The Future of Microsoft Exchange Server

Microsoft Exchange Server can arguably rank as the most successful server product within Microsoft's portfolio.  It has helped drive adoption of Windows Server and Active Directory along with untold amounts of server and storage infrastructure.  It has also driven a whole group of 3rd party software from compliance and archiving to backup/recovery over its tenure.   Exchange has also evolved to be a key part of MS's Cloud initiative as a portion of the Office365 offerings as well as being supported by an increasing number of hosters and outsourcers.

With the release of Exchange 2013 - Exchange is now in it's 8th major release cycle and the brand is 17 years old, starting from Exchange 4.0 being released back in April of 1996.  From that humble release competing against the likes of cc:Mail and Groupwise - through it's long running competition with Lotus Notes, Exchange has evolved from a small workgroup messaging solution to the highly consolidated, highly available and scalable product it is today - supporting a large share of corporate email.

Starting with Exchange 2007, MS did a major re-architecture to improve the reliability, availability and scalability of the product.  They have also improved compliance with archiving, journalling and DLP.  And as part of the overall MS Collaboration Strategy, added Unified Messaging support and integration with OCS/Lync.

While all that product evolution has been great - another revolution has been happening called Cloud Computing that makes me raise the following questions:

1. Will there be an Exchange Server 2016 or 2019 ? 
2. And if so - would you implement it in the traditional on-premise model ?

Regardless of your thoughts on Cloud Computing and it's hype level at times - it is obviously a disruptive technology and it is certainly influencing decision makers.  

So much so in fact that Microsoft themselves have reorganized and stated they will become a device and services company.  The Office365 and Azure brands have grown from $0 to $1B business lines and seem to be growing at a very nice pace.  

But back to the questions. First - will there be an Exchange Server 2016 or 2019 ?   My answer is yes and maybe.  I am certainly confident that there will be an Exchange Server 2016 that will continue to improve especially on the compliance features.  I am not as confident that there will be a 2019 version.  The future focus will be much more on supporting Office365 capabilities than on-premise implementations.   Sure you will be able to purchase and implement these future versions, but then here is where that second question comes in.

Will you implement Exchange 2016 or 2019 in a traditional on-premise configuration.  To me the answer is most likely no.  

The attitudes about hosting enterprise email internally have changed.  While in the 90's and early 00's it was a no brainer that a company would host it's own email system, for many IT executive and business owners that is no longer the case.  In additional email has now become a commodity and in some cases your practically competing against free.

As we all know in recent years there has been tremendous pressure put on IT to lower costs and complexity and increase business agility.  Even though email can still be viewed as one of the true killer business applications - the perceptions have changed on how to support that business function.  Here is a good example....

Earlier this year I sat down with an IT executive I had known for years to discuss his enterprise messaging/collaboration strategy and thoughts about upgrading to Exchange 2013.  The exec was running a few minutes behind, so I was led into his office and as I sat down - I noticed the table I was sitting at was covered in Office365 material including the contracts.  

So as we started our conversation, I asked had he made a decision on Office365.   He answered yes - we are going to Office365.   As I probed further into the criteria that drove him to his decision - it basically came down to two key things - cost and being "good enough".   

Those of you who are already Office365 customers and/or read a lot of the industry and technology feeds out there are aware that in 2012 MS experienced some pretty visible outages with Office365 and so I asked him, "How many times in 2012 did you experience an outage with your current Exchange 2010 on-premise installation" ?  His answer was I can't remember if we've had one.  When I then followed that with - okay - so how many outages did Office365 have in 2012 and how will you be able to manage an Office365 outage when it occurs.   His response was that he was aware of the outages, but stated it doesn't matter.  Mind you, this is no small business but a 30K seat global enterprise.    

They had made a strategic decision to outsource core services like Exchange, etc to Office365 and so they could focus their resources on business applications.  They were willing to trade off the potential risk of outage versus the overall costs.  I see this trend growing and therefore my thought is that for many customers - they mostly like will not implement an on premise Exchange Server 2016 or 2019.   

This change in attitude is already impacting partners.  While in the past you had an opportunity every 3 - 4 years to approach a customer about helping them upgrade to the newest Exchange version, your now discussing migrating them to the cloud and with that the potential loss of future work in that space.  And so even if you are the partner of record for the initial contract and get the associated revenue - you may not get the renewal.  There also will not be any new "migration" work once the cloud migration completes.   

So what does this mean for the Exchange brand ?  It will certainly survive since it is so synonymous with MS's email solution.  

Bottom line for a lot of you Exchange Server architects and admins.  Over the next few years, you may do one last Exchange upgrade - but then the following one will be to the cloud and your history with "Exchange Server"  will end..