Managing Remote Mailboxes Without the Last Exchange Server

The chances are, if you migrated to Exchange Online from on-prem using the Hybrid Exchange method you’re stuck with that last on-prem Exchange server. You need it just to tweak mailbox settings, change aliases and to set other attributes on those mailboxes that you migrated ages ago. This creates an unnecessary maintenance burden (patching, monitoring  etc.), security risk, and cost, especially when you consider that the licensing cost of Exchange Server rose by 10% in July of this year!

Applicable can help with planning, testing and implementation..

So What’s Changed?

Microsoft is now previewing a new Exchange Online feature allowing cloud-side control, even for users synced from an on-prem Active Directory. Administrators can now manage Exchange-specific mailbox attributes directly through Exchange Online (via Admin Center or PowerShell), while core identity attributes, like user name, department, phone, etc. remain controlled on-prem.

In short, a new switch tells Microsoft 365 to manage mailbox attributes in the cloud instead of on-prem. Flip it, and you’re free from the last server.

IsExchangeCloudManaged

False (default): Mailbox attributes stay on-prem and are synced to the cloud.

True: Control moves to Exchange Online, avoiding overwrite by on-prem sync.

Two-Phase Rollout Approach

Phase 1 – Preview (available now):

Per-mailbox opting-in for cloud management, including rollback capability and default for new users expected in September.

Phase 2 – Coming Soon:

Cloud changes sync back to AD for consistency.

Strategic Benefits for Your Team

• • Near-term Opportunity to Decommission: No more “last Exchange server.” Recipient settings can now be modified entirely in the cloud, so no need to have a good grasp of powershell or to understand the on-prem Exchange Admin Centre. Like all other Microsoft 365 admin, it’s done in the online Admin Centre.
  • Faster, Leaner Service Desk Operations: No more RDP or specialised scripts or tools. Service desk staff can handle mailbox tweaks directly in online admin centre.
  • Better Onboarding Automation: New users can follow a streamlined path: Create AD user → sync → assign mailbox → flip switch—and settings are immediately fully manageable in the cloud.
  • Ideal for Hybrid Transitions (M&A or multi-forest): You can standardise mailbox administration in the cloud

• A Step Toward Full Cloud Governance: Aligns with Microsoft’s broader move to cloud first identity.

Microsoft’s new cloud-managed mailbox capability finally lets IT teams retire that last Exchange server. It’s simpler, safer, and cuts ongoing costs. Applicable can help you design the right strategy, automate the transition, and fully decommission on-prem Exchange, future-proofing your Microsoft 365 environment for the long term.