Come July 1, 2025, enterprise customers still running Microsoft infrastructure on-premises will face significant price increases. Microsoft is raising prices for several server products.
These increases are part of a broader shift towards cloud-based solutions, with Microsoft framing the price hikes as necessary to support ongoing maintenance and updates for a shrinking on-premises customer base. Prices for client access licenses (CALs) are also set to rise: the Core CAL Suite by 15%, and the Enterprise CAL Suite by 20% according to Microsoft’s official announcement.
The price increases are expected to affect various markets globally, but Microsoft has yet to confirm specific regional pricing adjustments.
The price hikes underscore the company’s strategy of encouraging cloud adoption, which is where most of its engineering resources are concentrated. As Microsoft phases out on-premises products, cloud adoption will continue to be incentivized through pricing changes and product innovations that focus on Teams, Exchange, and SharePoint in the cloud.
From Price Pressure to Platform Transition
The price adjustments and the larger push towards cloud computing are not an isolated shift. Microsoft is working to consolidate its tools into the cloud. Skype for Business Server, for example, will no longer receive feature updates post-release in 2025.
As of Microsoft’s June 2024 roadmap update, Skype for Business Server 2025 will not include future feature enhancements, signaling the end of its development lifecycle. Customers who continue using on-premise solutions will face higher licensing fees as the number of users continues to dwindle. However, the cloud options such as Microsoft Teams, Outlook, and OneDrive will receive constant updates and new features.
Skype’s Shutdown and Teams’ Consolidation
Alongside the price increases for on-premises server products, Microsoft is also preparing for the complete shutdown of the consumer version of Skype. The service, which has been around since 2003, will cease operations on May 5, 2025. Microsoft has confirmed that users can no longer make phone calls via Skype after this date, except for those who subscribe to premium services through Teams or the Skype web portal. These users will still be able to use the Skype Dial Pad to make calls.
The shutdown of Skype’s consumer version is part of a broader reorganization, with Teams now becoming the central platform for communication.
Users will also be able to export their chat history and contacts before the shutdown date, with Microsoft offering tools for this purpose until June 2025. However, while Microsoft encourages Skype users to transition to Teams Free, the specifics of using Skype credentials for sign-in are less clear, as no official documentation confirms this capability. Skype’s user base has dropped drastically from 300 million in 2016 to below 36 million in recent years.
Two Milestones, One Strategic Goal
The alignment of Skype’s retirement and the on-premises price hikes signals Microsoft’s ongoing shift away from traditional infrastructure toward cloud solutions. Customers will now need to weigh the cost of continuing to use on-premises server products versus migrating to cloud-based solutions like Microsoft Teams. As Winbuzzer reported, Skype for Business Server was already phased out of Microsoft Teams Rooms support in 2023, further demonstrating the company’s prioritization of Teams.
Given these shifts, the price adjustments are intended not just to increase revenue but also to consolidate Microsoft’s position in the cloud ecosystem. The company’s focus on Teams means it is increasingly difficult to justify maintaining on-premises solutions for communications, as the cost of keeping them operational becomes prohibitive.ns that delay migration to the cloud will be forced to contend with rising costs and diminishing product innovation in on-premises solutions.
This looks like it is for exchange and sharepoint. Which makes sense, unfortunately. This does not include Windows Server, SCCM, SCOM, etc ..