Read the Exchange 2007 fine print

Read the Exchange 2007 fine print

Summary: Any business users out there finding the little-publicized Exchange 2007/Outlook 2007 licensing changes Microsoft has made to be potential "deployment blockers"?

TOPICS: Microsoft

When Microsoft announced its planned line-up of Office and Exchange 2007 packages earlier this year, there wasn't a whole lot of outcry about the company's decision to cut Outlook from the Exchange CAL (client-access license). But now the reality is setting in -- and some business customers are none too happy about it.

Jeff Centimano blogged on about the Exchange CAL changes just before the holidays.

"Unless your Exchange CAL Software Assurance was current as of November 30, 2006 - an upgrade to Exchange Server 2007 and Outlook 2007 might cost more than you expected. The official announcement is buried in the Product Use Rights section of," said Centimano, an IT consultant and Windows Server Most Valuable Professional (MVP).

Microsoft is trying to put a positive spin on the change, but not sounding very convincing in the process. When I asked for a comment on Centimano's post, the company sent me the following response, from Jevon Fark, Unified Communications Gorup product manager:

“In an effort to simplify licensing for customers, Microsoft is aligning products in a way that maps to the most common customer purchase process. By separating client and server purchases we are helping to streamline the purchasing process for our customers. As a result, Outlook, which is a client product, will not be included as part of Exchange Server 2007. An exception will be made for active SA customers.”

Hmmm. Simplification? Sounds more like a way for Microsoft to wring more dollars from customers, to me. Centimano, likewise, wondered aloud:

"(W)ithout Outlook 2007 - what exactly does Microsoft expect clients to use to access Exchange 2007? OWA (Outlook Web Access)? Previous versions of Outlook? It just doesn't make any sense to me. Outlook 2007 rocks... so why create another deployment blocker?"

Another blogger, Vlad Mazek, who is the system administrator behind, and, also questioned Microsoft's licensing move:

"This is either brilliant or idiotic, I am not sure which. On one hand, this will force the customers to see even more value in Software Assurance, a program that has been seen by many as a relatively worthless set of benefits with no worth-while upgrades over the past few years. On the other hand, this eliminates Microsoft Outlook as the defacto Microsoft Exchange user interface and shifts more users to OWA and Windows Mobile.

"End game? Microsoft gets more Software Assurance subscribers but opens the door wide open for Open Office. Now if they were just smart enough to create a web-only desktop and integrate OWA with the productivity tools at Office Online…. Wait, wasn’t that Google’s supposed plan all along? Booya!"

Any other business users out there who are finding the Exchange 2007/Outlook 2007 licensing changes to be onerous?

Topic: Microsoft


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • Shills & cash flow

    In a recent blog on here (one of David Berlind's IIRC) about a Windows problem, someone posed the question [i]"I wonder how long it will be until someone posts 'Switch to linux'"[/i]. It was about 7 posts.

    I'll pose a similar question - how long will be until someone rolls in to tell us that it won't cost more. You've got this badly wrong Mary Jo - it will actually cost less.

    Yeah right!

    It seems much more likely that Microsoft knows it is dealing with a saturated market, is out to eliminate piracy (OGA and WGA) and is racking up the prices to compensate for all those licences it never sold but will now.

    Businesses will be forced on to Software Assurance, individuals will get MS-Works or some sort of on-line Office with reduced functionality and anyone who wants the real thing will pay the full whack for it. That's *my* prediction for 2007.
    • I'm not in Linux for religion

      I'm in it for the money.

      If I had a technical religion it would be the Church of What Works. If you're in IT today and not learning Linux, your job opportunities going forward are going to become increasingly limited.

      Besides .NET you want to know Python and PHP. Besides SQL Server and Enterprise Mangler you'll want to know MySQL and PostGRESQL. And definitely Apache over IIS.

      That's if you want to stay in the field. There's always the fast food industry, where I'm guessing No_Ax works. You want a hot apple pie with that Vista, Axie? Hehe.
  • Other issues...

    There are other issues with the licensing that haven't been pointed out yet either. For example, there are now TWO SEPARATE CAL's to choose from when you buy Exchange. There is a standard CAL and there is an Enterprise CAL. The Standard CAL includes e-mail access, but doesn't include journaling there is quite the possibility that even IF a company had an Outlook CAL before, they may need to buy the additional CAL license to use all the features...NOT including upgrading their existing CAL. You want to use the new unified messaging? Nope...not including the standard CAL. You want to enable journaling? Nope....not in the standard CAL either. Get ready to shell out an extra $25 per user to purchase the ADDITIONAL enterprise CAL since they include completely separate items.
    • ...and you'll notice...

      ....if you buy the enterprise CAL, you also get to pay for the software assurance as well. There is no way to buy the Enterprise CAL addition without SA.

      So, previously with Exchange 2003 supporting 1000 mailboxes, you would expect a retail (and I'll use retail prices to show these examples) cost of $4000 (Exchange 2003 Enterprise) and $67000 (for the user CAL's) for a grand software retail total of $71000.

      Now Exchange 2007 comes out. The server software is similarly priced, but you'll notice you not only need to purchase Outlook, but you now need to purchase an extra $25000 worth of "enterprise" CAL'S in order to use the features.

      Finally, you'lll notice that Microsoft licenses per user or device, so you'll have to pay for the CAL's multiple times if you have more than one computer or handheld device. Also, you'll notice journaling is now listed as "per user/per distribution list". I can only assume Microsoft wants you to pay a CAL for each DL you want journaled.

      Add in the cost of Outlook and Microsfot seems to have effectively DOUBLED the cost of Exchange for a significant number of their customers.
      • Cool

        I love how M$ finds new and creative ways to screw its customers, many of which are locked in to a M$ solution. And you wonder why so many here find every opportunity to bash M$. Its well deserved.
        • Thank goodness i switched...

          Standard CAls, Enterprise CALs, per user/per device licensing. Ugh, I never deal with that headache-inducing junk. I use Evolution and Thunderbird for my desktop email needs, and not once have I had to hear anything about licensing issues. Then again, I haven't used Windows in almost five years :D

          I strongly suggest those affected businesses look into Thunderbird or some other open source email client, since most of them have Outlook migration built in. Or at least the act of looking elsewhere may pressure Microsoft into giving them a deal, since milking the customer but keeping them underfoot seems to be the name of the game.
          Tony Agudo
  • I'm still trying to figure out

    why anyone would use Exchange in the first place.
  • Guess I won't be upgrading for awhile

    Since I'm on Exchange 2003 and really don't need the features of Exchange 2007. I won't be upgrading until my server requires a hardware upgrade and since that is only a year old it won't be for several more years, and by then the next version will be out with a whole new set of licensing issues.
  • Outlook?

    Outlook? Who needs it? I use Pegasus Mail, and Thunderbird also works. Outlook is a virus nightmare. Sure, it's improved, but what's with Microsoft's obsession with integrating scripting and executable support with everything under the sun? The LAST thing I wanted was email that could run code. But apparently Microsoft thought it would be cool. Yeah, it's cool - for the 0.0001% of the people that actually use that stuff. But not for most people. It should have never been put in in the first place.

    Exchange's POP3 and SMTP work fine, and I can use my own email client, thanks.

    I wouldn't touch outlook with a 30,000 mile pole.
    • RPC/HTTPs is a really really good reason to use outlook...

      Outlook is more virus resistant than just about any mail client that run on windows. Not to mention that its manageable.

      Use what you like sure, but your statements about Outlook haven't been true for several years.
      • You're joking, right?

        I almost spit soda all over my laptop when I read your statement:

        "Outlook is more virus resistant than just about any mail client that run on windows."

        Almost every email virus in the wild is targeted at Outlook and Exchange. That's because the security model, if that's what you want to call it, is extremely trusting of local code. Sure, the end user has to be dumb enough to double click on the attachment, but Outlook does nothing to stop the code from executing once they do.

        Compare that with the Notes/Domino security model and you will see why, with almost the same number of customers, you have never heard of a virus/worm outbreak at a Domino site. It's not because they run better antivirus software. It's because the PKI-based security model in Notes/Domino is based on signatures to determine what code can run where. When Melissa and I Love You hit, Notes users got the emails, but their servers were not brought to their knees like Exchange sites.

        • you are living in the past...

          how long ago did I Love You or Melissa come out?

          I'm not saying it didn't used to be really really insecure. But by default out of the box the only possible executable code that can get through Outlook/Exchange 2003 is a something packaged in a zip file. And even that is stopped easily by a skilled admin.

          do you think they stopped working on it after outlook 2000?
  • As much as I like Microsoft programs

    You have to wonder who dreams up these complex licensing schemes, which are huge impediments to purchasing.

    If they just sold Microsoft Office at $80 period (no student / corporate yada yada), just plain simple single price for all.
    Then I think this would be far easier for purchasers.

    I've seen customers hold off on buying upgrades for years, just trying to understand the cheapest way to get the upgrade.
    A simple flat fee would have meant the purchase would happen much earlier.

    This mangled licensing stuff, like the multiple Vista versions (effectively making Vista a huge increase on price over XP) to me is going to destroy Microsoft's cash cows.

    I used to know what Microsoft products cost. I have absolutely no idea now. Not a clue. It's too complex.
  • Gmail for the enterprise

    Just read a story about Arizona State switching 65,000 mailboxes to Gmail. Apparently they've been very happy with the results.

    Many corporate users have their Exchange mailboxes forwarded to Gmail to get around the size limitations.

    I was trying to get more details but trying to find someone in Google enterprise sales is a freakin' nightmare. But if Google ever gets its sales act together you could see a lot of corporate roll outs of Gmail.

    Not feeling a bit sorry for anyone getting porked by MSFT pricing policies. If you don't know enough by now to start moving away from their product base, then too bad buddy. And it's only going to get worse in the future. As more people jump ship MSFT will be forced to squeeze those remaining for more revenue to keep their numbers up.

    Because at MSFT, you're not just a customer. You're a revenue stream!
  • tough move, but...

    It is a tough decision from MS to take away this benefit, but it won't affect many and I think it is simply fair. Most of the customers use Word/Excel/Powerpoint anyway and use volume licensing, so they're able to make use of outlook (pro, not just standard as included in exchange03) with the Office suite anyway. Second, it's fair regarding to competing client-products. Now customers have more freedom to choose - and if they don't need MS Office anyway, they will most probably like prefer another mailing app too.
    Anyway, you can always Downgrade your yolume license - so why not still use Outlook2003 with Exchange2007? Maybe a license specialist could comment on this !?!
  • RE: Read the Exchange 2007 small print