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Cracking Office 365 licensing: Improvements and considerations

Microsoft | Posted on April 5, 2011 by Faisal Mumtaz

Cracking into Office 365 licensing complexities

Licensing can be a tough nut to crack. The good news is that Microsoft is making the Office 365 licensing process a lot more flexible than with previous offerings.

With the announcement of the cloud-based suite, which includes hosted versions of the latest Lync, Sharepoint and Exchange, and a “full” version of Office apps, there’s plenty of buzz (and uncertainties) about what this new technology will mean for productivity and business needs. But one thing seems pretty clear: licensing as we know it is fundamentally different with Office 365.

>> New! Listen to our podcast with Faisal to get even more details on Office 365 licensing

Not only is Microsoft taking a major pivot by offering it as a subscription, but licensing on a per-user basis is a significant shift that will translate into more capabilities for IT leaders to wrangle budgets, ensure compliancy and tailor licensing functions to the specific needs of end users.

Mobility is reflected

Office 365 is more reflective of a modern, mobile workforce. In the past most enterprises licensed their devices identically, giving each device the same access and applications. Depending on your environment this was sometimes costly and inefficient (sometimes paying several times for the same user to use the same technology across many devices.)

Fact is: Not all users need the same access and they definitely don’t all use the same applications. If one employee had several devices (ie: Desktop PC, Netbook, Laptop and Home Computer) each device would have to be licensed individually creating a huge cost for the enterprise and, more often than not, making multi-device use impossible or prohibited.

Is Office 365 More efficient?

Per-user licensing can potentially increase efficiency in several ways. The plans associated with Office 365 allow you to customize users’ access and applications by the role they play within the company. This customization provides employees with access to the products they need while saving you money by restricting them from the products that they don’t need.

On top of this, offering the cost as a subscription means companies can look at it as an operational expense (OpEx)- making it a more manageable investment.

What’s the bottom line?

We know new product implementation always comes down to the bottom line. Many customers want to know if 365 will unlock licensing savings. The short answer is: not necessarily.

What is important to remember is that when looked at as a whole, 365 offers a vehicle for tremendous gains in productivity and eventual bottom line savings. In other words, if 365 is introduced into the right environment it could definitely reduce an enterprise’s total cost of ownership (TCO).

For instance, hosting Exchange and other mission critical apps offsite pays an immediate benefit to your data center. Less demand on hosting technology onsite means you are able to lessen your “footprint” in the data center and likely lower cooling and maintenance costs.

Getting through the cloud complexity

Although Microsoft has added flexibility with “Office in the cloud” it’s still fairly complex to identify the “right” licensing scenario, or if it’s right for you, when looking at this solution. Office 365 comes in many flavours, all of them with drastically different pricing and functionality.  You should be looking at users, or user groups, individually and assessing which plan works best for each group/user.

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