A small business owner recently asked me what she could do to lower their spend on Office 365. At $150 per user per year for the Business Premium package (the Business series is for companies with up to 300 users), it adds up.
So, what can you do?
Well, with all user-based software, you should do three things:
- Make sure you only license the users you need to
- See if you can use a smaller license package
- Consider other options
Only license the real active users
Let’s start with only licensing the users you need to. Here we’ve got a few tips:
- Shared mailboxes: In Office 365, we often see customers who use full-blown licenses for shared mailboxes. That is, firstname.lastname@example.org receives a full license. You don’t need to. You can create shared mailboxes at no extra cost and add the users or groups to them that need to access the content. This is a good scenario for most, and we use it extensively.
- Remove licenses from inactive users. Did you give an external consultant a user and license, and they are no longer doing work for you? Did an employee stop? In most companies these “ghost” accounts draw 5-15% of licenses.
Use smaller packages
In Office 365 – both for small and large companies – there are many packages available. They differ vastly in price, and you should consider what features each employee really needs. The big differences are centered on the need for:
- Installed Office applications: For many users, a web edition is enough. This is especially true for those who rarely create documents, but merely read them, or enter data. The [KS1] difference between a Microsoft 365 Business Standard (formerly Office 365 Business Premium) and Microsoft 365 Business Basic (formerly Office 365 Business Essentials) account is primarily the lack of installed office (there are others like mailbox size, but we rarely see these becoming real-world limitations in our data). The savings? $90 per user per year. That adds up.
- Collaboration tools: Do you actually use Sharepoint, Teams, or your mailbox? Your company might use Google e-mail and collaboration tools – or Zoom, or Slack, or… it’s a long list. If all you need are the office products, you can use Microsoft 365 Apps (formerly Office 365 Business) and save $50 per user per year.
Consider other options
- Switch to owning office software. You can still buy office, and it’s not as expensive as you might think. A Office Home & Business 2019 license is $250 without discounts. If all you use are the apps, that’s an ROI of 18 months. Limitation is you’re only allowed to install it on one device, vs 5 for the Office 365 version.
- Switch to something else. Libreoffice? Google Docs etc.? There are other options out there. This, however, is not necessarily a simple thing to do. In the long run though, open source might be worth thinking about. We are willing to wager the cost of Office 365 is unlikely to be going down in the future…
We hope this is helpful. If you have any questions, we publish a weekly “Ask an expert” session, and if you want your question included here e-mail it to email@example.com . You can also reach out to sales, if you are more comfortable with us analyzing your data and making recommendations.