How much would Microsoft Office 365 cost for my business?

When we get inquiries about Microsoft 365 (previously known as Office 365), one of the first questions inevitably is ‘how much is it ?’

Hopefully, this article will go some way to helping you understand the costs – both the one-off costs and the ongoing license costs.

Let me begin by saying Microsoft 365 is a superb Email system that is a great solution for nearly every small or medium-sized business (in fact it is also proving to be the standard email system for many larger organizations too).

But – as well as the Email component of Microsoft 365 – the bits you are undoubtedly familiar with (Email, Calendars, Contacts, etc) – there are many other products bundled into the whole 365 ecosystems. So, as a whole, it is a fabulous solution for your business.

Over the years we have managed and implemented many Microsoft 365 migrations – so we know a thing or two about the various complications and intricacies – and hopefully, this article will help you understand what is involved. Also, as a Microsoft Partner, we can provide our customers with their Microsoft 365 licensing

Costs Overview

As nearly every organization already has an email system of some sort, the initial costs when considering Microsoft 365 is the project to migrate.

Once migrated the pricing is based on a subscription system (isn’t everything these days) – which has the significant benefit of only having to pay for what you need.

The subscription licenses come in a variety of ‘flavors’ depending on what you need (I’ll go into the differences later on) – and you can either pay these license costs direct to Microsoft (by having a credit/debit card on your account) – or you can have a Microsoft Partner (such as Synium) to provide the licenses for you, and invoice you.

Licenses are charged on a ‘per user’ basis – so if you have 10 staff, and they all need an email mailbox, you will need 10 licenses. It should be mentioned this isn’t a ‘per email address’ cost – as you can have multiple email addresses for individuals (aliases) – and you can also have any number of group email addresses at no extra cost.

One other thing you may wish to consider is ongoing support. Whilst you can do this yourself (in terms of creating new accounts and resetting passwords) – you may want to have your IT support partner manage this for you – some of whom may charge extra for this service.

Initial Migration Project

Nearly all Microsoft 365 projects begin with a migration away from the existing system. What the existing system is, greatly influences the migration process.

The majority of migrations are from either a Microsoft Exchange system (either on a standalone Exchange server – or from Exchange within Microsoft’s Small Business Server, which was the de facto solution for small businesses a few years ago). The other type of email system to migrate from is a Web-based email system (based on a POP3 or IMAP technology (don’t worry if this means nothing to you)). This is a common solution for businesses who have had their email sat alongside their Website.

If you have Exchange, then the two options for migration are to do a ‘Cut Over migration’ or a ‘Hybrid migration’ – and if you are on a Web-based email system, then it needs to be a manual IMAP migration.

All methods are relatively straightforward, and can usually be carried out over a matter of a few days.

We usually aim to do our 365 migration projects around a weekend, starting on a Thursday evening or Friday. This allows us to minimize any downtime for businesses receiving email – as with all migrations, there are certain actions (eg the DNS changes) which will temporarily cease email delivery. However, carrying these out over a weekend can significantly decrease any inconvenience.

The first stage on any migration project we carry out is a thorough fact-finding – understanding what mailboxes need migrating; what new accounts need creating; what aliases, groups, forwards, signatures are needed, etc. We also need to understand the mailbox sizes of each user, along with the internet connection speed to help us predict the time migration will take – all of which can influence the migration project costs.

The migration itself is different depending on the type (see further information below) – but the final stage would be to reconfigure Outlook (or other email clients) to now use Microsoft 365 servers. This requires individual profiles to be set up for each user, and for their legacy emails to be re-downloaded from the newly migrated servers.

All of these facets contribute to the Migration Project costs, so it is not easy to give an accurate indication for anyone reading this who is looking for an accurate cost, as each project is different. But to give you an idea – here are a couple of examples:

Example 1 – A business with 10 staff, each with an existing mailbox on an Exchange server within Small Business Server – looking to migrate all mailboxes to Microsoft 365. With mailbox sizes between 5-10 GB, and a decent (>50mb) internet connection would cost between £600-900 as a one-off cost.

Example 2 – A business with 20 staff (each with a mailbox) on a web-based IMAP/POP3 server. With mailboxes around 5-10 GB and a decent internet connection. This costs slightly more, as it is a much more manual process, and takes quite a bit longer to carry out. The ballpark price would be £900-1200.

It should be noted that any migration is a one-off cost, and are really the only setup fees for a business to start getting the huge benefits Microsoft 365 brings.

Different Migration Types

Exchange – Cutover Migration

A cutover migration is possible for businesses using Microsoft Exchange 2003, 2007, 2010, and 2013. This method is recommended by Microsoft for companies with less than 150 Mailboxes. With this method, you connect your on-Premise Exchange server to your new Microsoft 365 Tenant and migrate the data over. Once all the data has been synced you can then switch your users over to 365 at a given time and date to suit.

Whilst much of this type of migration happens automatically – there is still the requirement to set up individual users profiles within Outlook.

Exchange – Hybrid Migration

This method of office 365 migration allows you to integrate Office 365 with your on-premises Exchange environment, allowing you to synchronize and manage user accounts for both environments. This type of migration is recommended for larger environments (over 2000 mailboxes.)

Manual/IMAP Migration

The other main type of migration is from a Web-based email system (often originally provided when the business was set up, and a website was needed).

This method of migration is the most time-consuming as it is a predominantly manual process – however, it is the type of transition that delivers the most improvements, as businesses moving from these simple email systems are often pleasantly surprised by the additional functionality available.

License Types and Costs

There are fundamentally 3 license options for SMBs primarily depending

On whether you need the Office applications (Word, Excel, Outlook, etc) – and whether you require the top level Advanced Security and the higher level of Device Management.

The 3 license variations are:

Microsoft 365 Business Basic which is £3.80 per user/month

Microsoft 365 Business Standard which is £9.40 per user/month

Microsoft 365 Business Premium which is £15.10 per user/month

(Each of these is exVAT and are on an annual basis if purchased directly through Microsoft – but can be every month if done through your IT partner)

All of the above license variants include some additional fantastic applications and functionality. All include Microsoft Teams, which is their superb messaging and video conferencing tool – which has had an incredible uptake in recent months as people embrace remote working.

They all include Microsoft Sharepoint and OneDrive too – which are superb solutions for businesses to safely and securely move their data ‘to the cloud’ – again these are solutions which have seen an increase in popularity as businesses shift to a more remote working scenario. If you want more information on either Teams or Sharepoint, please get in touch, and we’d be happy to explain a bit more about them each.

Microsoft 365 Business Basic

This is Microsoft’s entry-level license, but if you already have Office application licenses (to use the Office apps on your PCs/Laptops), then this could be all you need for your staff.

It includes a 50GB mailbox – which is huge – and is often considerably more than people have been used to with older email systems.

It includes all the other functionality of Outlook – so the Calendars, the Contacts, and Task lists. It allows for the sharing of calendars between staff, and easy collaboration of team members.

The mailboxes can be accessed in a multitude of ways;

  • On the desktop (on a PC/Laptop) using Outlook
  • Through a browser (Chrome, Edge, etc) on any internet-connected device.
  • On any mobile device (phone/iPad etc) – using free Outlook app

Microsoft 365 Business Standard

This is as per the Business Basic, but with the added benefit of being able to install the full suite of applications of Microsoft Office (Word, Excel, Outlook, Powerpoint) on up to 5 devices – meaning you can install on your work PC/laptop, as well as any you may use at home.

It also allows you to download the very latest version of Office – meaning you are always up to date with the latest versions.

Whilst this is more expensive than Basic (£9.40 compared to £3.80) – it is comparable to purchasing the full license of Office separately every couple of years. This coupled with the ability to install on up to 5 devices can make this an appealing variation to go for.

Business Standard also includes access to Microsoft Bookings and MileIQ – both are very useful tools for businesses.

Microsoft 365 Business Premium

As per Business Standard above, but with the significantly increased benefits around security and device management.

This should be seriously considered by every business these days. Some may see the price as prohibitive – but the protection these added features really could pay for themselves in protecting against data loss – something that is difficult to put a price on.

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