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Microsoft Publishes Partner Preview List for the New Office 365 E5 Plan

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Microsoft Publishes Partner Preview List for the New Office 365 E5 Plan
    

By: -
10 Nov 2015
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When Microsoft announced it was adding PSTN calling and conferencing to Office 365 via its new E5 package this past summer, we had one collective question: “What will it cost?” I believe we asked that question monthly, if not weekly, over the last 6 months. So, at long last, Microsoft has revealed the pricing details, providing a detailed briefing on topic to the Analyst community this week. Is it weird that my reaction to this announcement was oddly similar to Steve Martin’s phonebook scene in The Jerk? Yeah, probably, a little weird.  (Note from the Blog editor: you really should watch that scene to understand Bill's excitement!  And this clip is suitable for work!)

As you’ll see in the pricing slide, the E5 plan is priced at $35 USD per-user-per-month (PUPM). In addition to an Exchange mailbox, Yammer, SharePoint, OneDrive online storage, and the full Office experience (on five separate computers), the E5 license enables all-you-can-eat conferencing and PBX functionality, along with analytics, security, and enhanced discovery features. Note that E5, by itself, provides PBX features, but does not provide a phone number and calling plan. Microsoft expects that many enterprises already have a voice plan in place from an existing vendor like AT&T, Verizon, BT, Vodafone, etc. In these cases, the enterprise can port its existing voice service over to Office 365 and effectively replace its existing PBX.  Or, for an additional $12 PUPM, an enterprise can buy a domestic PSTN calling plan directly from Microsoft – receiving a U.S. phone number and the ability to send and receive calls to and from the U.S. PSTN. Add another $12 PUPM, and a customer can make international calls as well. Note that the domestic U.S. PSTN Calling add-on comes with a 3,000 minute PUPM cap, and international add-on is capped at 600 minutes.  These minutes are shared across all licensed users within an enterprise, however. Conversely, the conferencing PSTN service has no minute or usage caps, although international dial-outs may incur an incremental per-minute charge.

The E5 package will be available globally on December 1st this year.  The PSTN Calling add-on will only be available to U.S.-based customers initially. You can check out Microsoft’s Office Blog for additional detail, including a list of international conferencing locations and compatible device details.

As I noted in September, I’d consider a price of $50 PUPM for the full E5 feature set as disruptive in today’s marketplace – and sure enough, Microsoft comes in at $47 for an E5 license with a U.S. voice package. Of course, considering the mix of services that E5 offers, it is difficult, if not impossible, to provide a true apples-to-apples price comparison. Here are a few examples of hosted offerings that provide features that are included in the E5 licenses:

Telephony-enabled UCaaS – Every hosted telephony provider has updated their service offering over the last five years to include a UC experience, including desktop and mobile clients – think 8x8, Vonage, RingCentral, Mitel MiCloud, Shoretel Sky, etc. etc.  The average sales price (ASP) for a base UCaaS offering providing a phone number, domestic calling package (LD), and a client supporting IM and presence, VoIP and PSTN telephony, video, desktop sharing, and conferencing with three or more people is around $32 PUPM for SMBs, and around $22 PUPM for large enterprises. Of course, this doesn’t include email, meeting broadcast, online storage, office apps, content management, social enterprise, analytics, etc. etc.

The join.me web conferencing service – for $20 PUPM, you get unlimited audio, video, and web collaboration with PSTN calling to 50+ countries for up to 50 participants. Along with the features listed above, you’re missing PBX and a telephony calling plan. Oh, and Skype for Business supports up to 250 participants – join.me offers support for up to 250 participants for $5 more ($25 PUPM).

Google Apps for Work – in terms of a feature check-list, Google’s Apps for Work offer is perhaps the best comparison – and also the most aggressively priced. A measly $10 PUPM buys you an email address, Hangouts with audio, video, and web conferencing with up to 15 participants, Google Drive with no storage limit, analytics, e-Discovery and archiving policies, and additional admin controls. Switch.co offers a telephony-enabled UCaaS experience complete with a phone number, unlimited domestic PSTN calling, and integration with the Google Apps ecosystem for an incremental $15 PUPM; however, you’d still need another third-party service if you want to include PSTN callers into a Hangout - and many would argue that Microsoft’s offering, overall, is better positioned for most enterprises – from admin controls to depth of analytics to collaboration scale, features and beyond.

So, overall, I’ll stick to my original position – the $47 price point is indeed disruptive, especially for the SMB market, and when considering the full feature set. Some will argue that the full feature set is not applicable for the average enterprise – for example, Yammer is unlikely to be fully implemented for every E5 end user. That said, every enterprise requires a number of key features delivered by E5 – email, telephony service, PSTN conferencing, office productivity apps, and content storage are considered table stakes at most organizations. Put these services together from another set of vendors – including Office or equivalent productivity software – and you are most likely between $55 and $60 or more.  This is before adding the social enterprise, analytics, security, and other value-added features provided by E5.

Of course, the market will be the true test of the pricing model here. Mid-to-large enterprises purchasing 500 or more seats at a time may view this pricing as high, based on their experience with volume discounting from other UCaaS vendors.  That said, we’ll note these are list rates, and we have not received details on the potential for volume discounts.