Moving Email Traffic from Exchange to Azure Communication Services

Microsoft

Jun 05, 2025

Today, businesses are continuing to modernize their email infrastructure and are looking to boost security, scalability, and efficiency. In addition, with Exchange recently announcing limits for external recipients (ERRL, TERRL), businesses are now seeking cloud-managed email platforms, like Azure Communication Services to handle high-volume email traffic.

This article describes the important steps and considerations for transitioning from Exchange Online or other on-premises solutions to the Azure Communication Services email platform. It is also relevant for customers migrating from other mail solutions, whether on-premises or hybrid, to Azure Communication Services.

Introduction

Exchange Online and Google Workspace restrict the number of emails that can be sent to external recipients. For example, Exchange Online limits external recipients to 2,000 per day, while Google Workspace has a limit of 3,000 per day. These restrictions can impede businesses that need to send large volumes of emails. In contrast, Azure Communication Services does not have such limitations, making it a suitable solution for businesses with high email traffic requirements. In addition, Azure Communication Services email has also released support for Modern Authentication using XOAuth.

Deprecation of Basic Auth for SMTP – Exchange online is retiring its support for Basic Auth for Client Submission (SMTP Auth).
External Rate Limits - Exchange Online does not support bulk or high-volume transactional email. Exchange is introducing External Recipient Rate Limits (ERRL) and Tenant Outbound Email Limits (TERRL). These limits are designed to reduce unfair usage and abuse of Exchange Online resources. Customers who need to exceed these limits are advised to use HVE for bulk internal messages or Azure Communication Services to support bulk internal and external messages.

Why Are Customers Moving to Azure Communication Services Email?

Customers are considering moving to Azure Communication Services for several reasons:

No External Recipient Limits: Unlike Exchange on-premises, Exchange Online, and Google Workspace, Azure Communication Services does not impose limits on the number of external recipients. Currently, Azure Communication Services can handle up to 2 million emails per hour, with the potential to support even higher traffic levels, which requires close coordination with our field and product teams. Visit our documentation to learn more about our email throughout (quota) limits, key requirements and process to upgrade email throughput.
Enhanced Security: Azure Communication Services supports TLS 1.2 encryption and authentication with Microsoft Entra application IDs, ensuring secure email delivery.
Scalability: Azure Communication Services can handle high-volume email traffic, making it suitable for large-scale B2C communications.
Centralized Management: Businesses can manage all outgoing emails from a single platform, simplifying administration and monitoring.
Advanced Analytics: Moving to Azure Communication Services helps customers better manage their B2C communications and understand ROI using advanced analytics. This includes tracking Non-Delivery Reports (NDRs) and engagement analytics. Customers can use Azure Storage to store these logs or utilize near-real-time signals through Azure Monitor.
Cost Efficiency: Azure Communication Services offers competitive pricing and flexible pay-as-you-go options, making it a cost-effective solution for businesses of all sizes (ACS pricing).

Key Features in Azure Communication Services Email

Azure Communication Services email service offers a range of features that makes it an attractive option for businesses:

SMTP Service along with API/SDK support: Azure Communication Services provides a robust and scalable SMTP service for sending emails. Customers can also leverage our language specific SDKS, REST APIs, PowerShell command lets, Power Automate connectors, etc. to send their email traffic.
Bulk Email Capabilities: Azure Communication Services facilitates high-volume transactional, bulk, and marketing emails, supporting application-to-person (A2P) use cases. This is particularly useful for businesses that need to send large volumes of emails efficiently.
Authentication Options: Azure Communication Services supports multiple authentication methods, including local or basic authentication, modern authentication using OAuth. Azure Communication Services also supports managed identities via RBAC (GitHub sample).
Low-Code PaaS Solution: Azure Communication Services offers a low-code platform-as-a-service (PaaS) solution, making it easy to integrate and manage email services.
Sender Authentication: Azure Communication Services enables sender authentication through SPF, DKIM, and DMARC, ensuring email security and deliverability.
Overcoming external email limits: Azure Communication Services provides a solution to overcome the limitations of Google Workspace, Exchange on-premises and Exchange Online, such as the external recipient rate limits, and basic authentication deprecation. This ensures that businesses can send emails without facing these constraints.
Advanced Analytics: Azure Communication Services provides detailed insights into email delivery, engagement, and performance.

How is Azure Communication Services different from Exchange?

Azure Communication Services uses a Pay-As-You-Go model, unlike EXO's subscription (Pay-per-seat) model. To use Azure Communication Services, an Azure subscription is required. Many organizations have an existing process to obtain an Azure subscription for their employees. Alternatively, an Azure subscription can be purchased directly from the Azure portal.

Architectural Considerations

When moving from Exchange on-premises, Exchange Online, or any other 3rd party Mail Server to Azure Communication Services, there are several architectural considerations to keep in mind:

External storage for emails - Customers need to understand that Azure Communication Services is not a mailbox-based solution. It is primarily designed for application-to-person communications, where applications can utilize their own storage for the bulk email traffic sent through Azure Communication Services.
Infrastructure Assessment: Evaluate your existing email infrastructure, including on-premises Exchange servers or Exchange Online configurations, including also any other component present in the messaging stack.
Integration with Existing Systems: Ensure that Azure Communication Services can seamlessly integrate with your current systems and workflows.
Compliance and Security: Ensure that the new setup complies with data-handling and privacy requirements.
Flexibility to manage multiple app connections: Azure Communication Services allows customers to manage traffic from multiple apps using one or many Azure Communication Services resources. Customers can manage access to these resources using Microsoft Entra application adding another layer of security.
Modernization challenges: Many enterprise customers are still in the process of modernizing their applications and multi-functional devices (MFDs). These apps and MFDs do not support authentication or TLS encryption, which are mandatory requirements to use Azure Communication Services. In such cases, customers can refer to an open-source hybrid solution while they continue to update their applications and MFDs. For more details, please refer to this GitHub Wiki.

Total Cost of Ownership (TCO) Comparison

Managing an on-premises SMTP server can be costly and complex. Here are some key points to consider:

Infrastructure Costs: On-premises SMTP servers require significant investment in hardware, software, and maintenance.
Operational Costs: Managing and maintaining on-premises servers involves ongoing operational processes. If the on-premises infrastructure is used for mass-mailing IP reputation maintenance costs must also be considered.
Scalability: Scaling on-premises infrastructure to handle increased email traffic can be challenging and expensive.
Public Cloud Email PaaS: Adopting a public cloud email PaaS like Azure Communication Services email SMTP reduces TCO by eliminating the need for on-premises infrastructure and providing a scalable, pay-as-you-go model.

How to get started

The Azure Communication Services team continues to support the customer onboarding journey. While our public documentation provides all details required to support a smooth process, we have also created video demos and quick starts to help customers get started right away.

Testing approach

Test all failure scenarios but avoid sending high volume traffic with high failure rates as it poses challenges.

As Azure Communication Services team, we may not always have visibility on your approach. Therefore, we may interpret high failure rates in QA as an issue.
In case you are sending this test traffic to 3P mail servers, it might impact your domain reputation and Azure Communication Services IP reputation.

Do not mix high volume throughput testing with failure rate testing. If you do, use third-party tools for getting dummy emails (please research appropriate tools), make sure to mention the details on 3P tools in your support ticket for raising quota.
If you are using third-party tools, a gradual ramp-up is not required. However, if you are using email IDs that will target third-party mail servers during QA testing, ensure a gradual ramp-up of the traffic even in a QA environment.