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Industry issue:

Is Office 365 a no brainer for an SME or mid-market business?

30 July 2019

Microsoft Office is the most widely used bundled set of productivity applications. Announced by Bill Gates in 1988, the ubiquitous set of desktop programs (Word, Excel, PowerPoint, Outlook etc.) has developed through numerous iterations culminating in the current version, Office 2019.

Initially Office was offered as a perpetual license for a single version through payment of a one-time fee, however, with the introduction of Software Assurance, Office was made available as part of a monthly subscription that offered version upgrades at no additional cost.

Subsequently, Microsoft launched web and smartphone Office applications and unveiled Office 365 in 2011. These new Office 365 subscription based packages combined Office desktop, web and smartphone software with cloud based business applications (Exchange, OneDrive, SharePoint etc.), however Microsoft continued to offer perpetually licensed applications for hosting on premise.

Office 365 has proven extremely popular with SME and mid-market organisations. According to Gartner, Office 365 is the most widely used cloud service consumed by 1 in 5 corporate employees.

Why implement Office 365 over an on premise solution?

An on premise solution allows you to exercise greater control over your data centre, servers, applications, upgrade cycle, and the management of data. However, this requires in-house or 3rd party technical resources to manage. Each Microsoft product must be individually licensed, including server operating systems, server and client applications, and client access licenses.

The Office 365 subscription includes provision and management of the data centres, servers and business applications, by qualified and experienced Microsoft staff. Software is automatically updated to the current version and patches applied. Microsoft is responsible for security, compliance, and data integrity and business continuity. Software licensing for Microsoft client and server applications is covered by a single per user subscription with flexible price breaks available according to the number of active users.  

Office 365 still requires elements of in-house or 3rd party management, however, the scope of management activities required is less than for an on premise solution.

Depending on the Office business applications used, the policy on frequency of software renewal, and selecting the appropriate service plan, Office 365 is likely to be cheaper and more flexible  than an equivalent on premise solution. In addition all users will utilise a common version of applications, avoiding incompatibilities that frequently result from purchasing tranches of perpetual licenses.

Factors including the quality of data centre provision and management, the seamless implementation of common up-to-date application versions across all users, and flexible licensing costs support our view that Office 365 is the preferred alternative to an on premise solution.

How easy is it to implement and support Office 365?

Basic high level maintenance activities such as configuration or managing users are relatively simple to execute via a central web portal or phone app. However the process of migrating from an existing on premise implementation to cloud-based solution requires careful design and planning, and in depth knowledge.

Office 365 may be licensed, and implementation and ongoing support provided, either directly by Microsoft or via numerous 3rd parties. We would recommend that any organisation implementing Office 365 employs suitably qualified in-house technical resource, or a 3rd party, to provide implementation services and ongoing support.

So, is Office 365 really a no brainer for an SME or mid-market business?

Office 365 offers an SME or mid-market business numerous advantages over an on premise Microsoft solution or use of Google G Suite (Google’s take on desktop productivity software):

Functionality

  • Office 365 offers a highly functional desktop Office software suite that is familiar to the majority of business PC users
  • Office 365 offers cloud-based versions of familiar business applications that deliver the functionality required of a modern productivity software suite
  • Software upgrades and security patches are included in the subscription fee and are implemented automatically
  • Users share a common version of desktop, phone, tablet and cloud-based applications

Availability and resilience

  • Office 365 data is stored centrally in Microsoft data centres and is accessible from many types of device in any location with Internet connectivity
  • The Microsoft data centres that host its cloud-based business applications and data are secure and resilient
  • Microsoft is responsible for data integrity and recoverability
  • The Office 365 Service Level Agreement (SLA) incorporates financial penalties if service availability targets are not met

Management

  • Microsoft employs a large team of experienced and qualified technicians who are responsible for managing the data centre and business application environment
  • Office 365 users and business applications are managed via a single, user friendly web portal

Security, privacy and compliance

  • Microsoft’s policies on security, privacy and compliance are extensive and current to meet  the demanding requirements of government and corporate users worldwide
  • Microsoft publishes extensive documentation detailing its policies on security, compliance and privacy. These can be found here.

There are however possible disadvantages to using Office 365:

  • The cloud-based business applications require the availability of Internet connectivity
  • Microsoft controls the timing of application version updates, which can lead to changes in the user interface or functionality with little or no notice
  • As with an on premise solution, 3rd party add-on applications may be necessary to perform certain tasks, such as provide an independent email management facility or provide a backup of corporate data outside of the Office 365 environment

Our Recommendation

In our opinion the advantages of Office 365 outweigh those of an on premise solution or Google G Suite, and there is a convincing argument for an SME or mid-market business to select Office 365 as their productivity application suite of choice. If you would like to discuss your Office 365 implementation or support requirements, feel free to contact BDO. We offer practical independent advice (we only charge for our time and do not mark-up supplier prices), and hands-on IT support services, including for Office 365.