Microsoft Office 365 How Do You Know What You Really Need?

Office 365 licensing is surrounded by a great deal of confusion.  What is Office 365?  What plan do I require?  Do I require the full suite?  Should I purchase User Subscription Licenses or Add-0ns?  It is no secret that Microsoft is aggressively promoting and selling the service.  The key question to ask is what is Office 365?  The most common answers are related to Office 365 E3.  E3 contains Exchange Online, SharePoint Online, SkypeforBusiness Online and Office Professional Plus.  Most people are unaware that you can purchase a single service such as Exchange Online (YES, even in your EA) instead of the bundle.

My experience is that most people relate a desire to move to Exchange Online to purchasing Office 365 E3.  When asked why they are considering Office 365 the answers range from “we want to reduce our email storage costs” or “we plan to move our mailboxes into the cloud”.  Other Online Services seem to garner less interest (although there seems to be a bit more interest in SharePoint Online lately).

What is shocking is how many organizations interpret a desire to move email to the cloud as a need to negotiate an Office 365 E3 deal with Microsoft.  Most simply do not realize that alternatives exist (such as purchasing only Exchange Online).   It could cost millions more if these options are not considered.

If considering a move to the cloud ask the following questions (these are just a few examples):

  • What Services am I really looking to purchase? Is it just Exchange Online?
  • How quickly will a migration occur? How will users be moved?
  • Are all users the same? Do they all require E3?  Do they all require features of Exchange Online Plan 2?
  • What contractual rights exist? What risks or benefits does purchasing one have over the other?
  • Do User Subscription Licenses (USL) or Add-Ons make sense?
  • Have I evaluated the benefits and risks of USLs to Add-Ons?

What about Office?  How does this factor into the decision making criteria?

The short answer is it shouldn’t.  This surprises many people.   Office is a prominent part of the E3 product and does deserve consideration.  An evaluation of purchasing Office 365 Office Professional Plus versus perpetual licenses for Office Professional Plus should be conducted.  Consideration for comparing “Run to Click” to on premise Office, understanding the value/risk of Microsoft pushing updates, the value (if any – it is surprising how often there isn’t any) in user based Office licensing, VDI or BYOD environments and many others.

If negotiating an Office 365 purchase, review the options and consider proposals for:

  •  Exchange Online instead of E3
  • Renewing SA and purchasing add-ons instead of USLs
  • Purchasing licenses through an Office 365 transition versus upfront commitment
  • Buying as you go versus all upfront

It is surprising what can be learned by asking these questions, not to mention the cost savings you may see.

About the Author:

With 15 years of experience with Microsoft Licensing, Mike’s portfolio spans multiple industries including: financial services, high tech, manufacturing, media, health care, government and retail. From medium sized organizations to the Fortune 100, Mike’s clients regularly realize savings of 20-40% from his expertise in their negotiations of Enterprise Agreements and customized Software Agreements. Additionally, Mike assists with software asset management and audits in the prevention of over-purchasing ensuring terms and conditions that reflect actual usage. Mike has successfully negotiated more than 300 EA contracts totaling over $1 billion.

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