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Unpacking Office 365: Which License Model is Right for You?

Post Date: 02/07/2019

The following is an excerpt from Office 365 For IT Pros written by a group of experienced MVPs led by industry expert Tony Redmond. It is a comprehensive (+1,000 page) must have eBook for any Office 365 admin and the only guide constantly refreshed to remain current with Microsoft’s stream of updates. The eBook is available in EPUB, PDF, and Kindle versions.

Office 365 for IT Pros can be bought online for an annual subscription of $49.95. AvePoint is currently raffling off 5 annual subscriptions to new blog subscribers. Winners will be notified in March 2019.

This is the fourth post in our Unpacking Office 365 series. Check out the others below!

Microsoft is not a charitable organization and it is in their interest to sell as much of their cloud services to customers as they can. The likely sources of added revenue for Microsoft are:

Convincing customers to use higher-priced plans.

For example, selling the E5 plan for use by a certain segment of the user base.

Selling plan add-ons.

If customers do not want to buy a higher-priced plan, they might be able to buy specific functionality through an Office 365 add-on.

Expanding to include other cloud services.

Office 365 includes basic access to Azure Active Directory and you might like to buy premium licenses to increase the overall security of the tenant and add functionality through features such as conditional access policies, group access reviews, group expiration policies, and password write-back to an on-premises directory used in hybrid deployments.

The same is true of mobile device management, which you can perform at a basic level through the ActiveSync management tools built into Exchange Online but is easier and more functional when you deploy the Enterprise Mobility and Security suite. An alternative to buying separate plans is to upgrade to Microsoft 365 to take advantage of the bundled price for Office 365, Enterprise Mobility and Security, and Windows 10.

Opting to buy options can increase a tenant’s monthly bill by a large amount. On the other hand, if the functionality is needed and it enables you to decommission older systems (especially on-premises servers), then the cost might be justified. Increased security is also an important factor to consider when users depend on internet connectivity to cloud systems.

What is clear is that it is important that customers figure out the most effective set of licenses for Office 365 and other Microsoft cloud offerings by balancing cost versus functionality. When a tenant is operational, you can monitor what functionality is used and what is not, where added software might be needed, and keep a wary eye on the available pool of purchased licenses to ensure that you do not pay monthly fees for unused licenses.

Plan Add-ons

The Office 365 plans include lots of functionality but sometimes you need just a little bit more. For example, assume that you license the E3 plan for everyone, but some people have expressed an interest in MyAnalytics, which is part of the E5 plan. You could simply buy some E5 licenses and assign the licenses to interested parties, but it is sometimes possible to buy the specific feature through a plan add-on. If this is the case, it is usually cheaper to buy exactly what you need rather than to upgrade to the next plan.

To discover what addons are available to you, click Purchase Services in the Billing section of the Office 365 Admin portal, which brings you to the service catalog. You can then select whatever add-on you need and decide how many licenses to buy. Popular add-ons available in the Office 365 catalog include those listed below. Add-ons are licensed and charged for on a per-user, per month basis. The monthly charge for an add-on varies from country to country.