What is Microsoft Exchange Server? Microsoft’s Groupware explained

Microsoft Exchange Server is an es­tab­lished groupware solution for internal corporate email com­mu­nic­a­tion and col­lab­or­a­tion. The software can be operated locally in your own data centre as well as through cloud-based models. We explain how Microsoft Exchange Server works, present editions and usage models, and show which options are available after support ends for Exchange Server 2016 and 2019.

Exchange Server de­ploy­ment models

Microsoft Exchange Server can be used in different operating models. In addition to cloud-based operation as Software as a Service (SaaS), it is also available as a licensed server solution in your own data centre or via an external Exchange Server hosting provider:

• On-premises: If you want to integrate Microsoft’s groupware solution into your own IT in­fra­struc­ture, you need a server licence that entitles you to install the software on your own hardware. In addition, all accessing users or devices require so-called Client Access Licenses (CALs). With the on-premises model, Exchange Server is operated under your own control. Operation and main­ten­ance are entirely the company’s re­spons­ib­il­ity. Today, local de­ploy­ment is usually done with the Exchange Server Sub­scrip­tion Edition (SE).
• Exchange Online: As part of Microsoft 365, Microsoft Exchange Server is also provided as a cloud service. In this case, Exchange Server is not operated in your own company, but hosted in the Microsoft cloud. Usage is based on user-based sub­scrip­tions, known as User Sub­scrip­tion Licenses (USL). Exchange Online can also run in parallel with an on-premises Exchange Server, for example in hybrid scenarios.
• Exchange Server hosting: In this usage model, an external service provider delivers the Exchange functions and takes care of operation, main­ten­ance, and licensing. Companies access the groupware via sub­scrip­tion-based pricing models without having to run their own server in­fra­struc­ture.

Technical found­a­tions of an Exchange ar­chi­tec­ture

An Exchange in­fra­struc­ture typically spans multiple physical or virtual servers. The functions provided on each system are defined through so-called server roles. Current Exchange versions combine the core functions in the Mailbox server role. This role handles tasks such as managing mailbox databases as well as accepting and pro­cessing client con­nec­tions. A separate Client Access role is no longer required.

An Edge Transport server can be deployed as an ad­di­tion­al server role. It is typically operated in an upstream network segment known as a de­mil­it­ar­ized zone (DMZ) and provides ad­di­tion­al pro­tec­tion for email traffic between the internal network and the internet, for example through anti-spam mech­an­isms and mail flow rules.

In larger en­vir­on­ments, multiple Mailbox servers are often combined into a Database Avail­ab­il­ity Group (DAG). Traffic dis­tri­bu­tion is managed through a load balancer to ensure high avail­ab­il­ity.

Users typically access the servers through Microsoft Outlook, Outlook on the web, or mobile devices. Com­mu­nic­a­tion between clients and servers takes place through stand­ard­ised in­ter­faces and protocols such as HTTP(S) and Exchange Web Services (EWS).

Exchange Server features

Microsoft Exchange Server provides a central groupware platform that helps busi­nesses organise com­mu­nic­a­tion and col­lab­or­a­tion across the company. Its feature set includes email services, calendars, contacts, tasks, and notes.

Exchange Server also supports ap­point­ment and resource schedul­ing, dis­tri­bu­tion list man­age­ment, and the shared use of mailboxes and calendars. Security features such as en­cryp­tion, au­then­tic­a­tion, and data pro­cessing policies are built into the platform.

Combined with other Microsoft services such as Share­Point or OneDrive, Exchange Server can further stream­line workflows, for example by enabling shared access to documents or col­lab­or­a­tion in teams.

From Exchange 2019 to Exchange Server Sub­scrip­tion Edition (SE)

With Exchange Server 2019, Microsoft laid the technical found­a­tion for today’s Exchange ar­chi­tec­ture. The focus was primarily on improved security, better per­form­ance, and stronger alignment with modern server en­vir­on­ments.

Today, Exchange Server is operated on-premises as Exchange Server Sub­scrip­tion Edition (SE). This is a con­tinu­ously main­tained licensing and servicing model without tra­di­tion­al version jumps. Tech­nic­ally, Exchange Server SE is based on the Exchange 2019 ar­chi­tec­ture but is developed on an ongoing basis.

Security updates, per­form­ance op­tim­isa­tions, and ad­just­ments for current operating systems are provided regularly. For busi­nesses, this model enables long-term, pre­dict­able on-premises use, provided they meet the required licensing and update con­di­tions.

How do I choose the right Exchange usage model?

Which Microsoft Exchange usage model is suitable depends primarily on op­er­a­tion­al re­spons­ib­il­ity, control re­quire­ments, and internal IT resources. The following key questions help with clas­si­fic­a­tion:

Exchange Server SE (on-premises) is a good fit if

• you have an in-house IT de­part­ment,
• you need custom con­fig­ur­a­tions or special in­teg­ra­tions,
• data needs to remain entirely in your own data center,
• legal or or­gan­isa­tion­al re­quire­ments restrict cloud use.

Exchange Online is a good fit if

• you want to outsource email in­fra­struc­ture op­er­a­tions as much as possible,
• you need high scalab­il­ity without running your own servers,
• you already use or plan to use Microsoft 365 services,
• low ad­min­is­trat­ive effort is a priority.

Hosted Exchange Server is a good fit if

• you want to use Exchange features,
• you cannot or do not want to operate your own server in­fra­struc­ture,
• you want more control than a pure cloud solution provides.

Exchange Server SE and Exchange Online at a glance

Exchange Server SE and Exchange Online mainly differ in terms of operation, re­spons­ib­il­it­ies, and licensing. The following overview compares the key features, benefits, and dif­fer­ences between the two options.

Migration to Exchange Server SE or Exchange Online

After official support ends for Exchange Server 2016 and 2019, companies should no longer continue using these versions in pro­duc­tion. Existing Microsoft Exchange en­vir­on­ments therefore need to be moved to a supported platform. However, a direct upgrade from Exchange 2016 to Exchange Server SE is only possible through an in­ter­me­di­ate step with Exchange 2019.

In general, there are two main options:

• Migration to Exchange Server Sub­scrip­tion Edition (SE): This option is suitable for companies that want to continue running Microsoft Exchange Server on-premises. Existing Exchange 2019 en­vir­on­ments can be used as the basis for the trans­ition, provided the operating systems and system re­quire­ments meet the current spe­cific­a­tions. The migration effort usually remains man­age­able because existing struc­tures can largely be retained.
• Migration to Exchange Online: When moving to Exchange Online, mailboxes and services are migrated to the Microsoft cloud. This is often done gradually in a hybrid scenario, with the on-premises Exchange Server and Exchange Online running in parallel for a limited period. This allows for a con­trolled migration and helps reduce downtime.

Microsoft Exchange Server editions and licensing

Microsoft Exchange Server is available in two editions: Standard and En­ter­prise. The editions mainly differ in terms of scalab­il­ity. Client access licenses (CALs) are also required and are assigned either per user or per device. An En­ter­prise CAL always requires a Standard CAL.

Com­par­is­on of Exchange Server licensing models

Microsoft Exchange licensing and billing models differ sig­ni­fic­antly depending on the operating model. The following overview compares Exchange Server Sub­scrip­tion Edition (SE), Exchange Online, and hosted Exchange in terms of licensing, re­spons­ib­il­it­ies, and cost structure.

Microsoft 365 Business

The Office you know, only better

• Up to 50 GB Exchange email account
• Outlook Web App and col­lab­or­a­tion tools
• Expert support & setup service

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IONOS Exchange Server as a hosted al­tern­at­ive

With Hosted Microsoft Exchange, IONOS provides the required Exchange in­fra­struc­ture and takes care of operation, main­ten­ance, and security updates. Companies use the familiar features of Microsoft Exchange without having to run their own server en­vir­on­ment.

As a hosting provider with its own in­fra­struc­ture, IONOS combines proven Microsoft software with high security standards and European data centre op­er­a­tions. A hosted Exchange solution is par­tic­u­larly suitable for companies that want to use Exchange while keeping ad­min­is­trat­ive effort and re­spons­ib­il­ity for the in­fra­struc­ture as low as possible.

What are the re­quire­ments for using the Microsoft Exchange Server?

Companies that want to operate Microsoft Exchange Server them­selves need to account for a sig­ni­fic­antly higher ad­min­is­trat­ive effort. On-premises operation requires a supported Windows Server operating system and an existing Active Directory in­fra­struc­ture, as Exchange uses this directory service to manage users and resources.

Today, local operation is typically based on Exchange Server Sub­scrip­tion Edition (SE). This edition supports current Windows Server versions, such as Windows Server 2019 or later, and requires at least .NET Framework 4.8, prefer­ably 4.8.1. Suf­fi­cient hardware resources and regular updates are also necessary to ensure secure and stable operation.