How can a business judge whether Office 365 is an appropriate solution for them? What are the costs and benefits of migrating? We take a look at some of the benefits of Office 365 compared to an on-premises Exchange server.
From the late 1990s through to the 2010s, business email has typically relied on having an up to date on-premises server to host and run a local copy of Microsoft Exchange. Having an internal email server meant businesses had total control over their email infrastructure, and Microsoft Exchange was (and remains) a very powerful email, calendaring, task management and contact management solution.
As with any powerful piece of software, increases in power and flexibility meant a substantial growth in complexity. Building and maintaining an on-premises Exchange server is highly complex and time-consuming, and these requirements grow exponentially if a business needs to support more than one office location, third-party software (such as anti-spam solutions or enterprise software applications) or large numbers of users.
In the early years of this decade, Google Apps, along with other providers, started aggressively pushing online “cloud” email solutions into the business marketplace. Apart from advantages of availability and simpler management, cloud email reduced the reliance of businesses on local servers, and the growth of online email solutions threatened Microsoft’s dominance in business computing.
Microsoft’s response was to invest heavily into its own cloud solution, Office 365. Two major factors now impact upon the considerations of business email solutions: the availability of a robust online (“cloud”) email infrastructure platform, and the retirement of the Small Business Server platform.
Office 365 is a cloud service. Unlike an on-premises server, access to email through Office 365 is not dependent on the availability of internet connectivity in the business’ office. For some Australian small businesses struggling with internet reliability, this can represent an improvement in email reliability.
As a hosted service, Microsoft takes care of the service and its infrastructure. With a Service Level Agreement of 99.99% availability, Office 365 should always be available to any user with internet access. If internet service to the business’ head office is interrupted, email is still available to those working from other offices, on the road or from home. With the increasing mobility of the modern workforce, along with the explosion in personal devices (phones, laptops and tablets) the requirements to support remote access on multiple devices rise exponentially, and Office 365 mitigates some of this complexity for a business’ IT support.
This also means that the computing resources that might otherwise have been dedicated to running a local Exchange server, on an existing or new server, are not required. Reducing the server requirements in an office, and the complexity that is required for managing multiple server functions, can improve the productivity of the business as a whole even before email reliability is considered.
Office 365 doesn’t just do email. Exchange Online is a large part of the offering and the reason most businesses consider it, but Microsoft is building and adding on other services that further increase the return on investment. All the functions of Exchange Server are covered – email, contacts, tasks, calendars and appointments and public folders. But all Office 365 accounts also include:
- OneDrive space for the licensed user: each user gets (currently) 1 TB of space for file storage.
- Skype for Business (previously Lync) – an instant messaging and desktop sharing application, combined with internet telephony and videoconferencing.
- Sharepoint Server – hosting for an internal business website in the cloud, covering file storage and sharing, internal communications and collaboration.
- Office Online apps: while some premium licenses for Office 365 include rights to download and use desktop versions of Office applications, all licenses allow use of the online versions of Microsoft’s office software. Just be aware of limitations of file access: the online versions of Office applications are built to operate with Microsoft’s cloud storage through Sharepoint or OneDrive.
- Collaboration tools including Yammer, Delve and Sway. All of these tools have their strengths and weaknesses and we will look at them in more detail over coming issues of this newsletter.
The combination of collaboration, information management and productivity tools with the Exchange services a business needs combine to produce an ecosystem that, if used properly, can revolutionise the way a business operates.
Until 2015, Microsoft made the decision for SMEs easy, by providing the Small Business Server suite of software. Small Business Server bundled a recent version of the Microsoft Server platform with a full copy of Exchange Server. Together, these provided all the software infrastructure a SMB could need to run their operations, and it became a very successful offering. By one estimate, up to 85% of small-to-medium businesses (as surveyed in 2004) either implemented or planned to implement Small Business Server, and that was early in the bundle’s extended life. For a very attractive price, businesses obtained the software (and initial licenses) to run a server and an in-house email platform.
With the release of Windows Server 2012, Microsoft no longer offers a Small Business Server bundle. Cloud email offerings from Google (and others) have showed that the momentum for SMBs is towards cloud hosting for their email and other services. Microsoft has recognised that the idea of a small business hosting an internal server (for email specifically, but also eventually for file and domain services) is one with a very limited lifespan.
With Small Business Server retired, businesses are left with two very different upgrade paths. It is still possible to license and install an on-premises version of Exchange Server, and this might be the way forward for a large business with complex requirements, or concerns over service reliability or data sovereignty. However, there is no longer a low-cost option to achieve this: it is required to buy a host server, and separately purchase and install an instance of Exchange. Microsoft also does not recommend installing Exchange on a domain server, meaning that a best-practices installation requires a separate server dedicated to hosting the email function, further increasing the cost and complexity of this solution. Finally, there are license costs involved: each user of Exchange requires both a server access license and an Exchange server license.
The other upgrade path, and clearly the one Microsoft is pushing for SMBs, is towards Office 365. To this end, Microsoft offers a no-frills, low-cost on-site server option that suffices to run internal network management but does not include email. If your business server has reached end-of-life (or experiences a failure that requires replacement) replacing it with a new on-premises Exchange server may cost significantly more than implementing Office 365 for your email, even before maintenance costs and availability benefits are considered.
Return on Investment
Forrester Research ran a comprehensive analysis of return on investment for a hypothetical mid-size business. The analysis returned an overall ROI of 162%. (You can read about the case study here.) Naturally, each business’ return on Office 365 will be different based on its mix of staff requirements as well as the level to which the various components are utilised. To get the most value out of Office 365, a business should expect not only to use it for email and calendar appointments, but to capitalise on the other offerings included in an Office 365 license. Adams Consulting Group can work with you to identify the opportunities available to improve your business productivity.