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Thought Leadership

Roll up, roll up.

Microsoft 365 is the cheapest software you'll ever buy! Value proposition or business

Software Licensing

Roll up Roll Up

James Seaman

Head of Advisory Services

With that single statement I’ve probably caused anyone who’s ever signed off on a Microsoft agreement to spit coffee out over their keyboard. Sorry (not sorry). I genuinely do believe in that statement, and will explain why.

The past year has seen a massive up-take in solutions and platforms for remote working, collaboration, unified communications and all the other requirements needed for work forces to continue to operate from their spare rooms, sheds, garages, or anywhere else they can perch a laptop (ironing boards anyone?). Services like Microsoft 365 have seen their userbase explode at a huge rate – and as I have already pointed out – this is NOT cheap. So “why-o-why” I hear you cry, do I (a normally sane(ish) human being) make such a bold statement as “...the cheapest software you’ll ever buy!”.

At the core of this belief are two elements. The first is how we assess cost, and I mean True Cost of Ownership (TCO), not just sticker price. The second is how we assess value to the organisation (cue the groan from all of my beleaguered colleagues who have heard me talk about Cost vs Value one too many times).

First, cost.

In terms of cost, for many organisations having a productivity suite is a binary choice. The users either need it or they don’t. Productivity software rarely falls into the ‘nice to have’ category. Realistically, the choice for organisations is Microsoft 365, Google Workspace, or a mixed deployment. I mean ‘mixed deployment’ because, in my view, outside of the Microsoft and Google suites there isn’t really a comparable offering that covers productivity apps (Word/ PowerPoint/ OneNote/ Excel etc), email, file storage and collaboration.

In my opinion, for most organisations, a mixed deployment is a more expensive option. “But wait” I hear you say. “There are lower cost or open source alternatives to ALL of those components”.

Correct. However, most organisations will not save cost by using them. They’re simply moving cost elsewhere. Self-Assembly solutions have integration costs, management costs and training costs (Cost of Change).

This is where true cost and true value collide. Office productivity tools are a foundational component of the IT infrastructure and service. For many users they’re utility services and just as essential as power, connectivity and hardware. Foundational infrastructure MUST be easy to use, and it forms almost a natural monopoly or oligopoly, where standards converge to what works for the majority.

So how does that play into the true cost?

True Cost is a function of:

  • Initial and ongoing spend
  • Cost of transition
  • Maintenance cost
  • Lost productivity from any changes
  • Opportunity cost of incompatibility
  •  Lost productivity due to unfamiliar software
  • Search, hiring and training costs

For a widely deployed toolset, the overall financial commitment is often dwarfed by the other cost factors.

As an example and for ease of maths, let’s say the cost of Microsoft 365 E3 is £18 per user per month and that your average blended cost per employee is £18 per hour. At 20 working days per month, three minutes of lost time per day is enough to equal the cost of E3 licensing. Such a small amount of time can be easily lost and multiplies to significant sums when spread across a large number of users. To that end, simplicity and common knowledge is key. Long gone are the days when proficiency with Microsoft Office was something you’d put on your CV (though I’m sure many people still do), it’s just something that’s expected of anyone working in an office environment. While there will be different levels of experience, employees will often be able to help each other resolve issues, rather than reaching dead ends or requiring extensive training before achieving value.


Smiling laptop

But what about value?

The capability of platforms such as Microsoft 365 and Google Workspaces are much wider and deeper than just the mainstream back office tools we were used to. Just take a quick look: click on the Apps tab in your Microsoft 365 account and I guarantee there will be either an App you don’t know about or at the very least, an App you have never opened or used.

Yet you should use them, because this is where you drive extra value, both tangible and intangible. There are opportunities for data integration, automation, workflow and app creation. Real opportunities exist to maximise value, remove complexity and simplify process for most organisations. I truly believe maximising the effectiveness of the functionality available within these platforms is where the scales tip in the favour of “Value” against the cost…That said – “Kaizala” – Really? We needed that App did we?

The proliferation of these tools with a common interface style and design language should not be underestimated, and it allows organisations to hire new staff with confidence that their new employees will be able to use the basic tools unattended. This may well change in the future, organisations with very young or technically inclined workforces might find little or no difference in their workers’ knowledge of Microsoft and Google products. Specialised industries, such as certain creative fields, may find that their staff prefer an all-Apple approach. These areas are important to understand in order to understand the hidden cost and choose the right tools for the job, in order to maximise productivity.

So, a question for leaders reading this: How much money would your organisation lose if you lost Microsoft365 or Google Workspace for a week?

And now a question for the admins reading this: how long would it take you to move your organisation from Microsoft365 or Google Workspace to an open-source solution (e.g LibreOffice + Jitsi + Zimbra or open-Xchange)? And how much would that cost? Answering these should give you a fairly good idea of cost vs benefit/value. This is not to say that you should blindly agree to be forever betrothed to Microsoft 365, just that it’s not worth thinking about too much. As with any product in the portfolio, there should be regular reviews to make sure it’s still fit for purpose that looks at any shifts in the market that mean you should switch, or other factors that would impact the utility of the product. My point is, don’t overthink it. It’s a bit like buying a car if your choices are Petrol, Diesel or Electric drive. Could you conceivably go for LPG? Hydrogen? CNG? Well yes, but is it really worth all the hassle? Do you not have better things to be getting on with?

My advice?

Focus on the value proposition based on your business and the users’ needs and not the business case. “Counting the beans” based purely on purchase price is a road to nowhere (potentially).