Should You Rent or Buy Your Email and Productivity Apps?

Microsoft dominates the business email and desktop productivity markets. Over the past few years, the company has been pushing hard to move its user base for both to Office 365 and away from Exchange Server and desktop versions of Office. The push has intensified in recent months to the point where the company is now telling customers not just to adopt Office 365, but also not to use non-Office 365 solutions. For example, as noted in this article, the Microsoft corporate VP for the Office and Windows group said that the various applications in Office 2019 are “frozen in time. They don’t ever get updated with new features”. By contrast, Office 365 keeps “getting better over time, with new capabilities delivered every month.” It makes one wonder why Microsoft bothered to produce Office 2019, but that’s a subject for a different post.

Perhaps telling people not to use your products is the natural consequence of having such a dominant market share that the only competition left for your new and shiny products is your old and dull ones.

The key for decision makers, then, is to determine if the “new capabilities delivered every month” in Office, coupled with the reduced IT labor required to manage corporate email, is worth becoming a renter in perpetuity rather than a buyer.

To compare the costs of renting versus buying for a 50-person company, we compared the cost of two competing systems:

  1. MDaemon Server (including MDaemon AntiVirus, MDaemon Connector for Outlook, MDaemon ActiveSync and MailStore email archiving) and Office 2019 Home & Business.
  2. Various flavors of Office 365 (Office 365 Business Premium, Office 365 Enterprise E3 and Office 365 Enterprise E5).

Using only publicly available pricing on the MDaemonOffice 365 and Amazon.com web sites, here’s the annual pricing to support 50 users with business email and productivity applications over a three-year period:

  • MDaemon and Office 2019: $114.68 per user per year
  • Office 365 Business Premium: $150.00 per user per year
  • Office 365 Enterprise E3: $240.00 per user per year
  • Office 365 Enterprise E5: $420.00 per user per year

Of course, the primary advantage of any cloud-based solution is the reduction in IT labor realized from not having to manage on-premises infrastructure. But productivity applications don’t need significant levels of IT support, and most on-premises email solutions for small companies, as in our 50-user example, don’t either.

Please understand that this is not meant to disparage cloud-based solutions. Osterman Research is a strong proponent of the cloud for productivity solutions, CRM, security, archiving and a wide variety of other capabilities, and we are also a strong proponent of Office 365. But when making decisions, it’s important to understand where to rent and where to buy — buying is still not a bad business decision in some cases.

 

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