75 User Exchange On Prem vs. Office 365 Cost Comparison
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Maybe this needs to be a new thread but since there's background here I'd be looking for recommendations. At 75 users I'm looking at a little over $43,000 for software/licensing costs for on-prem. Microsoft Business Standard at 12.50/month for 75 users puts me at $14,202 annually if I include the cost to use Veeam 0365 backup. I'm not sure that I need that, but I've seen enough stories out there about users losing their mail that I may want to utilize that for backups. So for just the software costs I'm looking at about 3 years before break even. If I add in power, administration, etc. that extends that time frame a little. We just went 10 years though without upgrading Exchange and Office. Additionally, as I mentioned earlier, management would like to kick the tires on Teams and Sharepoint. So being that we want to stay with Exchange and the Microsoft Office suite, would you guys lean one way or the other?
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@Dragon3303 said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
So for just the software costs I'm looking at about 3 years before break even.
A general rule that I use is.... when it comes close to break even, err on the side of modern / hosted / as the vendor projects the future. Why?
Because it lowers risk. The hardest thing to calculate in your overall costs are risks and opportunity. Now, of course, risk means that we just don't know something, so it is always possible that on prem will have some unforeseen advantage in the next five years for you, but that's much less likely than the hosted option having an unforeseen advantage.
If the hard costs are anywhere close to each other, then the on prem needs to be ruled out unless there is some other driving factor pushing it forward.
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Another way to look at risk here is that with the on prem solution, you are committing to 5+ years of your chosen solution. You aren't just deciding that on prem is the way to go today, but that it will stay the way to go for a long time. Five years is a really long time in IT terms for any solution to remain something that you are happy with.
With O365, your commitment is by the month or maybe one year at a time, but never close to five years. That's some serious risk prevention right there. Choosing O365 now in now significant way means that you aren't choosing on prem, it just means you aren't choosing it right now. But choosing on prem means you are essentially basing your valuation calculations on having to stick to that decision for a minimum of five years to justify the decision - that's a lot of risk.
So both risk approaches tell you that O365 outweights on prem, even if today's calculations put them as relatively close.
Flexibility is one of the biggest business risk protection mechanisms yet is very often ignored.
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@scottalanmiller said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
Another way to look at risk here is that with the on prem solution, you are committing to 5+ years of your chosen solution. You aren't just deciding that on prem is the way to go today, but that it will stay the way to go for a long time. Five years is a really long time in IT terms for any solution to remain something that you are happy with.
With O365, your commitment is by the month or maybe one year at a time, but never close to five years. That's some serious risk prevention right there. Choosing O365 now in now significant way means that you aren't choosing on prem, it just means you aren't choosing it right now. But choosing on prem means you are essentially basing your valuation calculations on having to stick to that decision for a minimum of five years to justify the decision - that's a lot of risk.
So both risk approaches tell you that O365 outweights on prem, even if today's calculations put them as relatively close.
Flexibility is one of the biggest business risk protection mechanisms yet is very often ignored.
I agree with that and was mostly leaning that way based on that flexibility and not wanting to feel like we would need to stay with older software to make sure we "got our money's worth". Not that there's usually any real compelling features in Office to make us want to upgrade. With the Microsoft 365 that takes that aspect out of the equation because we're always up to date with the latest. Also, even though we don't currently have Teams or Sharepoint, and I don't think they actually add the value that some of the management folks think they will, it give them to opportunity to show that there will be value in those tools for pretty much the same price we can get on-prem Exchange and Office for without those additional tools that are part the 365 package.
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@Dragon3303 said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
Also, even though we don't currently have Teams or Sharepoint, and I don't think they actually add the value
That's a negative to me. I'd hate my team thinking that they could start using Teams or Sharepoint, I'd see their usage as sucking value out of our people. Such bad tools. SP used to be way better, I feel like it's fallen behind. Teams is actively really inefficient.
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I don't know if your company has kicked around not using Exchange at all, but keep in mind that there are other products out there - including ones that at least here we feel are quite superior and come in far cheaper.
We use Zoho here at it's just $1/u/m, so 25% of the cost of O365 email only. And if you compare to the $12.50 plan from O365, then the Zoho equivalent is $3. So about 25-28% cheaper in each case. We used to get O365 for free as part of an MS partner program and found Zoho to be better value even when we had to pay for it versus getting O365 for free. So when we say we think it's better, we really mean it. We find their email better, their messaging way better, their office suite we like better but is online only, there is no on prem version.
It's not the only option out there, just saying, Exchange is an incredible premium on price for, what many would say, is actually getting less than what is otherwise industry standard.
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I've looked at some the different options but part of the challenge is getting the management team onboard when they're all used to using Exchange and Outlook along with Microsoft Office. We also do have a fair amount of macros in use that I don't know what it would take to replicate those types of things in another suite. I'm open for that and have made suggestions to alternatives but there's a pretty good amount of resistance towards the unknown at this point. I don't know if there's a good way to run Zoho or something similar simultaneously with what we have to show how it would work?
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@Dragon3303 said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
I've looked at some the different options but part of the challenge is getting the management team onboard when they're all used to using Exchange and Outlook along with Microsoft Office.
Have you used math and talked to the CFO? Sometimes getting the CFO to understand the cost of being unwilling to change is all that it takes. As IT, it's our job to inform finance of the cost of things, then let finance do its job.
So in this case, for example, a few management people unable to adapt to something any middle school student should be able to adapt to in a few minutes without any assistance, would have a price tag of $8,550 per year. That's not an insurmountable number, and maybe other factors play in, but as a CFO I'd sure like to know that there is an annual line item that large that is tied to the belief that the management team is unable or unwilling to make trivial adjustments to the applications that they use. As an owner, if a senior manager came to me to tell me that he'd thrown away nearly $10K of my money because he didn't want to use a program that's so easy that he should have been able to simple start using it without any training .... I'd be pretty unhappy. Even if you earn a million a year, $8,550 isn't something you want to just throw away without good reason, especially every single year. And the mindset of "let's just throw money away" tends to happen in lots of places, not just one, so when you see this kind of thing happen, often its happening in ten different places and the amount being thrown away might be many times higher when everything is audited.
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@Dragon3303 said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
We also do have a fair amount of macros in use that I don't know what it would take to replicate those types of things in another suite.
Macros exist to make people trapped. Whoever started using them is a problem. It's not that they are 100% bad, but it's a big deal to being locking any company in to something expensive in that way (how much money are macros potentially costing!), are difficult and risky to support, and generally (but not always) are a flag that MS Office is being used for inappropriate purposes. If you have someone considering programming on top of Excel, they likely should be just programming in a professional way that empowers the company rather than crippling it. Again, not always, but it's something important to consider.
Also, put a number on what it would take to recreate a macro. $8,550 is enough money to hire a firm to do macro work for you and get things fixed.
Put on your owner hat and imagine owning a company and finding out where money is going and the logic behind where it is going and things look very different.
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@Dragon3303 said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
I don't know if there's a good way to run Zoho or something similar simultaneously with what we have to show how it would work?
Just set up and account and try it out. It's $3 for the first account (actually the FIRST one might be free) and play around. A TINY investment in learning a lot.
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One other limitation with the Zoho Suite in particular is that it doesn't appear to have the ability to be used offline for Sheets. The spreadsheet functionality is one that users are using offline when they're working with or supporting some of our customers. So that would be a big one where we'd need something. LibreOffice or something similar but we again run into areas where they're using macros to push data across to other applications from their spreadsheets so there would be that to work out.
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https://www.zoho.com/workplace/pricing.html
This is the plan that has the office suite included. However, we use the cheaper $1 plan and get at least five or ten users with the office suits included. So maybe the free mail only account will actually do what you need for testing. Try the free plan first, anyway, before you spend a penny.
Things that we really like....
- Clean, modern email (blows the doors of anything MS or Google make, by a huge degree.)
- Great mobile apps, not hugely better than others, but we like them a lot.
- Desktop options, but a truly amazing web based interface to everything.
- The price, you just can't beat it.
- The integration, it truly all feels like a single app.
- The ease of use and flexibility of the office suite, @romo and I prefer it over anything else.
Things we don't like...
- Account management is a train wreck, O365 is so much better (as far as like clarity and simplicity)
- That there is no offline installable office suite. We know why they chose this, but it's not great for us.
- Lack of a wiki-like functionality in the $3 product. They sell a wiki, but at great cost that doesn't make sense.
- Connect, the Yammer like piece, is paid only past 25 users. It's really nice, but.... should be included with the $3 package IMHO.
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@Dragon3303 said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
One other limitation with the Zoho Suite in particular is that it doesn't appear to have the ability to be used offline for Sheets.
It IS, kind of, but you have to select the sheet to be available in the cache.
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Keep in mind, while we love love love the Zoho Office Suite, we're currently choosing LibreOffice and NextCloud as our solution for that. Zoho Email / Cliq messaging at $1 (and the included 25 users on Connect) is amazing for us and we can't find any way to beat it, including running our own tools. But the office suite, we haven't been able to justify moving to, as much as we'd like to. It's on our roadmap to reconsider with growth, but for now, we aren't using it. But those of us that get access to it all prefer it.
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@Dragon3303 said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
LibreOffice or something similar but we again run into areas where they're using macros to push data across to other applications from their spreadsheets so there would be that to work out.
Have you tested OnlyOffice? That would be my best guess at a chance to directly support that.
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@scottalanmiller said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
@Dragon3303 said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
LibreOffice or something similar but we again run into areas where they're using macros to push data across to other applications from their spreadsheets so there would be that to work out.
Have you tested OnlyOffice? That would be my best guess at a chance to directly support that.
Have not tested that yet. I'll have to take a look at it. Thanks.
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@scottalanmiller said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
Macros....are a flag that MS Office is being used for inappropriate purposes.
Amen to that.
The job required a scalpel but all you had was a hammer so that is what you used. Excel is the hammer.
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@scottalanmiller said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
Teams is actively really inefficient
How so? We're using it more and more, including to collaborate with external people and everyone seems to like it now they've got the hang of it.
My kids also use it all the time at school.
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@Carnival-Boy said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
@scottalanmiller said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
Teams is actively really inefficient
How so? We're using it more and more, including to collaborate with external people and everyone seems to like it now they've got the hang of it.
My kids also use it all the time at school.
Very hard to see and follow alerts and conversations. A lot more clicking around and searching for messages than with other platforms. We find for people using it actively, that it causes a lot of missed communications and lost time as people spend their time looking for messages rather than reading and responding compared to Slack, Rocket, Mattermost, Cliq, etc.
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@Pete-S said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
@scottalanmiller said in 75 User Exchange On Prem vs. Office 365 Cost Comparison:
Macros....are a flag that MS Office is being used for inappropriate purposes.
Amen to that.
The job required a scalpel but all you had was a hammer so that is what you used. Excel is the hammer.
Exactly. Good to have a hammer, sometimes you need it. But when someone says "now, take your hammer and be very, very delicate" you might want to ask if maybe another tool would be better.
