Choosing the Right Office 365 Plan

choiceOne of the core promises of cloud services is that they allow a business to simply pay a monthly subscription fee for what they need, rather than make large annual purchases for software licensing. Although that promise is partially fulfilled by Office 365, it can still be a challenge to work out exactly which of the broad range of Office 365 service offerings you should be subscribing to.

Looking at the core Office 365 subscription options, there’s several that businesses can choose from. Let’s assume for now that your business wants at least Exchange Online, so that you can run your email in the cloud, but you’re interested in using additional services in the near future. You could subscribe to:

  • Exchange Online Plan 1
  • Exchange Online Plan 2
  • Office 365 Business Essentials
  • Office 365 Business Premium
  • Office 365 Enterprise E1
  • Office 365 Enterprise E3
  • Office 365 Enterprise E5

That’s a lot of options for a simple requirement. So let’s take it a step further, and say that you also want to include the Office 365 applications (Outlook, Word, Excel, etc) in your subscription. That narrows the options to:

  • Office 365 Business Premium
  • Office 365 Enterprise E3
  • Office 365 Enterprise E5

It’s at this stage that some customers make what I would consider to be the wrong choice. If the customer thinks “we’re not an enterprise”, then they’ll steer towards the Office 365 Business Premium. Unfortunately, in doing so they will miss out on features that their business could benefit from. As a simple example, a 30-seat law firm might not consider themselves to be an “enterprise”, but they would benefit from features of the Enterprise E3/E5 plans such as Rights Management, Data Loss Prevention, Litigation Hold, and Advanced Threat Protection.

That one example serves to highlight the main point here – choose your Office 365 plan based on features.

Now, some customers will struggle to accept the higher priced plans which might include a bunch of features that they don’t need. Often this is based on the assumption that cloud services should be cheaper. That’s true, cloud services are often cheaper. The basic Exchange Online Plan 1 license is inexpensive. But it only really includes a mailbox, with no Office client software, and no advanced features. If your Office 365 project is all about shifting a single service like email to the cloud, and running it as cheaply as possible, then that’s fine – Exchange Online Plan 1 might be all you need. But if your IT strategy is moving more services and productivity tools to the cloud, then the higher tier plans are what you need to be looking at.

You can manage costs by being sensible about the number of licenses you purchase. Savings can quickly be found in areas such as shared mailboxes (which do not require a license), and converting departed users to inactive mailboxes (which also do not require a license). You can also reduce your on-premises infrastructure costs by making simple changes such as shifting user home drives (My Documents, personal data, etc) to OneDrive for Business. Ultimately, a cost-efficient cloud strategy will make the best use of available services and features to avoid unnecessary expense.

If in doubt, my recommendation is to set up a trial tenant that is separate from your production tenant. Explore the features of the higher tier plans (you can see a detailed comparison in the service descriptions) and see the value that they can provide to you. However, if you can’t make a decision in the time you have available to you, don’t worry too much. You can change your licenses at a later date if you need to upgrade or downgrade them.