Most enterprise customers start their journey into Microsoft’s cloud (whether it be Office 365 or the more robust cloud bundle, Microsoft 365) by making sure those sitting in the boardroom and the knowledge workers that work for them have the solutions needed to be successful and productive. But once these cloud solutions are in place, they often realize (or are repeatedly told by Microsoft) that a complete and successful digital transformation requires ALL employees to have the necessary digital tools.
Without this inclusivity a company’s digital transformation will effectively remain incomplete and that is simply not an option for enterprises moving forward. This is where “firstline workers” come in. Though these workers play a critical and often a customer-facing role, to this point, they have not received enough attention. Microsoft wants to change that and is relying on enterprises shifting their attention to the needs of this workforce.
What Are Firstline Workers?
Firstline workers are essentially the employees on the front lines. They are often deskless workers that do not have a dedicated or work-related digital device or PC and if they do, it is shared. Examples of firstline worker roles include store managers, field technicians, flight attendants, and production line workers. Based on a study commissioned by Microsoft, there is an estimated 2 billion firstline workers in the global workforce with roughly 690 million working in enterprises with 500+ employees. As you can also imagine, in industries like retail and hospitality, firstline workers make up the vast majority of employees.
Given the size of this market and the fact that more enterprise business leaders are realizing firstline workers must also have the proper digital tools to achieve a successful digital transformation as well as desired improved business outcomes, this is a very lucrative opportunity for Microsoft or any other IT vendor with an offering that could meet their needs.
Microsoft Targets Firstline Workers with Office 365 F1 and Microsoft 365 F1
Knowing that the workers behind the counter, out in the field, on the phone, and on the shop floor don’t need the complete functionality that comes with the other Office 365 and Microsoft 365 plans (i.e., E3 and E5), Microsoft wisely created the F1 (Firstline Worker) plan to provide a digital tool or cloud offering that provides functionality mapped to the typical needs of these types of workers.
This offering is meant to foster culture, collaboration, and technology at a much lower cost per user and at a price point that aligns more closely with the expected value – or at least doesn’t prevent the conversation around expanded cloud adoption from taking place. It is important to note that Office 365 F1 was simply a rebranding and renaming of the previous Office 365 Enterprise K1 (Kiosk) offering and that Microsoft 365 F1 was unveiled in the fall of 2017 during Microsoft Ignite.
Ultimately, Microsoft focused on firstline workers and created offerings tailored to them in order to gain adoption of its cloud offering throughout the entire organization, not just parts of it. Complete adoption makes it even harder, if not impossible, to exit down the road (a.k.a. vendor lock-in). This also provides Microsoft with an even larger base of users with evolving and different needs that will provide increased upsell opportunities over the life of the relationship.
Where Google Comes In
It is clear by their product development focus, marketing efforts, and aggressive sales tactics that Microsoft realizes that not only is the firstline worker opportunity massive and represents a significant immediate and long-term revenue stream, but it also represents a real potential vulnerability as Google continues to focus on gaining more enterprise customers. If Microsoft is able to get enterprises to adopt Office 365 F1 or Microsoft 365 F1, it creates an even greater barrier to entry for Google and their G-Suite offering.
Microsoft understands that Google has a real opportunity to gain adoption and an initial entry point in enterprises through the firstline workforce. Even though Google does not yet have a solution or G-Suite plan specifically dedicated to firstline workers like Microsoft does, it is safe to say that it is only a matter of time until they do.
The fact of the matter is that many enterprises at least believe Google’s G-Suite offering could provide their firstline workers with what they ultimately will need and are willing to at least give Google a shot to make their pitch. We are speaking to many enterprises that are considering Google G-Suite and not just to create leverage during their renewal negotiations with Microsoft. This is especially the case if Microsoft has been difficult to work with or these employees already have a familiarity with Google’s solutions and thus will likely be productive at the outset.
Another development that signals Microsoft’s interest in creating barriers to entry for Google and their G-Suite offering is the recent rumblings that Microsoft is working on and planning to release a consumer Microsoft 365 offering. This is yet another way to get more users, in this case consumers rather than enterprise users, using Microsoft’s cloud offerings rather than Google’s. These consumers could very likely become — and may already be part of — the firstline workforce in enterprises and Microsoft is well aware of this.
What This Means for Enterprise Customers
If you are an enterprise customer considering the adoption of either Office 365 F1 or Microsoft 365 F1, it will be extremely important for you to effectively evaluate the included functionality to ensure it will provide a true solution for your particular firstline workers’ needs (not all firstline workers are created equal) and will deliver tangible value back to the business as expected, based on the pitch made. In addition, it will be critical to gain commitments from Microsoft regarding the level and depth of investments Microsoft is willing to make to help drive adoption and utilization in a timely, efficient, and effective manner.
Lastly, because that special one-time upfront discount beyond volume that Microsoft is using to get you to adopt, is most likely not special enough, you should ensure your upfront and hopefully negotiated per user price is actually competitive and comes with proper long-term price protections and a level of flexibility that accommodates actual timing of needs. It is highly unlikely that all firstline workers will need, or will even be ready to start receiving, value out of the gate and that is how Microsoft is going to want customers to sign up.
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