When deciding on a licensing model, many customers ask themselves several questions:
- How much would it cost to proceed with a comparable on-premise solution?
- What is the risk of not doing anything?
- How long will it take to achieve a Return on Investment (ROI)?
These types of questions highlight the importance of cost-benefit analysis in an online services solution acquisition.
Organizations should engage in a cost-benefit analysis or produce a business case to ensure they're making a wise business choice. When setting up the analysis, the organization should gather details surrounding the costs and capabilities of their current environment so that they can compare them to the Microsoft 365 solution.
When performing a cost-benefit analysis for a cloud solution, an organization should compare the following benefits of Microsoft 365 against their current infrastructure or any proposed on-premise infrastructure upgrades:
- Improved security
- Reduced TCO
- End-user productivity
- Increased availability and reduced downtime
- Employee savings with new or improved collaboration scenarios
- Employee savings with new or improved mobility scenarios
- Infrastructure maintainability
- Improved compliance
- Travel savings
The following table compares the capabilities of on-premise and cloud deployments:
| CAPABILITY OR TASK | ON-PREMISES DEPLOYMENT | MICROSOFT 365 CLOUD SERVICE DEPLOYMENT |
| Infrastructure acquisition and maintenance | Customer-owned and customer-managed. | Microsoft-owned and Microsoft-managed. |
| Upgrades | Customer's responsibility. | Microsoft's responsibility. |
| Security | Customer's responsibility. | Microsoft implements security protocols and attestation for engineering and support resources. The customer is responsible for using the tools provided to further secure user identities, applications, and devices. |
| Compliance | The customer is responsible for developing, deploying, administering, and documenting controls. | Microsoft is responsible for some managed controls. Certification is performed and validated on a regular basis. Microsoft and the customer share responsibility for other controls. The customer is required to follow best practices to implement and document their portion of the controls. |
| End-user productivity | The customer is responsible for measuring productivity with the available tools implemented and maintained locally. | It's the customer's responsibility to manage and report on user adoption with reporting tools provided by Microsoft. |
| Mobility | Based on versions and applications deployed and managed by the customer and governed by customer networking configuration and capability. It requires the purchase, deployment, configuration, and management of a Mobile Device Management (MDM) platform. | Available for all apps included in the product suite. An MDM platform is included. |
To help organizations and partners during the cost-benefit analysis process, Microsoft makes a number of tools and calculators available, including the following:
- Microsoft OnRamp Resources: This includes documents about the Total Economic Impact (TEI) of Microsoft 365 E3 and Microsoft 365 E5, as well as an analysis of improvements to end-user productivity. For more information, see https://transform.microsoft.com/resources.
- Microsoft OnRamp Value Calculator: This is a tool that provides you with calculations of cost and benefits achieved with Microsoft 365 for an organization, based on values from Forrester TEI studies for Microsoft 365. For more information, see https://vc.transform.microsoft.com.
Organizations should also take advantage of reviewing public case studies and, if possible, study how other companies measured the progress and benefits of a cloud solution. If an organization is engaging with a partner to purchase and deploy services, they may also be able to obtain customer references to get an understanding of a solution's real-world value.