Office 365 Evaluation Overview

Office 365 hosted services and the corresponding on-premises server applications now have similar capabilities, so cost, compliance, scalability, and other factors will drive the selection process.

Cost Factors

The biggest factor in most evaluations of Office 365 will be the possibility of reducing total cost of ownership for e-mail and other services by handing them over to Microsoft. Office 365 customers pay a per-user fee monthly or annually. Compared to running similar software on-premises, those fees will frequently deliver lower cost over time, because of costs eliminated for on-premises operations, hardware, and licensing. However, organizations should also expect deployment and migration costs, and additional costs for on-premises software and other infrastructure required by Office 365 hosted services.

Operations, Hardware, and Licensing

Office 365 hosted services such as Exchange Online can deliver savings in the following areas:

Operations. Microsoft takes over maintenance of server infrastructure, including hardware replacement, OS and application software patching, database management, and low-level software configuration. The customer organization will still require staff for higher-level application management, including user and business unit provisioning, application customization, and policy definition and enforcement. In general, remaining staff (not part of a staff reduction to offset the outsourcing cost) will likely be able to focus more on handling requests from business units, which could also shorten request backlogs.