Webinar: Microsoft Office 365 Mark Bartrick, Senior Analyst May 17, 2012. Call in at 10:55 a.m. Eastern time

Hey! You! Get on to my cloud!

Agenda Sympathy for the devil Start me up You got the silver Microsoft succumbs to market forces Start me up What is Office 365? You got the silver What does it cost? I can’t get no satisfaction Is it right for your organization? Under my thumb Contracts, paperwork, and the new Enterprise Agreement Tumbling dice Office 365 versus Google Apps for Business

Agenda Sympathy for the devil Start me up You got the silver Microsoft succumbs to market forces Start me up What is Office 365? You got the silver What does it cost? I can’t get no satisfaction Is it right for your organization? Under my thumb Contracts, paperwork, and the new Enterprise Agreement Tumbling dice Office 365 versus Google Apps for Business

Market forces and user demand RISE OF THE CLOUD Consumerization of IT Infrastructure cost and complexity Consumption billing; pay as you use Dynamic workforce

Office 365: launched June 2011, prices cut by 20% in March 2012! What does that tell you?! Microsoft says ‘growing economies of skill’ means they can pass savings to clients. We think: Office 365 sales are slower than Microsoft had hoped. Competitive products are gaining ground. Google Enterprise Edition Open Office IBM Lotus Symphony

Agenda Sympathy for the devil Start me up You got the silver Microsoft succumbs to market forces Start me up What is Office 365? You got the silver What does it cost? I can’t get no satisfaction Is it right for your organization? Under my thumb Contracts, paperwork, and the new Enterprise Agreement Tumbling dice Office 365 versus Google Apps for Business

Microsoft Office 365 is . . . Source: Microsoft

Office 365 is subscription-only Subscription service (you are not buying a perpetual license) “User” license (not device) For instance, access on any device you want Cell phone, desktop, laptop, friends house, etc.

Microsoft Office 365 for enterprise User types Kiosk worker Enterprise information worker Lower cost offering to users that do not have messaging and collaboration capabilities today Rich feature offering that meets a users full messaging and collaboration needs User segment offers: Plan K Family 500 MB mailbox Full Outlook Web Access only POP support Messaging, calendar, contacts Antivirus/antispam SharePoint Access (0MB storage) Site search capabilities Office Web Apps User segment offers: Plan E Family 25GB mailbox 250MB SharePoint storage Client connectivity Mobility Lync capabilities Exchange & SharePoint Enterprise Office Professional Plus On-premises access rights Key differences Source: Microsoft

Kiosk workers — Plan K Family Office 365 K1: Addresses most kiosk worker scenarios, where customers want to provide light email and access to company portal. Provides view only capabilities of the Office Web Apps. Office 365 K2 Addresses small population of kiosk workers that require information access and simple data input and editing. Office 365 K1 Includes: Exchange Kiosk SharePoint Kiosk Office Web Apps Not offered standalone SharePoint Online Kiosk Exchange Online Kiosk Office 365 K2

Enterprise users - Plan E Family Suites Components Office 365 E1 Includes: Exchange Plan 1 SharePoint Plan 1 Lync Plan 2 Office Web Apps Conferencing IM and presence Collaboration portal Email, calendar, AV/AS Office Professional Plus Voicemail and archive Forms, Access/ Excel/Visio Services Office 365 E3 Exchange Plan 2 SharePoint Plan 2 Office ProPlus Office 365 E4 Lync Plus Voice Office 365 E2

Agenda Sympathy for the devil Start me up You got the silver Microsoft succumbs to market forces Start me up What is Office 365? You got the silver What does it cost? I can’t get no satisfaction Is it right for your organization? Under my thumb Contracts, paperwork, and the new Enterprise Agreement Tumbling dice Office 365 versus Google Apps for Business

Office 365 is priced by role Plan E4 $22 Plan E1 $8 Plan E2 $14 Enterprise information worker Plan E3 $20 Plan K1 $4 Plan K2 Office Web Apps SharePoint online kiosk Exchange online Kiosk worker Office Web Apps Email, calendar Collaboration portal Conferencing IM and presence Forms, Access, Excel, & Visio Services Voicemail and archive Voice

Microsoft’s price tiers reduce its need to offer discretionary discounts Enterprise Agreement (EA) pricing applies the same volume discount Levels A to D: Level A: 250 to 2,399 Level B: 2,400 to 5,999 Level C: 6,000 to 14,999 Level D: 15,000+ Microsoft Online Subscription Agreement (MOSA) prices its volume licensing programs via tiers 1 to 5: Level 1: 0 to 249 Level 2: 250 to 2,399 Level 3: 2,400 to 5,999 Level 4: 6,000 to 14,999 Level 5: 15,000+

Don’t just think about licensing costs Total cost of ownership Power and air Backup Included Server hardware Newest version Operations staff

Agenda Sympathy for the devil Start me up You got the silver Microsoft succumbs to market forces Start me up What is Office 365? You got the silver What does it cost? I can’t get no satisfaction Is it right for your organization? Under my thumb Contracts, paperwork, and the new Enterprise Agreement Tumbling dice Office 365 versus Google Apps for Business

Is it right for your organization? Evaluate the pros/cons of cloud versus on-premises. Cost comparison Licensing Other costs/savings: Cloud reduces management/support/infrastructure costs. Ask your MS account manager for access to their TCO tool. But you should also factor in your own transition costs and effort Due diligence Security Availability Performance Do a competitive comparison. Try before you buy.

Will you have issues with migration and transition? Assessing your readiness to transition: Download Microsoft tools. Office 365 Deployment Readiness Tool Assessment and Planning Toolkit Test for products compatibility. Minimum requirements: IE 7, Windows XP SP3, Vista SP2, Windows 7 Can’t migrate Office 2003 or IE6: You will need to upgrade on-premises first, then transition to cloud.

Transition to the cloud On-premises In the cloud E4 E3 E2 K2 K1 Office Pro Plus Windows OS CAL Suite E1 Lync Exchange SharePoint Forefront Endpoint Protection System Cnt Config Mgr ML Transition Windows CAL

Transition to the cloud On-premises In the cloud E3 Office Pro Plus Windows OS CORE CAL BRIDGE Lync CAL Exchange CAL SharePoint CAL Forefront Endpoint Protection Windows CAL System Cnt Config Mgr ML

500 Pro Desktop SA (1000 Windows) 500 users move to e3 midyear 2 1000 Professional Desktop SA At signing 1st anniversary 2nd anniversary Renewal 3 1 500 E3 Transition grant 2 4 500 E3/CORE CAL Bridge 500 Pro Desktop SA (1000 Windows) 1 — Customer has renewed a 1,000-device Professional Desktop Enterprise Agreement 2 — Year 1 anniversary — nothing’s changed 3 — Year 2 midyear, move 500 users to E3 (no incremental cost) 4 — Year 2 anniversary * Report true up * E3 and CORE CAL Bridge invoice for next 12 months 500 units * Pro Desktop invoices for next 12 months 500 units (1000 Windows) * Desktop Pro count gets reduced by 500 devices that transitioned

Agenda Sympathy for the devil Start me up You got the silver Microsoft succumbs to market forces Start me up What is Office 365? You got the silver What does it cost? I can’t get no satisfaction Is it right for your organization? Under my thumb Contracts, paperwork, and the new Enterprise Agreement Tumbling dice Office 365 versus Google Apps for Business

Two ways to buy 365 Microsoft Enterprise Agreement (EA) Microsoft Online Subscription Agreement (MOSA) Best overall pricing and on-premises license discounts Sales and support through Microsoft and partner 1:1 team and systems Single companywide agreement for cloud services, on-premises, enrollments, and additional products Integrated invoicing Requires 250 or more users or devices Three-year agreement with flexible payment options Standard, non-negotiable monthly subscription price with monthly payments via credit card or invoice Purchase transaction completed online Phone and online support (varies by selected service plan) Suitable for one or more users Subscription term length varies depending upon cloud services chosen (month-to-month or one year)

Updated EA for online services Source: Microsoft

Do you need to change your paperwork? Question 1: What version of the Master Business Services Agreement do I have? Pre-2010 Online services terms and conditions addendum required Question 2: What version of the Enterprise Agreement do you have? 2011 2011 product selection form required Pre-2011 9B3 or 9B4 amendment required

How to negotiate Microsoft’s Office 365 paperwork Negotiate it like a hosting contract — because that’s what it is! Look for guarantees and SLAs: Performance Availability Scalability Security Beware of legal restrictions that may affect your business or your industry. Protection: what’s in the contract if it all goes wrong?

Agenda Sympathy for the devil Start me up You got the silver Microsoft succumbs to market forces Start me up What is Office 365? You got the silver What does it cost? I can’t get no satisfaction Is it right for your organization? Under my thumb Contracts, paperwork, and the new Enterprise Agreement Tumbling dice Office 365 versus Google Apps for Business

Microsoft Office 365 versus Google Apps for Business Google Apps launched 2006 Email, calendars, word processor, presentation, document collaboration, integrated chat and video $5 per month (or free for educational establishments and charities) 4 million business users Less rich in feature/functions than Office 365 Microsoft Office 365 launched 2011 Email, calendars, Word, Excel, PowerPoint, SharePoint & Lync $8 to $20 per month ???? users so far (Microsoft is not willing to reveal the number) Familiar look and feel and features makes transition easier for users.

Recommendations

What can you do now? If you’re just starting out . . . If you’re further along . . . Consider all, or some (hybrid), or none. Try it for a subset of users (try before you buy). Compare 365 versus competition. Features/functions Performance/availability/security Price Monitor outages and issues against your agreed SLAs. Have a fallback plan. Demand that any Office 365 price drops be immediately reflected in your costs.

Q&A

Thank you Mark Bartrick +44 207 323 7656 mbartrick@forrester.com www.forrester.com

Recommended Forrester research Upcoming Forrester report, “Microsoft Office 365: What You Need To Know”