Microsoft loves bundles. Case in point? Microsoft E5, E3, E1, etc. – the list truly does go on. In fact, Microsoft is somewhat of a legend in this regard. Microsoft’s use of bundles dates to 1990 with the release of Microsoft Office 1.0. At that time, the Office bundle included Microsoft Word, Microsoft Excel, and Microsoft PowerPoint.
Today, Microsoft Office Professional Plus has expanded to include Outlook, Word, Excel, PowerPoint, Publisher, and Access. The bundle also includes OneNote and the Skype for Business client. And, interestingly enough, today’s offering is about half the cost of the license bundle way back in 1990. Clearly, Office has been a smashing success for Microsoft and has changed the way that the world uses personal computers.
Fast forward 30 years and there hasn’t been much change to the way Microsoft packages its top-selling offerings. Create market share by bundling new products with proven success stories, thus displacing competitive products with low cost alternatives.
When we think about Microsoft’s current offerings, it is important to remember that subscription products are based on a per user, per month fee and there are no perpetual use rights offered with any of the Office 365 or Microsoft 365 bundles. So, when considering the E5 versions, what’s the first thing that comes to mind? For many, it’s the added power of the solutions included in the bundle – things like Cloud App Security, Azure Active Directory Plan 2, Power BI, InTune, and more. But what many customers overlook is that the components of each bundle may not necessarily be the best of breed/best of category product. And then there’s the fact that the E5 bundles are almost twice the cost of the E3 bundle.
Bottom line: if you don’t fully understand how Microsoft’s bundles align with your requirements, you’re an ideal candidate for overspending (and possibly compliance risk).
Microsoft E5 SKUs – A Good Deal or Smokescreen?
Let’s look at Level C pricing for the Enterprise Agreement:
Microsoft would be quick to tell you that you are receiving an incredible deal as buying the bundles is always less expensive than purchasing in an à la carte fashion – and they would be right. Let’s look a little closer at the math for Enterprise Mobility + Security for an EA Level C customer:
If you purchased all three components of EMS E5 à la carte, you would receive a 37.29% discount over the individual component pricing when buying the bundle. It’s likely that you would need the EMS components for every user as well, meaning EMS E5 makes sense.
The question becomes more complex when you look at the Office 365 E3 vs. E5 pricing. While products like Advanced Threat Protection are likely going to be products that you purchase for everyone, what about things like Power BI Pro? And the Phone System Subscription? These two products alone are over 40% of the cost delta between O365 E3 and E5 and it is a much more deliberate conversation when asking yourself if you need to purchase those components for everyone.
Microsoft sales team are compensated on selling the bundles, especially M365 E5, and will often refuse to discount a renewal unless you make an enterprise-wide commitment to what makes sense for Microsoft. NPI recommends that you do the math and validate that it makes sense for your organization. Some assessments, like the EMS example above, are easy. Some are more complex. A deep understanding of Microsoft’s licensing/subscription alternatives and how they align with your business and user requirements is absolutely critical.
RELATED CONTENT