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As recently as three years ago, many Microsoft partners would hear a common refrain from customers, “Why is licensing so complicated?” An entire group of partners were formed solely to help customers understand how Microsoft licensed its software and a second group came together merely to enforce said licensing. Needless to say, neither were often welcomed with joy by customers.

Enter the Cloud

The reason for all this complication, of course, was the legacy business model built around boxed copies of software. The sales channel resembled in many ways a traditional model akin to selling widgets, with large wholesalers, distributors, retailers, “channel-stuffing” and behaviors that made sense if one were selling produce, rather than software.

With the cloud, and digital distribution of software, this model completely changed. The first biggest change was that customers could purchase directly from Microsoft if they wanted to, skipping the partner sales channel altogether. While this was desirable from a customer perspective, they ran into the same challenge from before: a complex licensing scheme which made it all too easy to fall afoul of the rules Microsoft had set, or worse, to not be able to turn on a business featured needed because of poor planning. The cloud made many things easier, but by itself couldn’t change the nature of Microsoft licensing. So partners continued to have to devote large amounts of time to explaining and helping customers master the art of licensing.

A Sweet Suite

Armed with a modern distribution method, Microsoft began to make changes to the way it sold licenses to customers. There were two large modifications: instead of requiring customers to purchase licenses for every staff member as part of an Enterprise Agreement, they began to sell more flexible licensing. And as part of that new model, they began to create larger suites of software to allow customers to purchase a lot of software and then use what they need. This isn’t new, of course: Microsoft has been bundling applications together since Office combined Word, Excel and PowerPoint. Yet the new result has been to align customer goals with partner goals and Microsoft: each party wants the customer to leverage as much of the suite as possible, because if they do not, they may decrease what they spend, or may be not getting enough value.

Microsoft 365

At Inspire, Microsoft introduced a new suite, “Microsoft 365”, that incorporates all the key business productivity software into a single bundle. Importantly, this suite has two flavors to support businesses small and large. Firms under 300 folks in size will elect to go with Microsoft 365 Business, while larger organizations will choose to go with Microsoft 365 Enterprise.

The suite includes Office 365, Windows and Security solutions wrapped together into an easy-to-administer console. With this move, it is now possible for customers to purchase three licenses from Microsoft (Microsoft 365, Dynamics 365 and Azure) that cover the entirety of their business needs. Such a thought was unthinkable for most organizations for the entirety of Microsoft’s existence.

Of course, when customers purchase Microsoft 365, it puts them in the virtuous cycle mentioned above: everyone is eager to ensure they are using the suite to the greatest extent possible. As new features are baked into the suite, Microsoft and the partner ecosystem are all working hard to help with readiness and adoption.

If your organization is using some of the products that are inside Microsoft 365, reach out to New Signature – there may be a way we can lower your costs and increase your value at the same time!