and When

In mid-2025, Microsoft will release new editions of some popular tools:

• Exchange Server Subscription Edition

• Skype for Business Server Subscription Edition

These will follow a Modern Lifecycle Policy. That means they won’t have fixed version numbers or traditional end-of-life dates. Instead, you’ll receive regular updates as long as your license is active.

To use these new editions, you must have:

• Active Software Assurance (SA)

  or

• A valid Microsoft 365 subscription

These products won’t be sold as standalone, perpetual licenses. They’re moving to a model that requires ongoing coverage.

Traditional on-prem versions will still exist, but they’ll cost more starting July 2025.

Understanding the New Pricing

Microsoft also announced price changes for several key products used in on-premises environments.

Here’s a quick breakdown:

• Exchange Server, Skype for Business Server, and SharePoint Server:

  → 10% price increase

• Core Client Access License (CAL) Suite:

  → 15% price increase

• Enterprise CAL Suite:

  → 20% price increase

These changes affect on-premises versions only. Microsoft cloud services like Exchange Online, SharePoint Online, and Teams are not impacted.

So, if your business is still running these tools locally, your renewal or new purchase after July 1, 2025, will reflect these higher rates.

Key Considerations for IT Teams

If your systems still rely on local server tools, now is the time to look at your setup and prepare for what’s ahead. Here are a few things to think about:

• Do you have Software Assurance?

If not, you won’t be able to access the new Subscription Editions. You may need to renew or upgrade your agreement.

• How often do you update your systems?

The new update model brings frequent improvements and security patches. If your team wants to avoid large upgrade projects, the new model may work better.

• What’s the cost difference?

Run a comparison between renewing your current licenses and shifting to subscription or cloud-based solutions. This will help with future planning.

• Are you cloud-ready?

If moving to Microsoft 365 or hybrid solutions is on your roadmap, this might be a good time to review timelines and resources.

Every organization is different, but taking a closer look now can help avoid issues later.

Planning Your Next Steps

Here’s what you can do to stay on top of these changes:

1. Review your current licenses

   Know what you have, what’s covered, and what’s not.

2. Schedule a call with your Microsoft partner or account team

   They can walk you through your options based on your setup.

3. Update your IT budget

   Factor in price changes and possible migration costs if you decide to move to cloud or subscription services.

4. Plan your roadmap

   If a full cloud move isn’t possible, consider a hybrid model to get the best of both worlds.

Preparing now gives you time to make smart decisions—without rushing when the deadline arrives.

Conclusion

The July 2025 updates from Microsoft mark a shift in how server software is sold and supported. With new subscription-based editions and pricing changes on the way, it’s important for organizations to act early.

By reviewing your systems, understanding the licensing updates, and talking to your IT partners, you’ll be in a better position to manage the change—without disruption or surprise costs.

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