Microsoft released yet another version of Office. In the past, new Office versions included more functionality and yielded higher employee productivity. So even if an enterprise wasn’t ready to roll out the latest-and-greatest through maintaining Software Assurance (SA), the improved solution at least interested them enough to plan on upgrading in the near future while staying on-premise long enough to obtain the right to do so. For those who are unfamiliar with Microsoft licensing, paying for Software Assurance allows your organization to upgrade to the latest version of a product, specifically the most recent edition and the version available during the period that Software Assurance is maintained.
Microsoft’s motivation was clear; they wanted to entice you to continue to pay for SA and roll out the newest versions as they became available (or soon after). Today, however, their motivation is not so straightforward. Microsoft doesn’t actually want you to buy Office 2019 or continue using the on-premise version of Office through your SA payments.
What’s Missing from Office 2019
While there are certainly new features and functionality that come with Office 2019, the issue with this new release is what’s not included. Office 2019 is, in fact, missing many features that businesses, especially large enterprises, require.
For example, many enterprises already utilize or plan to utilize real-time collaboration in Word, Excel, PowerPoint, etc. But with Office 2019, any integration with cloud solutions will come at an additional cost. Features like Intune Integration are not included and neither are some features such as shared computer licensing, which could have a significant impact on organizations with “deskless” or “firstline” workers.
More advanced intelligent security features such as Advanced Threat Protection within Office applications (e.g., Word, Excel, PowerPoint, OneDrive, etc.) or Office 365 Message Encryption are not included in Office 2019 either. To obtain any level of Office Enterprise Protection and related features, enterprises would need to purchase additional Microsoft solutions or even explore 3rd party alternatives (which come with even more fees).
Microsoft prefers enterprises to subscribe to Office 365 instead of purchasing Office 2019 or maintaining SA to obtain future versions of on-premise Office. Before we go any further, the first thing that should jump out at you is the word choice around the two solutions. When you subscribe to Office 365, you don’t own anything; you are at Microsoft’s mercy when it comes to your future needs. At least with an Office 2019 purchase and the follow-on SA payments, you can always take your ball and go home.
Beyond just the immediate and obvious impact of subscribing to a cloud portfolio (versus owning an on-premise portfolio), Microsoft has other end goals in mind. Think of adopting Office 365 as dipping your toe in the water. There are several editions of the Office 365 bundle (e.g., F1, E1, E3, E5), each with more functionality than the last. Even if you upgrade to a more robust edition (such as E3 or E5), Microsoft has an even more robust bundle for your Enterprise to adopt: Microsoft 365. Microsoft 365 also has several editions and the bundle encompasses Office 365, Windows, and Enterprise Mobility + Security.
The Downside for Customers
When you subscribe to Microsoft cloud solutions like Office 365, you are susceptible to significant price increases at renewal and you are even susceptible to licensing changes that can negatively impact how your enterprise utilizes a solution. For example, Microsoft announced that starting August 1, 2019, they will remove their customers’ ability to install on-premise Office Professional Plus on machines where the user was previously covered under a Microsoft 365 E3 or E5 subscription. If your organization currently uses this ability, you may be forced come renewal time to make incremental purchases for software that you once owned the rights to install.
These price increases and licensing changes are designed to force your hand and drive your enterprise deeper into Microsoft’s cloud. Before you know it, your Office 365 E1 toe in the water becomes a Microsoft 365 E5 jump into the deep end. And just when you thought you couldn’t go any deeper, your representative will approach you about making an Azure commitment and utilizing Microsoft’s cloud platform/infrastructure.
When considering Microsoft’s cloud, it is imperative that you obtain complete transparency into future implications when negotiating the deal and that you achieve long-term protections in your agreement. Any strategic adoption or movement further into Microsoft’s cloud needs to include protections such as caps on price increases so that you aren’t exposed at your next renewal.
Microsoft’s goal is not any different than other IT vendors, especially those with only cloud offerings like Salesforce, ServiceNow or Workday. They push customers to adopt the cloud because cloud adoptions likely lead to a scenario where the customer has no choice but to renew. In fact, many long-standing software vendors like SAP and Oracle are shifting their entire focus to selling cloud offerings rather than their on-premise solutions. Microsoft wants to ensure its cloud success through your enterprise and the release of Office 2019 is part of their strategy.
- How to Negotiate the Right Deal with Microsoft
- Microsoft Cloud Negotiations: Sweet Upfront with a Bitter Aftertaste
- Are Firstline Worker’s Microsoft’s Key to Keeping Google Out of the Enterprise?
- A Deeper Look into Microsoft’s October 2018 Price Increases
- Microsoft 365: Look Before You Leap