Exchange 2003 to come with new licensing options

Microsoft will introduce a new per-user licensing option with the release of Exchange Server 2003 later this year, legitimizing the way many companies use existing versions of Exchange.

The new license type will be offered in addition to the per-device license introduced with Exchange 2000 Server, Missy Stern, product manager for Exchange said Thursday.

The move brings the licensing options for Exchange Server 2003 in line with those of Windows Server 2003, which was announced in April, she said.

Buying Exchange involves buying a version of the e-mail server software plus so-called client access licenses (CALs). Pricing for Exchange Server 2003 will be unchanged from Exchange 2000 Server, with Standard Edition priced at US$699, Enterprise Edition at $3,999 and CALs at $67, Stern said.

"We feel that we are responding to customer needs by keeping the prices the same but packing in many new features," Stern said.

The new per-user CAL covers Exchange access by a single user from a wide variety of devices, while a device CAL covers Exchange access only on a specific machine but by an unlimited number of users. In the past, if a single user were to access Exchange from multiple devices, a license would be required for each device. However, many users did not stick to that rule, analysts said.

"Per-user CALs bring Exchange licensing in line with practice and the rest of Microsoft's products. It is what the market wants," said Mark Levitt, vice president for collaborative computing at research company IDC, Framingham, Massachusetts.

Per-user licensing "makes total sense," said Peter Pawlak, a lead analyst with independent research firm Directions on Microsoft Inc. in Kirkland, Washington.

"It is a very important thing to make sure companies are getting plain license compliance. I think there was quite a bit of violation. Now once you get a user license for a particular user it does not matter how they get their mail," Pawlak said.

Another new licensing option for Exchange Server 2003 is the $50,000 External Connector license which allows access to the Exchange Server by an unlimited number of nonemployees, Stern said.

Besides adding licensing options, Exchange Server 2003 also allows companies to reduce the number of Exchange servers and save some money. Scalability and remote connectivity have been improved so more mailboxes can be hosted on a single server and remote locations no longer need their own servers, the analysts said.

Also, Microsoft's Mobile Information Server (MIS) has been rolled into Exchange Server 2003. It was previously sold as an add-on to Exchange 2000 Server. MIS allows users to access Exchange via a cell phone, or Pocket PC handheld computer.

For the user of an Exchange-based mailbox, probably the most noticeable enhancement will be the revamped Outlook Web Access client. Accessing e-mail via the Web is almost the same as accessing it from a desktop Outlook client, the analysts said.

Microsoft has finished work on the code of Exchange Server 2003 and the product is on track to be released to volume licensing customers in the third quarter, while retail availability is planned for the fourth quarter, Stern said. Microsoft is planning to announce release to manufacturing (RTM) of Exchange 2003 on Monday, the company said.

"This is the culmination of three years of planning, designing, building and testing," Stern said. "We had the most stringent criteria to date to ensure a great experience for the IT pro all the way to the end user who is accessing Exchange."

Microsoft, of Redmond, Washington, is keen on getting Exchange 5.5 users to upgrade. A host of upgrade tools are included with Exchange Server 2003 to help customers move up, Stern said. Microsoft estimates that between 40 percent and 60 percent of its Exchange customers still runs Exchange 5.5 on the Windows NT 4.0 platform.

Support for Exchange 5.5 will be available through the end of the year; after that a customer will have to buy extended support if needed, Stern said.

Exchange Server 2003 runs on Windows 2000 Server or Windows Server 2003, so customers running NT 4.0 also have to upgrade their operating environment when moving to a newer e-mail server. Some of the features of Exchange Server 2003, such as eight-node clustering and volume shadow copy services, are not supported when used with Windows 2000.

It makes sense for Exchange 5.5 users to upgrade soon after Exchange Server 2003 comes out, IDC's Levitt said.

"It is a no-brainer to do that within six to nine months. Now is the time that Exchange 5.5 is beginning to show its age and it will eventually no longer be supported," he said.

Exchange 2000 Server was released in October 2000. Around 130 million client licenses have been sold so far, Stern said. Exchange competes with products including Lotus Notes from IBM Corp.

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