Microsoft: No, we're not ditching on-premises Exchange

Quells concerns fueled by cloud emphasis as the company pivots to services from packaged software

Microsoft today shut down talk that it would soon stop shipping new versions of its Exchange Server, promising customers that it would continue to develop and release the popular email software for on-premises use.

In a post to the Exchange team's blog, Perry Clarke, who heads development, tried to put those fears to rest. "Microsoft has no plans to stop delivering on-premises releases of Exchange," Clarke wrote.

Clarke also said that customers could expect an Exchange release cadence of two to three years going forward, and that engineers are, in fact, working on the next iteration.

Exchange 2010 shipped in November 2009, and the follow-up, Exchange 2013, launched in October 2012, a three-year gap. Microsoft also took three years between Exchange 2007 and 2010.

"While we are enthusiastic about the cloud, we also understand that our customers will transition to the cloud at their own pace," Clarke said. "Many customers will remain on-premises or in hybrid deployments for the foreseeable future, and we want to keep delivering our newest and best features to them."

Talk of Microsoft pulling out of the on-premises market -- software installed by companies on their own servers -- was driven by the Redmond, Wash. company's aggressive emphasis on cloud-based services, said Rob Sanfilippo, an analyst at independent research firm Directions on Microsoft.

"Customers were wondering that, with so much moving to the cloud," said Sanfilippo, citing Microsoft's pivot to become a "devices-and-services" seller rather than one known for packaged software. "We didn't expect that they would be [dumping on-premises Exchange], but maybe that they would speed up its releases, like they're doing across the board."

So Sanfilippo said he was "a little surprised" by Clarke's confirmation that Exchange will instead hew to a slower development and shipping tempo.

Microsoft sells its Exchange Online service as an a la carte option for $4 or $8 per user per month, or more commonly, as part of an Office 365 subscription plan. The latter includes rights to on-premises Office 2013, starts at $12.50 per user per month and tops out at $22 per user per month.

In the comments appended to Clarke's blog, some continued to complain about what they saw as an emphasis on the cloud-based Exchange service and a corresponding lack of attention to the on-premises editions.

"All we want is to see you guys support the on-premises releases just as well as you do the Office 365 ones," said Chris Merritt, who works for a U.K.-based hosting company. "This to me means releasing the same features for both, and making the tools and functionality work just as well for your on-premises customers as it does for Office 365."

Sanfilippo said there was reason for customers to be concerned about the disparities between on-premises and cloud-based Exchange.

"Exchange 2013 was mostly about features for online and data centers, situations where someone was deploying large numbers of servers, hundreds or thousands of servers, that only a few clients would run into," Sanfilippo said. "It was not targeting or solving problems for on-premises."

That will likely continue, with features rolled out for Exchange Online long before they reach the on-premises editions. Clarke said as much today.

"Our development strategy continues to focus on Office 365 as the initial platform where we roll out new features," he confirmed. "This approach allows us to introduce and test new features at scale before including relevant functionality into on-premises updates."

Microsoft is using that first-to-cloud model elsewhere -- it's said the same for the Office productivity suite, for instance -- and will continue to use the tactic to entice customers to its services.

"It's part of Microsoft's move to a services business model," said Sanfilippo. "It's more stable, it's more under their control. It provides a lot of benefits to Microsoft."

Even so, Microsoft will continue to crank out on-premises Exchange.

"The reality is that not all [customers] will move to the cloud," Sanfilippo said. "Some are up against barriers, such as compliance and security concerns about data that they don't want to put up on Microsoft's servers. With the current way the cloud works, they have no option, so Microsoft has to continue [releasing on-premises Exchange] for the foreseeable future, at least for the next decade."

But he was surprised that Microsoft felt the need to come straight out and tell customers it wouldn't abandon the on-site software.

"Since this is coming from Perry Clarke, it's coming from high up on the Exchange team," Sanfilippo said. "They must have thought they had to quell some concerns and couldn't wait until next March." Sanfilippo was referring to the Microsoft Exchange Conference (MEC), which is slated to run from March 31 to April 2 in Austin, Tex.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at  @gkeizer, on Google+ or subscribe to Gregg's RSS feed . His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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