Software as a service (SaaS) and collaboration applications have seen tremendous growth recently due to the rapid shift to remote work. So it’s no surprise that Microsoft 365 has grown to over 300 million commercial users and Microsoft Teams has doubled its user base in just over a year.
In fact, many of you have probably doubled down on your Microsoft 365 usage and added many users to your subscription. Like many other SaaS products, Microsoft 365 subscriptions are based on per user pricing. This makes sense for you as the customer as you can budget your productivity and collaboration spending based on the actual size of your organization. If you grow, so does your M365 bill, but if you cut back, you can eventually trim back on your spend too. This seems like a simple and easy way to pay for M365, so why did we choose NOT to go with user-based pricing when we recently added support for M365 backups to our DataProtect delivered as a Service? Here are the reasons why…
The reality is, you will likely end up paying more with user-based pricing for backups. Why? Because like T-shirts, office and productivity data is never one size fits all. You have a few video users that create and store huge amounts of data in their M365 accounts, while your accounting team is using very little space with much smaller Excel files — so why should you be paying the same amount for users that are using vastly different amounts of capacity? Before we decided on the pricing model to roll out for M365 for our backup as a service (BaaS) we decided to look at how much data our customers were ACTUALLY backing up from M365 to our self-managed backup product. It turns out not that much at all, roughly 6GB/user when you average this across the hundreds of customers, and a million plus user accounts using Cohesity to protect M365. We applied our capacity-based pricing and compared it to other BaaS products in the market that charge per user and found customers would typically save 50% with Cohesity. That’s huge!
Still not sure if capacity-based pricing is better than user-based pricing? Let’s look at few other considerations:
Be sure to routinely take the time to determine how many active users you actually have and how many EXTRA users you are licensing. Without tracking for growth and keeping a buffer it’s easy to become wasteful and you’ll likely repeat the same pattern with backup that’s based on user pricing. With capacity-based pricing you’re paying for the capacity across all users, and again based on our data, it’s probably lower than you think.
You might think you have unlimited storage per user, but look at the fine print — most M365 backup products will still charge you overage once you go over a certain limit for each user. Just like those mobile data plans or all-you-can-eat buffets that charge you more or cut you off if you consume too much. With capacity-based pricing, there are no limits; you only pay for the capacity you need across all your users.
With user-based pricing you need to upgrade or downgrade (if that’s even allowed) your subscription level. You’re either dealing with hassles or waste. With capacity-based pricing if you need more capacity — it’s there for you. If you need less, then use less. If you’re committed to an amount, don’t worry, extra capacity that’s not used for M365 can be used for other data that needs to be backed up like your VMs, databases, or other cloud sources.
With user-based pricing, you are pretty much in a use it or lose it scenario. Why? Because your user licenses can only be used with M365 backups and you can’t use them for anything else. With capacity-based pricing your subscription is shared across all backup data sources like VMs, databases, files, or other cloud data, so if one data source decreases, you can make it up with another data source that’s growing.
Isn’t user-based pricing simple? Just count the users you want to protect and estimate the costs? Maybe. But have you considered the complexity of protecting a subset of total users just to realize that more users need to be protected in order to protect the SharePoint Online Sites to which the unprotected users have access. Further, will there not be added complexity of sizing and budgeting backup beyond M365 for your entire environment from VMs, databases, files, cloud, and other data sources? You’ll likely be mixing separate products and separate pricing models (per user, per VM, by capacity) which can get complex very quickly. With a comprehensive BaaS solution that provides capacity-based pricing it’s easier to buy one product, with one pricing model, and have the capacity shared across backups for all your data sources.
“I already know how many users we have, how do I find out how much M365 data I have?”, you may ask. Don’t worry, it is easy to find out. Why not take a few minutes and save yourself a lot in M365 backup costs. For example, here’s how to find out how much data you are using in M365 Exchange Online and OneDrive. It’s just as easy to get started with backups with Cohesity DataProtect delivered as a Service — just Sign-Up, Connect, and Protect. You can sign up for a risk-free 30-day free trial. It’s easy to connect and register your M365 data sources, and DataProtect will automatically detect your data that needs to be backed up and have it protected in minutes. And while you’re at it you can test out backups for other data sources like VMs, databases, and files too.
Try Cohesity DataProtect delivered as a Service today and see how capacity based pricing can be advantageous for your M365 backups.