Microsoft Office Tutorials and References
In Depth Information
Economies of scale
Office 365 licensing serves as the user client access license (CAL) for on-premises and
cloud-based services.
Office 365 ProPlus is licensed per user instead of per device, and provides each user
with the ability to install and activate up to five copies of Office ProPlus.
The basis of Office 365 subscriptions originates from the SaaS model. While it is a big
departure from the mindset of owning software, the benefits include a substantial cost
savings over time as well as a solution for software obsolescence.
Economies of scale
The subscription model of Office 365 is often touted as a more efficient software
acquisition model because it is based on utilization rather than ownership. It also makes current
and updated software readily available to customers. The third benefit of Office 365 from
a financial standpoint is the ability to create high-density data centers. Office 365 has been
adopted by large corporate organizations as well as many government entities throughout
the world. As such, it has reached a level whereby the economy of scale allows Microsoft to
lower the cost of operations and pass the savings to customers. To lower the cost of
operations, Microsoft has invested significantly in efficient data center designs and renewable
energy sources. These investments benefit customers as well as the environment.
The sizeable investment in data center operations that support Office 365 is on a scale that
is beyond the economic feasibility of many organizations, particularly if the organization's
core business is not IT. Adopting Office 365 provides access to world-class data centers; the
most current software can be scaled rapidly in response to business needs. There is no need
to excessively build on-premises capacity. An organization that acquires more capacity than
needed will incur a higher cost of operations as well as unnecessary acquisition expenses.
On the other hand, if you do not build enough capacity in your data centers, you run the
risk of having an undersized infrastructure that could impact the business. Finding the right
level of data center capacity is challenging, and most IT organizations will err on the side of
caution by choosing to have more capacity than needed. Office 365 eliminates this
problem for IT organizations.
Office 365 data centers are geo-redundant and are configured as active-active pairs.
Therefore, Office 365 customers inherit true redundancy because the infrastructure is not only
duplicated, it is also distributed in geographically disparate locations to minimize the risk
of outages due to natural disasters. Investing in geo-redundancy disaster recovery options
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