• Microsoft 365 editions include various combinations of Office productivity applications and Microsoft 365 cloud services. Multiple subscription levels exist for the Microsoft 365 Business and Microsoft 365 Enterprise products.
• There are special editions of Microsoft 365 for frontline, government, and educational users. In addition, there are add-on subscriptions available that can enable administrators to create their own service combinations.
• The key selling points for Microsoft 365 are divided into four major areas: productivity, collaboration, security, and compliance.
• To install and run the Microsoft 365 components and access the Microsoft 365 cloud services, each user in an organization must have a Microsoft 365 user subscription license (USL).
• Evaluating the total cost of ownership (TCO) for a Microsoft 365 implementation is relatively simple; there is a monthly or annual fee for each Microsoft 365 user subscription, and those subscriber fees are predictable and ongoing. Predicting the cost of an on-premises network requires businesses to categorize their expenses by distinguishing between capital expenditures (CapEx) and operational expenditures (OpEx).
• Organizations can purchase Microsoft 365 subscriptions directly from Microsoft individually or by using a variety of volume licensing agreements, including Enterprise Agreements (EA), Microsoft Products and Services Agreements (MPSA), or arrangements with Cloud Solution Providers (CSP).
• Typically, contracts with cloud service providers include a service level agreement (SLA), which guarantees a certain percentage of uptime for the services and specifies the consequences if that guarantee is not met.
• Microsoft carefully defines the division of responsibilities between the Microsoft support team and the administrators at Microsoft 365 subscription sites.
• The Service Health page in the Microsoft 365 admin center displays a list of Microsoft 365 services with a status indicator for each.

Thought experiment

In this thought experiment, demonstrate your skills and knowledge of the topics covered in this chapter. You can find the answer to this thought experiment in the next section.

Ralph is responsible for planning the IT software deployment for his company’s new branch office, which will have 50 users. He is currently trying to determine the more economically viable licensing choice: a cloud-based solution or on-premises servers. For the cloud-based solution, Ralph is considering Microsoft 365 Business, which costs $20 per user, per month. For an on-premises alternative providing the services his users need most, Ralph has searched through several online sources and found the software licensing prices shown in Table 4-8.

TABLE 4-8 Sample software licensing prices

It is obvious to Ralph that the on-premises solution will require a much larger capital expenditure, but he is wondering whether it might be the more economical solution in the long term. Based on these prices and disregarding all other expenses (including hardware, facilities, and personnel), how long would it be before the ongoing Microsoft 365 Business subscription fees for 50 users become more expensive than the on-premises software licensing costs?

Thought experiment answer

Ralph has calculated the total software licensing costs for his proposed on-premises solution and has arrived at a total expenditure of $29,171.47, as shown in Table 4-9.

TABLE 4-9 Sample software licensing prices (with totals)

The Microsoft 365 Business subscription fees for 50 users amount to $1,000 per month. Therefore, Ralph has concluded that after 30 months, the subscription’s ongoing cost will exceed the one-time cost for the on-premises server licensing fees. However, Ralph has been instructed not to consider an on-premises datacenter’s hardware, utility, and administration costs. These expenses would vastly increase both the initial outlay and the ongoing costs of an on-premises solution.