How migrating to Office 365 can save your business money


By now every business owner or IT professional has a good understanding of what the cloud is, however to some it's still unclear how moving to the cloud can actually save the business time and money.  When doing your cost analysis to compare building out your own on-premise solution running Microsoft Exchange or to outsource this to Microsoft Office 365, it's important to not only compare the dollar amount over several years for hardware and software, however to also include the intangible items such as loss of productivity, skilled labor to maintain the infrastructure, project costs to upgrade to the latest and greatest release, power consumption and more.  Here is a quick analysis for how migrating to Office 365 for a 50 user company can save your business money, and at the same time enable them to be more productive.

First let's look at what it takes to build and maintain on on-premise solution running Microsoft Exchange 2013.  This assumes the client is implementing a single server running Exchange 2013 with no high availability. This also assumes the business has outsourced their IT to a managed IT service provider, and is on a 3 year upgrade cycle.


-- Microsoft Exchange 2013 Standard: $670.00

-- Microsoft Exchange 2013 Standard User Client Access License: $78

-- Microsoft Windows Server 2012 R2 Standard: $878

-- Microsoft Windows Server 2012 R2 User Client Access License: $47

-- SSL Certificate: $180

Total Software: $8,178

Consulting Services:

-- Technical Architect:  60HRS @ $165/hr

Total Consulting Services: $9,900

Total 3 Year Project Cost:  $18,078

Total 6 Year Project Cost:  $36,156

Now let's take a look at what it takes to deploy Microsoft Exchange using Office 365.

-- Microsoft Office 365 Business Essentials:  $5/user/month

Total Software: $250/month

Consulting Services:

-- Technical Architect: 40hrs @ $165/hr

Total Consulting Services: $6,600

Total 3 Year Project Cost:  $15,600

Total 6 Year Project Cost:  $24,600

Without even adding in the intangible costs such as skilled labor to maintain this environment, loss of productivity should something go wrong, or power and cooling requirements, the cost of hosting your e-mail is slightly less in the first 3 years, and significantly less expensive after year 3.  This is very important and one of the key benefits to hosting with Office 365.  Unlike the on-premise solution, Microsoft will take care of all your upgrades for you when available.  When a new version of Exchange has been released, you are entitled to that upgrade as part of your subscription and require no additional skilled labor from your IT provider to get you to this new version, whereas in the on-premise solution, you now need to purchase the new software, user licenses, operating system licenses, new hardware or extended warranty for your servers etc.

Let's talk about what you get implementing both of these solutions.  In the on-premise example, we get a single Microsoft Exchange server hosted on a server  within your data center.  This gives all your employees access to e-mail from anywhere on any device which is great however, you have several single points of failure.  If the server fails, your e-mail is down until your production environment has been restored.  If your internet connection fails, users cannot access e-mail.  If you lose power , you cannot access your e-mail.  If there happens to be a natural disaster like we've been experiencing lately in Boston with over 5ft of snow in 30 days causing roofs to collapse at local businesses, your e-mail is unavailable.  You could build in redundancy and high availability to mitigate all these scenarios, but now we are just adding addition cost and complexity to your environment which requires additional skilled labor to maintain which is EXTREMELY hard to find and keep.

In a hosted solution with Office 365, you are offered a financially backed 5 9's uptime guarantee.  In the event Microsoft experiences an outage, you are receiving a credit to your account.  Microsoft Office 365 is built on highly scalable and geo redundant infrastructure that would be nearly impossible to implement locally without spending LOTS of money.  In addition to this, not only are your employees receiving access to the latest and greatest version of exchange with a near always on availability, they are also receiving access to additional tools such as Microsoft Lync Online, Sharepoint Online, Online versions of Microsoft Office Suite and 1 TB of online storage using OneDrive.  Those are a lot of features to offer for $5/user/month!  Giving your employees access to these additional tools help them become more productive since they are spending less time dealing with IT issues, and more time collaborating with their teams using tools like Lync, Sharepoint and Exchange online.

When planning your migration to the cloud, it's important to work closely with your IT advisor to find a solution that works best for your business today, and several years from now.  Take the items mentioned above into consideration, and look at all the options available (Google Apps, Office 365  etc.) before making your decision.  Ask questions, and don't accept "more of the same" solutions.

About the Author

Nick Underwood

Nick Underwood has over 15 years of experience supporting IT infrastructures for businesses across a broad range of industries.


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