Top Budgeting Mistakes When Comparing Office 365 to SharePoint and Exchange On-Premises

  1. Under-Estimating the Cost of SharePoint 2016 On-Premises

This is the most common mistake I see.  First, many information technology managers forget that SharePoint 2016 does not have a foundation license and therefore will need to purchase Standard or Enterprise client access licenses.  Second, information technology managers should budget for four or five servers to install SharePoint 2016 just to meet the minimum hardware requirements.  A single server is unlikely to meet the production needs for most organizations, this cost gets compounded when you look at the long term cost of server refreshes, warranty extensions, and future upgrades.  Third, information technology managers underestimate the administrative work required to keep a SharePoint farm healthy.

 

  1. Forgetting About Identity Management in the Cloud

Many organizations are already looking for ways to extend their Active Directory and identity management solutions to cloud applications, as well as share limited internal resources with external customers, vendors, and partners.  Office 365 has these capabilities “baked in” with secure external sharing, Azure Active Directory, and other cloud identity management tools.  Replicating these kinds of tools on-premises not only increases your hardware and expertise requirements, but can open you to additional security threats if not enabled and managed correctly.

Microsoft has made it easier to extend your Active Directory with tools like Azure Active Directory Connect which allows you to enable same sign-in and single sign-on technologies easily.  There are also technologies like EMS and Azure Active Directory Domain Services which create additional benefits that can actually make the cloud more secure than applications that once ran in your data center.

 

  1. Believing that Hybrid is Less Expensive than Cloud Only

We consulted with several customers this quarter who believed that running hybrid would save them money.  They were trying to avoid paying for licenses in the Microsoft cloud for some users.  In most cases, since you can’t match the scale of Microsoft, your organization can’t match the value they provide.  There are great reasons to run Hybrid such as unique security and compliance requirements or custom applications that you don’t want to re-write to run in the cloud.  Cost should not be the factor driving your organization towards hybrid Exchange or SharePoint.

 

  1. Not Including the Cost of Software You Can Stop Using

Hopefully you are running spam filtering and virus scanning software for your on-premises collaboration server environment.  Microsoft takes care of these for you in Office 365.  Email archiving software is not typically needed due to the large mailboxes sizes in Exchange Online.  Microsoft provides backup software and high availability as well.  Your team should also calculate whether or not you can reduce spending on conferencing services or products like WebEx or GoToMeeting and replace them with Skype for Business (included in many Office 365 plans).

With real-time reporting of the features and components that your organization is actually leveraging, you can make better decisions about what technologies to invest in, rather than rubber stamping additional hardware investments year after year.

Software you pay and don't use Office 365

 

  1. Cost of Managing External User Access

SharePoint Online provides access for unlimited external users.  Since external users utilize their company Office 365 or personal Microsoft credentials, your staff won’t be in the password reset business.  SharePoint on-premises provides external access via VPN or forms-based authentication (you need a license for users that are part your active directory).

 

  1. Budgeting for Migration Tools

If you are going to skip a version of SharePoint or a migration to Office 365 in most cases, you will need a migration tool.  A migration tool will also make moving to exchange online much easier.  Cutting over all users to Exchange Online at the same time will also reduce the complexity of the migration.

We hope this article will help you avoid some of the most common budgeting mistakes around Microsoft collaboration software. Please contac us if are considering moving to Office 365.

Author:  Kurt Greening

Editors:  Stephen Heister and Alex Finkel