NOTE: This article is the second in a two-part series and addresses the options larger organizations (300+ named accounts) have when it comes to Microsoft 365 licensing options. Smaller organizations moving to Microsoft 365 cloud will benefit from reading part one.
So. You’re the leader in a large organization, one where there are more than 300 employees who need access to office productivity software. You have until now been running a plethora of on-prem servers hosting Exchange, SharePoint and the like. You have also security appliances that are filtering your email, scanning attachments and perhaps other services. The decision has been made to move to the cloud and you have selected Microsoft 365 to provide this service. So far so good, but what licenses do you need to obtain for all of your users? How do you make sure you are getting the most value out of what you purchase?
Switching from CapEx to OpEx
Up to this point, you have been making CapEx purchases every few years on new hardware and new versions of various Microsoft software products. The decision to move to the cloud means switching away from this regular replacement cycle in favor of a monthly subscription (OpEx purchases) for each user you have, but not necessarily the same subscription for each of those users. What then, are your options?
Break down the users
First off, understand that you are going to have multiple different categories of users, with different needs in terms of software and services. The list below is not designed to be exhaustive, but it is a good example of some common scenarios/use cases:
- Infrequent users – Occasional users who still need an address in your domain (and possibly also a mailbox)
- Users who need no permanent device, or who will fairly frequently access services through a corporate or non-corporate asset and do not necessarily need on-device copies of the Office productivity suite
- Users who have a corporate PC or Mac and do require on-device copies of the Office productivity suite
- Users, as above in a more sensitive position to whom auditing, eDiscovery operations, compliance, and other security and management processes might apply
Choosing the right Microsoft 365 license for your large enterprise
Let’s start with the smallest license that Microsoft offers. This would be an F1 license at $4 per user per month might. The “F” stands for Frontline users, which from Microft’s definition, is well in line with the Infrequent user group we outlined above. That user gets a 2GB mailbox and the same size OneDrive account. The user also gets access to the corporate SharePoint and Microsoft Teams services. In addition, the user can use a mobile device to access email using either ActiveSync or the Outlook App. That’s a small and neat package for anyone working in a warehouse, school or any similar environment.
One step up is the E1 (“E” standing for Enterprise in this instance) at $8 where the mailbox quota goes up to 50GB and the OneDrive space increases to 1TB, which is quite the leap. In addition to the increased quotas, E1 users have the ability to create Exchange inbox rules as well as being able to move older but still relevant email to a separate archive folder, thus stretching the mailbox storage capability. However, as with the F1 license, no advanced capabilities such as retention policies or litigation hold can be applied to these accounts. So, the ideal user for this E1 license does not need Office software locally installed but does need the larger mailbox. Moving to this license will also be necessary if you need to implement the policies and hold features.
Once you’ve identified all the users for whom F1 and E1 licenses make sense, you’re left with the final two options; E3 and E5, priced at $20 and $35 respectively. The email quota rises to 100GB with what Microsoft define as ‘unlimited’ but which in practice mean 100GB increments.
OneDrive quota steps up to 5TB and 25TB (E3 and E5 respectively) but come with warnings from Microsoft on storing that much data. E3 and E5 licenses also light up the full capabilities in Microsoft such as Data Loss Prevention and Application Insights to get analytics about utilization within your SharePoint environment.
This is where things diverge though. With an E3 license if you wish to employ the protection features such as anti-phishing, spoofing, intrusion detection, safe attachments, and safe links, you must procure an E5 license. This is where your decision whether or not to move away from an appliance or cloud-based message hygiene service.
However, don’t just take the $15 difference between the E3 and the E5 and decide that the ~$5 monthly cost for your 3rd party email hygiene service is cheaper than an E5 license. What your hygiene service is most likely not offering you, without a price uplift, are features around governance. Governance for email can be obtained with that more expensive tier from the hygiene service but most certainly not for SharePoint, Teams and OneDrive data. That’s where the difference in price between an E3 and an E5 matters.
Finally, lets look at one last category of options for your users: available add-ons.
Users who need audio conferencing features can have it at any level, but it will add a $2 charge, except in E5 where it is included. This feature, used with Teams, very easily allows you to replace your current call conferencing and collaboration service.
Where you have decided to allow users to access data on mobile devices or have decided that access to data shall be granted based on location or device security then the Enterprise Mobility & Security license will be required. There is no standard license subscription at the Enterprise level where these features are involved so an EMS3 or EMS5 license, priced at $9 and $15 respectively will now almost always be required in the modern business world. (There are of course additional features between EMS3 and EMS5, but they are around ever more advanced elements of threat protection and detection, which we will follow up on in future postings). In most cases, the EMS3 will be the go-to subscription with only a select few key players needing to be assigned the EMS5.
As with licensing at the more commercial level, Enterprise licensing is no less complicated, and the focus of this article has kept to a certain branch of the licensing matrix. This article should help you begin to determine the most cost-effective way of starting your Microsoft Office 365 implementation and whilst you may need to change some users up or down, you can at least do so with the minimal impact in monthly subscription costs.
Anexinet has extensive experience in the ever-changing Microsoft licensing landscape in terms of new features added and existing features improved. Understanding exactly what you need is only the first part of the problem; keeping track of what licenses provide those features is just as important. Anexinet can help your business understand the options available, introduce you to lower-level subscriptions (which, depending on your business, might be all you need) and can help you make choices beyond the ones described here regarding additional services that are and become available. If you have any questions at all around these use cases, feel free to reach out and see how we can help.
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