By Josh Morganthall, GreenPages' Senior Solutions Architect, Microsoft Cloud
Over the past few years, companies have embraced the cloud-only workplace model: swapping out their on-premise software and servers for cloud-only “software as a service” (SaaS) solutions. Read about the pros and cons of going SaaS and how companies weigh all the options before deciding.
An IT executive said that power outages from the recent winter weather resulted in his business losing an entire day for all employees. But this company isn't a factory dependent on electricity to manufacture tons of widgets; it's an office where employees do all their very expensive and hourly-billed work on computers. "It didn't matter that my employees' laptops all have batteries," the frustrated VP of IT said. "Our internet was completely down, so none of them could get online to get to their documents because it's all in the cloud."
This real-world scenario should be the top consideration if planning to switch to a cloud-only workplace. For numerous reasons over the past few years, companies have embraced the cloud-only workplace model: swapping out their on-premise software and servers for cloud-only “software as a service” (SaaS) solutions. Typically, you see a business swapping out their aging Microsoft Office, Exchange email servers, and Dynamics GP/SL licenses for cheaper cloud-only SaaS competitors such as Google Workspace and Salesforce. The advantages are obvious: all your users need is an internet-connected device running any operating system (e.g., Microsoft Windows PCs, Apple iOS phones/tablets, and even Linux devices) and a modern web browser. All work is done online so there's no software to install. Every employee document is available from anywhere thanks to the cloud, so collaboration is simplified. From an IT support standpoint, there are no on-prem servers needed for storing corporate email and other data, so your company doesn't need as many onsite IT employees. It's also no secret that SaaS solutions are long-term revenue drivers for technology companies, which means SaaS solutions are competitively priced compared to legacy on-prem software licenses. So, cost-conscious IT decision makers naturally gravitate to that internet-bound model.
But take away that internet lifeline—either due to a power outage, an accidental cutting of the lines, or traveling outside the service area—and the cloud-only SaaS model breaks down quickly. While it's true that Google Workspace has made offline document editing easier across all platforms since the global health crisis, it's not a simple process. For example, offline access to Google Workspace documents requires IT to configure employee devices for offline access then train those employees on how to use offline Google documents. Salesforce users have offline access through mobile apps (e.g., iPhones, iPads, and Android devices) only. It's tough for a VP of IT to justify to the CFO how the company's saving money on cloud-only SaaS solutions when pulling limited human capital off a revenue-generating strategic IT project to train everyone how to edit an offline spreadsheet.
However, these common offline usage scenarios are why Microsoft 365 and other cloud-native SaaS provide companies with more flexibility—resulting in meaningful employee productivity gains when compared to cloud-only SaaS.
The advantage of cloud-native vs. cloud-only SaaS
Microsoft 365 is a cloud-native SaaS solution. I often point to the cloud-native benefits of Microsoft 365 Business and Enterprise plans such as integrated artificial intelligence, cybersecurity, and other productivity-enhancing features found in the familiar apps such as Microsoft Word, Excel, Outlook, and more. These cloud-native features are made possible by the cloud, but those Microsoft 365 apps are always accessible on employee devices even if the internet is down. Pair these apps with the intelligent cloud synchronization capabilities native to Microsoft OneDrive, and you can quickly see how cloud-native solutions provide immense value. Using OneDrive and SharePoint, employee documents can be stored in cloud-based folders and shared for easy collaboration with authorized users. OneDrive syncs with SharePoint and Microsoft Teams, and documents are organized in folder structures that look exactly like File Explorer in Windows (or Finder on Apple macOS). When the internet goes down, local copies of those files are still available to users—and are automatically synchronized with the cloud once internet access is restored.
The key advantage for cloud-native SaaS solutions is the internet is not required to work. Yes, the cloud-native features in Microsoft 365 apps such as visualizations in Excel, advanced grammar checks in Word, and PowerPoint Designer won't work if the internet is down, but every Excel spreadsheet, Word document, and PowerPoint presentation is still editable via the offline apps. It's this offline app advantage that should be a crucial decision point for most IT decision makers since the lack of internet connectivity does not sideline all your company's A players when using Microsoft 365.
Calculating the hidden cost of a cloud-only workplace
However, since cost is typically the decision point carrying the most weight with SMBs, the slightly less expensive Google Workspace Business Standard appears to be a better deal than Microsoft 365 Business Standard. The cloud-only Google Workspace plan costs an even $12 per user/per month while cloud-native Microsoft 365 Business Standard plan costs $12.50 per user/per month. Most business owners with 200 employees would already have done the calculation that choosing Microsoft 365 over Google Workspace would cost them an added $1,200 per year.
But think about the real-world scenario of a Google Workspace user experiencing a power outage: the company loses an eight-hour day's worth of productivity (and revenue) without internet connectivity. If your company had 200 employees and all of them were physically unable to work for a standard eight-hour day due to Workspace and a lack of internet, then ask yourself:
- Would your business take only a $1,200 hit and is that acceptable to your business?
- Are you comfortable with "saving" that 50 cents per month/per employee in the wake of that potential revenue/productivity hit?
- What added features would Microsoft 365 Business Standard need to have other than just offline apps to warrant spending an additional 50 cents per month?
If you're looking for an answer to the last question, then consider that Microsoft 365 Business Standard also includes Microsoft Teams, Microsoft SharePoint, Microsoft Visio, Microsoft Forms, and Microsoft Bookings. These features in Microsoft 365 Business Standard have no analogues in the $12 per month Google Workspace plan. When you look at the numbers, these features represent a significant enough value to cover the additional 50 cents per user price for Microsoft 365.
Another strategic consideration for IT decision makers is bandwidth cost. Organizations that have been in business for fifteen to twenty years likely still have on-prem servers and private datacenters. When businesses migrate those resources to the cloud, the need for virtual private networking (VPN) and other specialized connectivity is diminished. Branch office locations can swap expensive private links out with SD-WAN over public broadband, significantly decreasing long-term bandwidth costs. Microsoft 365 cloud-native resources can be securely accessed by hybrid workforces with remote employees on commodity internet access without the need for corporate IT to provision and manage VPNs.
Consider your risk and ROI before choosing a cloud-only solution
For most organizations, GreenPages recommends you consider your business as a cloud-native rather than a cloud-only workplace. By strategically moving certain IT and business processes into the cloud, your business can cut costs and be more efficient. In our experience, this cloud-native model usually results in the maximum ROI with the minimum risk to your organization. Our expert consultants can help your organization calculate your risk tolerance for the cloud and determine the cloud-first productivity options to match your budget and desired business outcomes.