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Am planning the migration for my companies move to O365, however I am having a hard time finding an answer to one question.

If one sets up the hybrid environment as Exchange 2010 based, will the functionality/features of Office 365 be affected once the hybrid environment becomes just Office 365 hosted mail, as opposed to if I upgraded Exchange 2010 to 2016 prior to putting Exchange/Office 365 in hybrid mode, and eventually going sole Office 365?

If not, what is the advantage of upgrading to a later version of Exchange if the goal is to completely migrate Exchange to Office 365?

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I'm not aware of any impact to the functionality/features of Office 365 based on your hybrid configuration so it probably doesn't matter. That being said, you'll need to keep an on premises Exchange server for the foreseeable future in order to manage email related attributes of your Office 365 users and groups, so it probably behooves you to migrate/upgrade to the latest supported Windows and Exchange version on premises.

From Microsoft

Customers with a hybrid configuration often find after a period of time that all of their mailboxes have been moved to Exchange Online. At this point, they may decide to remove the Exchange servers from on-premises. However, they discover that they can no longer manage their cloud mailboxes.

When directory synchronization is enabled for a tenant and a user is synchronized from on-premises, most of the attributes cannot be managed from Exchange Online and must be managed from on-premises. This is not due to the hybrid configuration, but it occurs because of directory synchronization. In addition, even if you have directory synchronization in place without running the Hybrid Configuration Wizard, you still cannot manage most of the recipient tasks from the cloud.

https://docs.microsoft.com/en-us/exchange/decommission-on-premises-exchange

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  • Was only going to keep the on-prem exchange server going until all mailboxes are migrated. Is the last part of your answer suggesting that there is need to keep it in service longer than this?
    – user66001
    Commented Jan 25, 2019 at 18:30
  • Yes, I am suggesting that. This is a well known issue. Read the linked article in my updated answer.
    – joeqwerty
    Commented Jan 25, 2019 at 18:47
  • Well that seems really silly of MS to do that. Have a server needing resources dedicated to it, backups taken of it, and updates scheduled for it, just to facilitate what could be an occasional management task. I am not aware of any reason why Exchange online cannot expose the same funcationality as Exchange Management Console or Shell. Such a shame...
    – user66001
    Commented Jan 25, 2019 at 20:31
  • Microsoft employs the best and brightest engineers in the world. I'm assuming that this is an extremely complex and difficult challenge to solve.
    – joeqwerty
    Commented Jan 25, 2019 at 20:57
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In hybrid deployment, you need to mange the migrated mailboxes via local Exchange server. There is no other function difference in function/feature.

Though Microsoft recommend to keep one Exchange server but it is also fine if you want to use Office 365 only. You could refer to the scenario one mentioned in the following article: https://docs.microsoft.com/en-us/exchange/decommission-on-premises-exchange

Scenario one

Issue: My organization has been running in a hybrid configuration and I have all of my mailboxes in Exchange Online. I do not need to manage my users from on-premises and no longer have a need for directory synchronization or password synchronization.

Solution: Since all of the users will be managed in Office 365, and there are no additional directory synchronization requirements, you can safely disable directory synchronization and remove Exchange from the on-premises environment.

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  • Since all of the users will be managed in Office 365, and there are no additional directory synchronization requirements, you can safely disable directory synchronization and remove Exchange from the on-premises environment. - This is valid only if you don't want SSO, you don't want password synchronization, you don't want password writeback, and you don't mind managing users on premises and in the cloud as separate identities. If you DO want those things then you can't disable directory synchronization.
    – joeqwerty
    Commented Jan 28, 2019 at 2:47
  • I know this and this is mentioned in the link.
    – Jayce
    Commented Jan 28, 2019 at 3:14

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