Wondering whether to fork out for a new server and upgrade to Microsoft Windows Small Business Server 2011? Or should you forget about the server and go to the cloud with Microsoft Office 365?
The answer depends on whether Office 365 can replace everything that you get from Small Business Server (SBS). For many smaller businesses it can do just that, saving them the hassle of owning and maintaining a server and giving them the benefits of cloud computing.
In this article we compare the features between SBS and Office 365 for Professionals and Small Businesses (known as the P plan) and look at other issues relevant to small business such as licensing, security, remote access and flexibility. For a feature-by-feature comparison, check out this table showing comparing both versions of Small Business Server to both families of Office 365 licences.
FEATURES: Tie SBS-Office 365
Exchange and SharePoint
Office 365 and SBS come with Microsoft Exchange and SharePoint, however SBS only has the standard editions which lack features such as legal hold and form services. Office 365 includes a 25GB mailbox per user, which eliminates the enormous burden of managing email inbox sizes.
The full enterprise versions of both products (as well as other features) are available through the enterprise plans for Office 365.
SharePoint does the same for the file server by creating online storage for all a business’ documents. This makes it much easier to access documents outside the office and automatically backs up the data on Microsoft’s network. (It is still wise to make local backups.)
SBS has Windows Software Update Services for updating Microsoft software (operating system, Office applications, etc.) on all the machines in a business. Microsoft does have a cloud-based patch management tool called Windows InTune but this is sold as a separate service to Office 365. Each Windows InTune subscription comes with a full Windows 7 Enterprise licence and costs $15 per PC per month.
The productivity suite Office 365 has no way to run line-of-business applications. Many businesses will rely heavily on a server-based application such as accounting, document management, project management, ticketing, membership or practice management.
Unless the third-party software vendor that makes the line-of-business application has developed a cloud-based version, a business will have to hold onto a server to run it. In some cases there may be a competing cloud-based product to move to, but this needs to be evaluated separately.
The premium version of SBS comes with the SQL database; Office 365 can only run databases in Access. Microsoft wants businesses to move their databases to Azure, its cloud service for hosting servers (or virtual machines, in the cloud context). This is likely to be beyond the technical expertise and budgets of a small business, so if you have a SQL database then you should hang onto your server.
Read on to find out which is more secure and flexible.
SECURITY: Advantage Office 365
The elephant in the room when it comes to cloud computing is generally security. How can I trust another company to keep my data safe from hackers or system failure? Business owners tend to feel reassured if they can see the server sitting in the office.
But which systems have more resources dedicated to security and monitoring – an SBS server inside a business or the Office 365 servers in a Microsoft data centre? Clearly it would have to be those of Microsoft which has more money to spend on firewalls and other protective measures.
Office 365 includes anti-virus and anti-spam filtering for email and sites with Forefront Online Protection which operates invisibly in the background in Microsoft’s data centres. It is much more effective than on-premise anti-virus because all the updating and patching happens in the cloud – there’s no effort required by the business to keep up to date against the latest threats.
Concerns about data location are similarly overblown. People appreciate the significant convenience they receive, with minimal risk, from online banking where money is stored, sent and received as ones and zeroes whizzing around the globe. Why is your data any different?
It’s important to remember that while storing your information on Microsoft’s servers certainly reduces the risk to security, it does not eliminate it. It’s also worth noting that only information stored on SharePoint Online through Office 365 is backed up on Microsoft’s servers. Other data stored on a PC’s local hard drive is not backed up to Office 365. SBS Essentials (but not SBS Standard) does offer to backup local PCs to a server.
REMOTE ACCESS: Advantage Office 365
While SBS server is connected to the internet so it can send and receive email for the business, it also lets users log into the server to edit and download files. But if the internet connection to the office fails, then the server and all the business’ files and emails are inaccessible to workers outside the office.
If the same situation happened with Office 365, workers could be up and operational again using wireless internet dongles or by working from home.
Thus there is a much higher dependency on your internet connection if you select to run an on-site network like SBS. With Office 365, people can work where ever they have internet connectivity, whether that be in your offices, at home, at a local coffee shop, the airport lounge or wherever.
It is possible that Microsoft’s data centres, which run Office 365, could also go offline, denying users access to their files. However, this is much less likely as each data centre has many high-speed internet connections to the Australian networks.
Office 365 gives a business the ability to view documents online and make basic edits with Office Web Apps without the need for a VPN. This is highly useful when working remotely such as on a customer’s site.
FLEXIBILITY: Advantage Office 365
SBS 2011 Standard requires a significant up front cost to implement and then continued ongoing maintenance. This means if you implement SBS and your business started to grow dramatically you’d have to invest more to scale up. Office365 by contrast (especially the enterprise licences) provide a far more flexible solution. If you only need five licences this month, that’s all you need to pay for.
If a certain group of users don’t need all the power of Exchange then you can allow them to use the reduced functionality and costs of the kiosk worker licences. With Office 365 all you need to worry about is what features an individual needs rather than guessing what features your whole business may need and being somewhat limited to that after the fact.
Read on to find out which is the cheapest and easiest to license.
LICENSING and COST: Advantage Office 365
The upfront cost to the cloud option with Office 365 is certainly cheaper than buying a server with SBS because you don’t have to pay for the server hardware and installation and maintenance. Office 365 may be more expensive in the long run especially if you are on the enterprise plans, but the flip side is that you will always be running the latest software.
SBS requires a server and a licence for each user or device (chosen at time of purchase) called a CAL, which cost about US$70 each. The small business plans for Office 365 cost $7.90 per user per month and the enterprise plans start at $17 per user per month.
To replace the ability to update Microsoft software on a network (with Windows Software Update Services) would require subscriptions to Windows InTune that cost $15 per PC per month. A business also saves on the cost of anti-virus and anti-spam software because Microsoft supplies this as part of Exchange Online in Office 365.
A business wanting to upgrade from SBS would need to buy two separate licences for SharePoint and Exchange enterprise versions, Windows server licences and client licences for Windows, Exchange and SharePoint. The average cost for an on-site SharePoint Enterprise server including Windows and SQL software can be up to $1500 per user.
Office 365 replaces SharePoint and Exchange server licences and client licences with a single user licence. In terms of the cost of managing licensing, it is easier and simpler to use Office 365 than SBS.
HYBRID SOLUTION: Advantage SBS
The SBS family is not limited to SBS Standard. There is also SBS Essentials, a cut-down version of SBS that integrates closely with Office 365 and provides on-site storage and local backup of workstations as well as access to all the features and functionality that Office 365 provides.
This is a great solution for businesses that deal with large files which would slow down an internet connection to SharePoint Online, or which require an on-site server to run a database or line-of-business application.
It is possible to do more with the on-site based SBS Standard system but if you have Office 365 doing all the heavy lifting for Exchange (emails), SharePoint (collaboration), etc., why would you need to replicate those features on-site with SBS Standard?
Any business needs to minimise the amount money it spends on technology to provide it with a business advantage. A business also wants the most flexibility and greatest range of features for its investment and on balance Office 365 fits this bill much better than an on-premise SBS server.
This doesn’t mean that Office 365 is the solution for all businesses and it doesn’t mean that there are things that Office 365 can’t do. It does mean that Office 365 should be taken seriously as an option by small businesses that once only considered on-site servers.