For clients evaluating enterprise messaging and collaboration platform options, Microsoft Office 365 comes up early and often. In fact, Office 365 is growing like gangbusters. Microsoft’s new Chief Executive Officer, Satya Nadella, ran the company’s Cloud and Enterprise group, which is where Office 365 lives, so it’s a safe bet that Office 365 will continue to be a centerpiece of Microsoft’s devices and services strategy. However, some confusion in the market on the commercial and operational aspects of Office 365 have people asking about how it’s evaluated, how it’s purchased and how it’s governed.
Here are the Top 5 key points to keep in mind when evaluating Office 365:
1. Consider cost as highly dependent on an Enterprise Agreement (EA). Microsoft wants customers to renew their EAs. Customers that already have an EA have significant leverage with Microsoft to reduce the per employee cost of Office 365. The kicker here is that you’re paying for a 365 Office license when (assuming you’ve paid for Software Assurance) you’ve already paid for the right to upgrade.
2. Remember Office 365 is not outsourcing. Unlike a traditional outsourcing agreement in which the outsourcer manages all aspects of the messaging (including hardware, software and system administration), with Office 365 you’ll retain system administration responsibilities. Among these responsibilities are creating new mailboxes, diagnosing mail routing issues, configuring security profiles and executing legal holds.
3. Be prepared to accept standard contract terms and service levels. Given the multitenant architecture of Office 365, all but the largest customers will need to accept most Microsoft standard terms and service levels. Although Microsoft will show contract negotiation flexibility in areas that are not restricted by the shared delivery model, that flexibility is highly dependent on contract size, geography and vertical. To be safe, check out Microsoft’s standard online services description before evaluating Office 365.
4. If you’re a Microsoft Exchange shop, assume that you’ll implement a co-existence architecture. Adding Office 365 to your Exchange environment means you will collaborate both in the cloud and on-premises for two reasons. First, a subset of mailboxes are generally planned to stay on-premises for security, disaster recovery and ensuring a linkage to legacy applications. Second, most organizations use SharePoint as a development platform with a significant amount of custom code, rather than simply a collaboration tool. The Office 365 version of SharePoint does not yet support this deep level of customization, so for the time being, this activity needs to remain on-premises (or migrated to Azure).
5. If you’re a Lotus shop, assume that you’ll have to fully decommission Lotus to make your business case. Running multiple collaboration systems will often break a business case given the fixed amount of software licensing and support required to simply keep the lights on with each platform. If Lotus has been highly customized or is used as an enterprise collaboration platform, fully decommissioning it can be a daunting task.
Office 365 is a compelling offering from Microsoft, but Office 365 — as well as other leading software-as-a-service offerings — should be evaluated based on the strategic advantages your organization gains as well as the more traditional side-by-side cost and features comparisons.
ISG can help you sort through these decisions. Contact us if you’re evaluating or have implemented Office 365.About the author
Stanton helps enterprise IT and sourcing leaders rationalize and capitalize on emerging technology opportunities in the context of the global sourcing industry. He brings extensive knowledge of today’s cloud and automation ecosystems, as well as other disruptive trends that are helping to shape and disrupt the business computing landscape. Stanton has been with ISG for more over a decade. During his tenure he has helped clients develop, negotiate and implement cloud infrastructure sourcing strategies, evaluate and select software-as-a-service platforms, identify and implement best-in-class service brokerage models, and assess how the emerging cloud master architecture can be leveraged for competitive advantage. Stanton has also guided a number of leading service providers in the development of next-generation cloud strategies. Stanton is a recognized industry expert, and has been quoted in CIO, Forbes and The Times of London. You can follow Stanton on Twitter: @stantonmjones.