One is eight times more expensive.
When businesses compare the cost of Office 365 to buying a server they frequently only count the licence costs. They then ask why should they pay a higher licence fee for Office 365 on a monthly basis?
The problem is that they are comparing the cost of the individual products against the cost of purchasing their on-premise equivalent. And that is where the comparison is completely wrong. A suitable comparison would be purchasing a car outright versus leasing a vehicle with included servicing and fuel.
I have chosen Lync Online as the first of my series of cloud versus on-premise cost comparisons. Quite often confused because it is cheap and relatively simple to use, if you were to purchase the on-premise equivalent (Lync Server) it would require many thousands of dollars and a considerable amount of infrastructure and consultancy.
Let’s use an example of a business with 50 staff that already have a phone system.
I haven’t begun to factor in hardware to host this virtualised Lync Server environment; backups, monitoring, management, support, additional feature add-ons, or patching and updates. Also not included is internet bandwidth required to support connections for remote users or conference attendees. Needless to say, sufficient bandwidth must be provided with a high-quality connection – which on its own can be several hundred dollars per month.
So let’s compare the above to using Lync Online from Office 365.
Let’s throw in another $400 in IT services to pay to set up Lync Online.
In your first year the cost of running Lync Online would be $3,155 (monthly costs + setup). The annual costs of this are only $2,760 per year – so the on-premise installation costs the same as eight years on Lync Online. Again this is not even factoring in the additional costs to support, maintain and upgrade the server.
Without even considering scalability and amazing performance improvements the numbers speak for themselves.
Loryan Strant is a Microsoft Office 365 MVP (Most Valuable Professional). Follow him on Twitter @TheCloudMouth.
