This is going to sound like a dumb question, but is Office 365 a cloud productivity solution? Or simply an easier way to license Microsoft apps across the enterprise?
Take a look around and the answer isn’t quite so clear.
While using the Office cloud suite has been shown to unlock a more connected, collaborative and efficient business, there is evidence that many organizations are simply not using it that way. Instead, they’ve bought Office 365 simply to take advantage of a more simplified licensing solution.
Not only is this leaving a huge opportunity on the table, this limited approach might not be as financially powerful as many IT leaders believe.
By the numbers
Taking a look at our own client base, Office-as-licensing-tool is happening on a major scale. We have sold millions of “seats” to Office 365 – licenses for unique individuals at a company – but only 37% of those units were actually deployed for cloud productivity apps such as Exchange Online. The remaining 53% of seats are sitting on the shelf, as users continue to rely on the traditional native apps that are also made available when O365 is bought. (It’s not just Softchoice; this number lines up with what we’re hearing is the channel average ratio of seats deployed to non-deployed).
So what? In the simplest terms, it means organizations are buying Office 365 licenses but not using the actual Office 365 products, a majority of the time.
The reason they are doing this is fairly simple. People are attracted by a much simpler approach to licensing offered when purchasing Office 365, one that allows you to license per-user, versus per-device, and which also allows up to 5 installs for that user across his/her various devices. This friendly approach is a shoe-in for our mobile-heavy, BYOD era. And it’s also believed to lead to reductions in volume licensing costs overall, in some situations. But is it that much cheaper than traditional means of licensing? And could businesses be doing more to save money and improve their organization with Office 365 if only they deployed it?
We wouldn’t be writing this article if the answer was “no.”
Is Office 365 licensing really cheaper?
As with most major and complex technology investments, finding simple answers is always difficult for the most important questions. This is the case when asking if Office 365 licensing is more cost effective than the volume licensing of native products like Office 2016. It’s undeniable that O365 offers tremendous flexibility to organizations in terms of changing licensing models over to a capital expense, from an operations one. As a monthly cost, it also provides more predictable financial planning. And in many cases, it is well worth it from a straight cost savings basis, when compared to a regular 5-year refresh rate to Office 2016 software, for example.
But when you dig into the details, complexities and challenges arise that might get in the way of users fully realizing those cost savings. An example of this is just how complicated it can get to track user licenses, and adjust according to their needs as they move throughout the business, or potentially leave the business. In short, while licensing with Office 365 is an attractive option, it’s not a guaranteed win for the business.
So what about the other benefits?
Even if you’re happy with using Office 365 as a licensing tool, you are leaving tons of opportunity on the table if you are not fully leveraging the technology as a way to radically improve your business infrastructure. And while the changes that come with the cloud take months of planning to execute – we aren’t saying they happen overnight — they are valuable to keep in mind as you lead the way in your strategic planning for the year ahead.
In other words, if you want to know the true total cost of ownership and potential returns of Office 365, you have to consider the other benefits that come when you use it to overhaul your infrastructure. These benefits are worth highlighting, here:
- Reduction infrastructure costs: as you port your key productivity applications to the cloud, you reduce your need to build and manage servers and storage compounds. You’ll cut down on hard costs associated with hardware, cooling, heating and so on.
- Increased uptime: Microsoft’s 99.9 % uptime guarantee is something that you, realistically speaking, can’t beat with your own team on a long-term basis. In other blogs (link to new CSP blog) we dig into that number in detail, but in general, teaming up with Microsoft’s own data-center crew has its advantages and is reassuring to any business with constant uptime requirements.
- Liberty to innovate: if done right, you’ll be able to find more meaningful roles for your team, and spend less time slogging away at pure maintenance and admin roles. This is essential in the age of IT as business leader
- A truly social enterprise: Remember, Office 365 is so much more than just Office in the cloud. It offers access to unique, truly revolutionary tools – such as Yammer – for your team to connect and work together to get their jobs done.
Finally, with the proper roll out, you can ensure Office 365 is adopted en masse across the organization. A situation that we’ve shown can lead to a more engaged, productive and happy workforce.
If you’re a business thinking of Office 365 – or you want to take your existing investment in the cloud further – contact a Softchoice Representative today. Ask how our Office 365 Complete solution can help you get the most from this ground breaking technology, without the hassles or pains.