Microsoft Pricing Surge for Office 365 E5

By Jim Lundy

Microsoft has seen what Salesforce has done with pricing – and realized it needs to go higher. On November 30th, Microsoft announced pricing for its newest E5 SKU for Office 365, and while many will call the bundle a deal, it’s not convenient if you have already done your 2016 Budget Planning. E5 will now come in at US $35 per user per month, which is $13 dollars a month more than the E4 SKU it is replacing. There will be lots of spin from the Microsoft PR Machine about this release. This blog discusses the impact of E5 on the market.

Office 365 E5: Feature Rich

IT Professionals will like the bundle that is included with E5. That said, we wonder if some capabilities, such as Data Loss Prevention (DLP) and Encryption, shouldn’t be part of both the E1 and E3 SKUs. You also get PowerBI and Delve Advanced Analytics. The biggest feature set in E5 is Skype for Business.

Microsoft wants to be your Business Phone

With E5, Microsoft is betting it can convince your IT Department to make Microsoft become your business conference calling and PSTN Calling Service. Note, to do more than Conference Calling in E5, you will need to add the optional PSTN Calling Option, which adds US $24 dollars per user per month to the E5 license. There are many questions about Skype for Business being ready for primetime.

Our take is that it isn’t ready – yet. One minor example: there is no Skype for Business Client for the Mac. Microsoft has been asked repeatedly about this and their answer is that it will arrive by the end of 2015. A Windows-only solution for Skype for Business isn’t the reality of 2015.

Phone Call Reliability isn’t Easy to Deliver

The biggest issue and one that many IT Professionals don’t fully understand, is that delivering 99.9999% reliability for a phone call is a very tough task. Microsoft is counting on the big phone carriers to help, but there is more to the story. The desktop and mobile clients need to be fully bulletproof and so does the service. Most enterprises would be advised to test heavily before rolling this out.

Upgrade to Office 365 E5 is the New Battle Cry

Microsoft is not waiting to make the push for E5; the emails have already gone out. The Microsoft Salesforce and its VARs are trained and ready, and their pitch will be aggressive. If you make the buy, you will essentially be doubling your monthly spending with Microsoft (E4 vs E5 with PSTN Calling). There is more to this, but be prepared: if your enterprise uses Microsoft Office, you will be hit with the E5 Upgrade Pitch.

 

Editors Note: Aragon Research will be publishing an in-depth comparison of Office 365 vs. Google for Work. It will be published this month and is available to Aragon Clients (or it can be purchased online).