Even More on Exchange Server 2007 Licensing...the UC Wave?

My head hurts.

Microsoft licensing was messed up enough already. With the release of Exchange Server 2007, it got even more complicated.

Now, Outlook CALs aren't included in Exchange licensing. Ugh.

Oh, and then wait, to get Enterprise IM (which I had included as a part of Exchange 2000 Server), I now have to purchase Live Communication Server (LCS) 2005, or the brand-new Office Communication Server (OCS) 2007? How much is THAT gonna cost me?

Oh, and then wait - Office Live Communicator CALs aren't included in OCS licensing, either?

Oh, and wait again, I have HOW many different types of Client Access Licenses (CALs) for each Product??? And how many different Editions??? And it has to be installed on what architecture?

And Windows Server 2008 is due in less than two months? With ANOTHER gazillion different editions?


Let's ignore Server 2008 for the minute and put these prices/features/content/choices together.

Please note: prices are estimated retail prices in US dollars. Also please note: I am not a lawyer (IANAL). My comments are based on my understanding of publicly available information on various Microsoft web properties.

The differentiation between CLIENT licenses and SERVER licenses is now crystal clear. This was not necessarily true in the past.

Exchange Edition Cost
Exchange Server 2007 Standard Edition MSRP US $699
Exchange Server 2007 Enterprise Edition MSRP US $3,999

This represents no change in Exchange Server pricing (at least MSRP) since Exchange 2000 Server. However, as always, Exchange Standard contains most of the basic features of Exchange Enterprise, but is limited in terms of storage space, clustering, and features which (for some undefinable reason) Microsoft considers advanced. Here is a table defining many of the differences:

Feature Standard Enterprise
Maximum storage groups 5 50
Maximum databases 5 50
Maximum database size 16 TB 16 TB
Local Continuous Replication (LCR) Supported Supported
Standby Continuous Replication (SCR) Supported Supported
Clustering Not supported Supported
Single Copy Cluster (SCC) Not supported Supported
Cluster Continuous Replication (CCR) Not supported Supported

It is noteworthy that Standard Edition no longer has any "real" database size limits. In Exchange Server 2003 sp2, Standard Edition supported a single mailbox database, up to 75 GB in size. Prior to that, Standard Edition was limited to a single mailbox database of 16 GB in size.

As always, the true maximum size of a mailbox database is limited by your Service Level Agreement (SLA) with your clients - how long can they afford to be down in the case of a mailbox database restoration requirement? And how long does it take you to back that data up? It's a fine line, and a topic for another blog post one day.

It arguable as to whether Enterprise Edition is any longer a need in most environments. (Clustering is almost a religious issue. It's complicated enough that in many sites using clustering, they actually have higher downtime than sites that don't use it. But those folks who use it, and use it well, can take a 99.9% uptime solution [Standard Edition on good hardware] to a 99.99% solution. It's not cheap though. With well-implemented SCR, it is possible to attain that level of uptime with Standard Edition.)

Regardless of Edition, you will require Client Access Licenses and an Outlook license.

Theoretically, an Outlook license is not required. This is because much of the functionality of Outlook is available via Outlook Web Access and because access to the various Internet protocols (IMAP, POP-3, and SMTP) are included in the Exchange Standard CAL. However, realistically, an Outlook client is a requirement to obtain the full benefits of Exchange (and Unified Messaging).

Those costs (again, estimated MSRP) are shown below:

Description Cost
Outlook 2007 US $109
Standard CAL US $67
Enterprise CAL US $36

Thankfully (at least so far), there is only a single edition of Outlook.

In a change from prior CAL offerings from Microsoft, the Enterprise CAL does not replace the Standard CAL. Instead, it is an additive CAL. You must have a Standard CAL for every Enterprise CAL. However, the reverse is not true. You can potentially choose to not offer some users Enterprise functionality.

It is extremely interesting to note that you can use Standard CALs on Enterprise Edition and you can use Enterprise CALs on Standard Edition. They are only relevant to the feature content required by their presence.

Significant features provided by each CAL are;

Feature Standard Enterprise
E-mail, tasks, calendars, contacts Yes No
Outlook Web Access Yes No
Internet protocols (IMAP, POP-3) Yes No
All database journaling Yes No
Exchange ActiveSync Yes No
ActiveSync Policies No Yes
Unified Messaging No Yes
Per-User/Per-DL Journaling No Yes
Messaging Records Management No Yes
Exchange Hosted Filtering No Yes
Forefront Security for Exchange No Yes

Note that Unified Messaging is a feature of Exchange Enterprise CALs (and thus enabled by Exchange Server) but VoIP and Call Control are a feature of Office Communications Server (more on that later).

Now, we have all that data, what can we conclude?

First: the cost of the server software for an installation of any significant size is low compared to the cost of the CALs and user software. For example, consider the possible costs for an office of 10 users.

Description Cost
Exchange Server Standard Edition $699
Exchange Server Enterprise Edition $3,999
10 Office Outlook Licenses $1,090
10 Standard CALs $670
10 Standard CALs plus 10 Outlook Licenses $1,760
10 Enterprise CALs $360
10 Standard plus 10 Enterprise CALs plus Outlook Licenses $2,120

The Standard CAL cost for ten users is approximately the same as the cost of the Standard Edition server software. Once you add in the cost of the Outlook licenses, the client cost already far exceeds the cost of the server software. The additive cost for the Enterprise CALs is relatively small (20%) for the feature content enabled.

As you add users, the cost of the server software decreases quickly as a percentage of the total.

Next, similar to server software cost, the cost of server hardware decreases quickly as a percentage of the total, as the number of users grows. However, for small deployments, the cost of server hardware may significantly exceed the initial cost of the software. In the 10 user example above, the total cost of user licensing plus server licensing for Standard Server and Standard plus Enterprise CALs is approximately $2,800.

However, in early-2008 dollars, a reasonable server platform for running Exchange Server 2007 (non-highly available) is around $5,000. This doesn't include any backup capability or highly available features; but does include plenty of memory and disk and redundant features (like dual power supplies and fans). For 10 users, that may be excessive. However, that same platform can likely support 50 users as easily as 10. The licensing cost for 50 users is $10,600. At that level, software cost far outstrips hardware cost.

As a corollary, these types of cost comparisons are what make Exchange hosting more and more attractive to the low end of the market.

Next, as Exchange matures it is adding more and more feature content. While not necessarily obvious, but nonetheless true, using that advanced feature content requires more highly trained individual.

Now, that's all for Exchange. In the next blog post, I'll cover OCS licensing costs, and finally I'll try to pull it all together.

Published Wednesday, January 09, 2008 7:16 PM by michael


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