What is Microsoft Office 365 and how much will it cost?
Updated May 2020 to reflect Microsoft branding changes.
Many queries end up here due to confusion surrounding this question. So, lets start with what Microsoft Office 365 isn’t …. it isn’t a single product. It is in fact an extensive collection of products; anything from a simple email box to a complete cloud-based ecosystem with software such as Word, Outlook, Excel included.
Some products can be purchased individually and some only as “bundles” of these same products depending on whether you are a home user, small business, enterprise or educational user. Confused? No idea on how to start pricing this up? I guess that is why you are here.
I typically find it useful to start with a couple of scenarios in the small business space
Scenario 1: Small Business of 5 people
Hall Fabrications (see what I have done there?) are a small engineering company which started 5 years ago. They currently use email provided free with their website, which is okay but being an older system doesn’t give them true email synchronisation between their mobile phones and desktop PCs. It is a constant source of frustration as sent items on the mobile don’t appear in Outlook and vide versa. Additionally, they can’t share calendars, set out of office messages from Outlook and all the email files are stored on their PC’s meaning that in the event of a crash they could lose email history.
The MD’s laptop was her old home laptop, and while she did upgrade to Windows 10 when the free update was available, it is running a very old version of Microsoft Office Word, excel, etc which was “acquired” at some point from a well-meaning friend. The other PC’s being newer have differing but legitimate versions of Microsoft Office but are relatively up to date.
Last and not least, their salesman is often out on the road and setting email frustrations aside, would like to be able to communicate via chat to the office. Video calling might be useful too, but not essential and certainly not worth paying extra for.
All 5 require an email mailbox and Instant Messaging capability. 4 out of 5 of these have legitimate versions of Microsoft Office 2016 and 2019 (Word, Excel, Outlook, etc). All PC’s are Windows 10
This fits perfectly with 2 “bundles” that Microsoft offer specifically for small businesses.
- Microsoft 365 Business Basic (formerly Office 365 Business Essentials). This includes email, some online storage, a product called SharePoint (which warrants an article by itself) and Microsoft Teams for chat and video confrencing. This is priced at £3.80 per user per month and will suit 4 users perfectly
- For the MD, she needs an up to date (and legit) version of Word, Excel, Outlook, etc. For her Microsoft 365 Business Standard (formerly Microsoft Office 365 Business Premium) is the solution. In essence, the same as Business Basic but with the addition of up to date versions of Microsoft Office to replace her ageing, creaking and legally dubious copy. This is priced at £9.40 per user per month
Scenario 1 cost
Thankfully, Microsoft allow you to mix and match these bundles, so the total subscription cost to the business of this package would be £37.60 per month plus VAT.
Scenario 2: Dynamic start-up company with a distributed workforce
Kelly Communications are a PR agency that started just 18 months ago. Already they have 22 staff and associates spread all over the UK and a couple of those in Ireland. As each person has come into the business, they have enthusiastically introduced their favourite “pet” software, so consequently they operate Gmail for email, Dropbox Basic for sharing files, Slack for Instant Messaging and Google hangouts for meetings. It all works of a fashion .. but they are now feeling the consequences of using personal accounts, lack of security of files, low storage space and there is a general feeling that nothing is “joined up” … which of course it isn’t!
Although the staff have newish laptops and versions of Microsoft Office, the associates use their own laptops. All but one (who is a Google Docs fan) have Microsoft Office, but a couple use the Office 365 Home Subscription which as well as not having all the requisite features … is for home use (naughty!).
In this scenario, the brief is to bring all these functions onto a platform that will “do it all”. Google’s GSuite is a strong contender here and has a couple of enthusiastic advocates within the company, but most (as life-long users or Outlook, Word, Excel, etc) are leaning towards the Microsoft offering as “what they know”.
All 22 require a mailbox. Additionally, instant messaging, video conferencing, collaborative working and online storage are a must. SharePoint provides enhancements to the online storage with more advanced security for files and folders. The Directors are also interested in creating workflows and forms for customers and their team to automate certain functions and create feedback possibilities. 3 laptops belonging to the associates also require Microsoft Office applications which will integrate with all this.
Again, this can all be accommodated with the 2 bundles we mentioned before in Scenario 1
- Microsoft 365 Business Basic (formerly Office 365 Business Essentials). This includes email, some online storage, a product called SharePoint (which warrants an article by itself) and Microsoft Teams for chat and video confrencing. This is priced at £3.80 per user per month and will suit 19 out of the 22 users
- For the 3 associates with no or unsuitable versions of Microsoft Office, Microsoft 365 Business Standard (formerly Microsoft Office 365 Business Premium) is the solution. In essence, the same as Microsoft 365 Business Basic but with the addition of up to date versions of Microsoft applications. This is priced at £9.40 per user per month
Scenario 2 cost
As before, Microsoft allow you to mix and match these bundles, so the total subscription cost to the business of this package would be £100.40 per month plus VAT.
For most small business up to 300 people, Microsoft 365 Business Basic and Microsoft 365 Business Standard will provide for and often exceed your requirements and in the case of Business Basic (assuming your Office applications aren’t too old .. at Jan 2020 you need Office 2013 installed ideally), will allow you to protect previous software investment.
It is true that one or two features in Office 365 are contingent on having the “latest and greatest” version of Microsoft Office applications installed, but for most key functionality is retained, although as time progresses this may be less true. However, we have found that natural replacement as time goes on mostly compensates for this. If someone gets a new PC their subscription can be upgraded as required.
All prices quotes are correct in the UK as May 2020
A note on Office 365 licensing
Microsoft office 365 Business Premium allows you to install the Office applications on up to 5 devices per user. Per user here is the key. You can install on your laptop, your PC, your tablet or mobile, but only if used by you. We have seen examples where a single Office 365 license has been used on 5 PC’s for different users and this is not advisable, not legitimate, and will cause issues with more advanced collaboration features should you use them. A license for each user should be purchased with the required features.
Finally … what about other Microsoft applications?
If you have Microsoft Project or Microsoft Visio installed on your PC, you may have to consider an additional subscription for these products. Without getting too techie, certain versions of Microsoft products will not coexist with others on the same PC (see MS article here). Depending on what version of Project or Visio you have already, you may find a block on updating to the latest version of Office 365 desktop applications unless you remove the old. Not something you want to be blindsided by.
Both Visio and Project are available as subscription products with differing options which are probably outside the scope of this article, but you should be aware if you use these product that it maybe a factor
Lindsey Hall. Director
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