Exchange Server 2010 licensing considerations and requirements

Microsoft licensing is tough to grasp. In this tip, we explain in plain English how Exchange 2010 licensing works to help you choose the best licensing model for your environment.

Microsoft is notorious for complex product licensing and Exchange Server 2010 is no exception. There are numerous licensing options available and figuring out which model best suits your needs -- and budget -- can be tedious.

This tip outlines Exchange licensing options and explains in plain English how to choose the right licensing scenario for your physical or virtual Exchange Server environment.

To begin, you need an Exchange Server license and a Windows Server license. You need both because Exchange sits on top of Windows Server and you must license Windows Server before installing Exchange.

There are four types of licenses that businesses generally require:

1. A license for the desktop operating system;

2. A client access license (CAL) for Windows Server -- This license lets a desktop computer legally connect to the Windows server over the network.

3. An Exchange CAL -- The Exchange CAL allows users to access their Exchange mailboxes. Exchange CALs can be licensed on either a per-user or per-device basis.

4. An Outlook license -- Prior to Exchange Server 2007 and Exchange 2010, Exchange CALs included an Outlook license. However, Exchange 2007 and Exchange 2010 CALs only let users access mailboxes through Outlook Web App (OWA) or ActiveSync. Companies that use Outlook must purchase separate Outlook licenses.

Exchange 2010 Enterprise Client Access licenses
The guidelines above are applicable to any company whose users access the basic Exchange 2010 feature set using Outlook 2010. Certain Exchange 2010’s features are premium and require an Enterprise CAL:

  • Advanced Exchange ActiveSync mobile management policies (basic ActiveSync policy management is included with a standard CAL);
  • Premium journaling (standard database-level journaling is included with the standard CAL);
  • Unified messaging;
  • Custom retention policies (default retention policies are included with the standard CAL)
  • Integrated archive;
  • Multi-mailbox search and legal hold; and
  • Information protection and control (IPC) features, including journal decryption, transport protection rules, Outlook protection rules and information rights management (IRM) search.

You can’t purchase an Enterprise CAL in place of a standard Exchange CAL. Enterprise CALs must be purchased in addition to standard CALs.

Exchange 2010 External Connector licenses
In many cases, companies do not know exactly how many CALs they need. For organizations that need to give Exchange mailbox access to partners and suppliers, Microsoft offers an External Connector license. The External Connector license supports unlimited Exchange Server connectivity. However, it comes with two major caveats:

1. The External Connector license price depends on the number of servers within the Exchange organization. There is no flat rate.

2. Only non-employees may connect to Exchange through an External Connector license. Regular employees still need an Exchange CAL, even with an External Connector license in place.

Exchange Server virtualization licensing
Virtualized Exchange creates a lot of confusion when it comes to licensing. However, the client licensing requirements do not change in virtual environments. Each user still requires an Exchange CAL. Each user also needs a Windows Server CAL and license for his desktop OS. If the user accesses Exchange through Outlook, then an Outlook license is required as well.

Historically, Microsoft required that organizations purchase a Windows Server license and an Exchange Server license for each physical Exchange Server. These requirements changed slightly to account for virtualized servers.

Now, Microsoft requires an Exchange Server license for each installed instance of Exchange. In other words, if your virtualization host server contains five virtual Exchange servers, then you’ll need five Exchange Server licenses.

Of course, you also need licenses for the Windows Server operating system running below Exchange. Licensing requirements vary depending on the edition. Assuming that the parent partition isn’t used for anything other than a virtualization platform, then Windows Server 2008/Windows Server 2008 R2 lets you install a single virtual server without incurring any additional licensing costs.

Organizations purchasing Windows Server 2008/Windows Server 2008 R2 Enterprise editions can deploy up to four virtual Windows server on a single host server as long as the parent partition is only used as a virtualization host. The Windows Server 2008/Windows Server 2008 R2 Datacenter editions allow for an unlimited number of virtual servers to be deployed on a single physical host.

Brien Posey is an eight-time Microsoft MVP with two decades of IT experience. Before becoming a freelance technical writer, Brien worked as a CIO for a national chain of hospitals and healthcare facilities. He has also served as a network administrator for some of the nation’s largest insurance companies and for the Department of Defense at Fort Knox.

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