Office 365 is one of the most used (if not the most used) SaaS applications in the world. The company reports more than120 million active monthly users, a number that just keeps growing. The benefits of the service – including increased productivity and communication across teams – are self-evident, but the dangers aren’t.

office365-logoTrue, just buying a top-tier Office 365 subscription license for every employee in your organization removes a lot of early decision-making headaches. Just making sure every employee has access to every Microsoft product he or she may end up needing to use makes sense, right? After all, you want to make sure your people have the resources they need to do their jobs well.

Except … Microsoft has also reported in the past that Office 365 subscribers pay an average of 80 percent more over the product’s lifetime, compared to users who buy a perpetual license.

“The suspicion that a subscription – actually, the never-ending payments they require – costs more than an outright purchase, is never far from the surface for customers,” Gregg Keizer points out in this late 2017 ComputerWorld article. “But is it just that, suspicion? Or is there truth to the thought?”

Gartner analyst Michael Silver says it’s both.

“We believe that for smaller organizations, they’re probably saving money with Office 365,” said Silver in an August 2017 report on the TCO of Office 365 Enterprise E3, the most popular of Microsoft’s subscription plans. “Generally, large organizations are not.”

“According to the report, a mid-sized company of approximately 500 users would save 23% by moving to Office 365. But as the size of the organization increases, savings either dwindle or vanish completely, replaced by greater costs,” Keizer says. “Gartner’s modeling asserted that a 2,500-user company would see a 10% savings, while a very large firm of 10,000 would pay an additional 9% for Office 365 than they had been spending on perpetual licenses and on-premises servers and storage.”

Why does Office 365 change from a money-saver to a money-waster, the bigger an organization gets? Generally, it comes down to decreasing visibility, which is a challenge for companies when they purchase any SaaS subscription, but especially one as large and complex as Office 365.

Companies have the option of choosing from four subscription tiers:

  • Office 365 Enterprise E1: “Business services—email, file storage and sharing, Office Online, meetings and IM, and more. Office applications not included,” for $8 a month per user.
  • Office 365 ProPlus: “Office applications plus cloud file-storage and sharing. Business email not included,” for $12 a month per user.
  • Office 365 Enterprise E3: “All the features of Office 365 ProPlus and Office 365 Enterprise E1 plus security and compliance tools, such as legal hold, data loss prevention, and more,” for $20 a month per user.
  • Office 365 Enterprise E5: “All the features of Office 365 Enterprise E3 plus advanced security, analytics, and voice capabilities,” for $35 a month per user.

So which of these products and services are your employees actually using? Microsoft doesn’t provide usage reporting, and not knowing how the applications are being used can be dangerous to your bottom line.

Ultimately, many enterprise corporations end up buying licenses that are unnecessary for most of their employees, including services they just don’t use. The problem compounds when you consider other common challenges of Office 365 usage:

  • Because Office 365 is so easy to purchase and doesn’t seem terribly expensive on a monthly, per-user basis, many departments end up self-selecting subscriptions. If IT doesn’t have visibility into these purchases, the practice can lead to duplicate subscriptions purchased by corporate IT departments and individual departments or business units.
  • You may end up buying duplicate licenses for the same person without realizing it – one device-based license and another that offers the same functionality through Office 365.
  • Corporate mergers and acquisitions can lead to large-scale license duplication that is not dealt with in a timely manner, especially if contracts and subscriptions are set to auto-renew.
  • Mass-purchasing subscriptions based on organization size, a common practice, is often a waste of money considering how many employees (like those working in plants, warehouses, or other support functions) will never make use of a 365 license.

How can you get a true understanding of Microsoft Office usage across your organization? A software license management service like Applogie provides a single-pane-of-glass view into how licenses are being used across departments, devices, and office locations – no matter who purchased them originally or where they’re located.

This visibility will give you the insight to make cost-efficient subscription decisions based on real need, not hypothetical usage cases. Whether you’re able to scale down to a less expensive tier for the majority of your employees, reassign unused accounts, or drop some licenses altogether, knowing how you’re using Office 365 is half the battle to making sure it’s working for your organization, not against you.

Take the first step today – request a personalized SaaS subscription audit from Applogie.

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