Business Productivity Tool Analysis Microsoft Office 365 vs Google Apps

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1 Business Productivity Tool Analysis Microsoft Office 365 vs Google Apps Client: Tech Pro Masters (TPM)

2 1.0 Executive Summary Project Background Product Comparison Authentication & Security Microsoft Windows Server SharePoint within Tech Pro Masters User Groups within Tech Pro Masters Windows Potential Product Replacements Microsoft Enterprise Cloud Suite (ECS) Licensing Scenarios Scenario 1: Office 365 E3 for all users Scenario 2: Continuation of Existing Strategy Scenario 3: Microsoft Enterprise Cloud Suite Negotiation Strategy Disclaimer P a g e

3 1.0 Executive Summary Tech Pro Masters (TPM) has engaged Crayon to assess their future Business Productivity Tool (BPT) Platform. We have analyzed TPM s current BPT platform and at first glance, it seems that Google is a more cost-effective alternative than Microsoft. However, some important issues imply that the real TCO-difference between the two alternatives is less than first anticipated: Every user within TPM has access to a central Microsoft SharePoint installation. Based on our interview with the customer it is likely that this installation utilizes enterprise functionality in SharePoint. Hence, the annual Microsoft cost in a continued Google strategy will certainly be significant. Within TPM there are two user groups that desire or require access to the Microsoft BPT platform (Corporate Management and Chinese Users). This needs to be addressed centrally by TPM. We have used Gartner material to assess the functionality differences between the two platforms. All the material we have access to highlight Microsoft as the richest platform on functionality and features. In our analysis, we have looked at three different scenarios: Scenario 1: Migrate to Office 365 E3 for all users This scenario looks into migrating all users to Office 365 E3. If we take the migration project from Bitscape into account this scenario is 6% lower on cost compared to the existing strategy. The discount potential on this scenario is 15 20% yielding a cost difference in favor of scenario 1. Scenario 2: Continuation of existing strategy The continuation of the existing Google strategy is based on the existing agreement of $100 per user per year. In addition, we have incorporated the above bullets regarding SharePoint and the different user groups within TPM. Scenario 3: Microsoft Enterprise Cloud Suite Microsoft s premium cloud offering is called the Enterprise Cloud Suite. This scenario will give TPM maximum flexibility concerning their Microsoft portfolio, and user licensing on Windows client operating system. Without discount, this scenario is 30% higher priced than the existing strategy. However, with an optimal negotiation strategy the discount potential combined with business investment funding can potentially exceed the price difference making this the most cost-effective alternative. Based on standard pricing, our calculations show that Microsoft Enterprise Cloud Suite is more expensive that the continuation of the existing strategy. Based on our expertise and experience 3 P a g e

4 with similar scenarios, optimal negotiations would yield a combination of discounts and deployment funding that potentially could offset this completely. Our advice to TPM concerning this matter is to start negotiations with Microsoft concerning scenario 3 to explore this option. Crayon will make available the best team available for TPM, for support during this process. The team will assist TPM in negotiating scenario 3 to a level where this potentially can be the most cost-effective alternative for TPM. Conclusion: TPM should enter into negotiations with Microsoft regarding scenario 3, with a fallback strategy to scenario 1. 4 P a g e

5 2.0 Project Background Tech Pro Masters (TPM) is currently analyzing their existing strategy for business productivity tool (BPT). Three years ago, TPM migrated their BPT platform from Microsoft Office Productivity Suite to Google Apps. The main motivation for the migration was cost reduction as well as standardizing the BPT platform across the company. TPM has since the migration in 2012, experienced some issues concerning their chosen strategy. These issues are: Corporate senior management prefer using the Microsoft Office Productivity Suite There are challenges with the Chinese users utilizing the full functionality within Google Apps. Crayon has been engaged to analyze the potential total cost of ownership concerning the following three strategies: Scenario 1: Scenario 2: Scenario 3: Migrate to Office 365 E3 for all users Continuation of existing strategy Microsoft Enterprise Cloud Suite Crayon has based its analysis on interviewing the customer onsite in Los Angeles, California October 14, Additional information has been provided through and phone conversations. 3.0 Product Comparison As mentioned above, TPM is currently considering migrating from their Google BPT platform to Microsoft Office 365 E3. Below we will provide a comparison between the two BPT Platforms and highlight Microsoft s offering. When comparing Google Apps to Microsoft Office 365 we used a document published by Gartner entitled How to Evaluate Google Apps for Work Versus Microsoft Office 365, published in January 2015 by the analysts Jeffrey Mann and Achint Aggarwal. Gartner starts by presenting their key findings of which we highlight the following two: There has been substantial expansion in the number of devices people use to access office systems, which increases the demand for cloud-based office systems. Both Google and Microsoft offer stable, secure and feature-rich collaboration platforms that are suitable for most circumstances. In their introduction, Gartner highlights that Microsoft has been traditionally dominant as far as on-premises office systems are concerned. However, Google is competing effectively against Microsoft for customers that desires a pure cloud-based BPT platform. Both Microsoft and Google have their own strengths and limitations, and the preferred vendor will depend on an organization's working style and priorities 5 P a g e

6 Personal productivity tools: Google has an edge if an organization's priority is simplicity. However, those looking for richer functionality tend to lean toward Microsoft. Certain features present in Microsoft Word and PowerPoint are still missing in their Google counterparts. Document formatting: Document formats are a particular concern. The dominance of Office means that Microsoft largely defines the format standard for documents, spreadsheets and presentations. Google has been improving its support for Microsoft formats in its tools, but some level of incompatibility remains, especially with macros and complex documents and spreadsheets. If 100% compatibility with Office formats is a requirement, Microsoft has the advantage. Enterprise content management: While Google Drive offers good file management and sharing capabilities, and Google Sites can deliver straightforward intranets very quickly, Microsoft SharePoint has far more enterprise content management features. Social technologies: Google+, the social component of Google Apps for Work, offers "good enough" capabilities but is still offered without dedicated support or SLAs and without specific access controls that some organizations deem essential (for example, the ability to exclude external participants). Microsoft has shifted its social efforts from SharePoint to its online offerings Yammer and Office 365 and is working to integrate them more deeply. Video/Web conferencing: Google Hangouts offers easy-to-use conferencing capabilities. It does not offer some specific functionality when compared to Microsoft Skype for Business, which is a more specialized tool built for business communications. Portal, integration and application development: In most cases, this area is not a dominant driver when choosing between the two vendors, but it can be more important in particular situations. Office 365's different SharePoint components have extensive portal and development capabilities (fewer are available from the on-premises version). Google provides extensive APIs to integrate its products with other applications and apps built on the Google App Engine. The capabilities and development models supported by the two products are very different, however. Another potential disadvantage for Google is that, even though most employees might not need a conventional office suite for their everyday work, arrangements will need to be made for dealing with the occasional complex document sent from a colleague or an external user that cannot be converted or even viewed correctly. In addition, we see a market trend that a significant amount of user groups within different companies prefers Microsoft from a personal point of view, since the familiarity with this platform is significantly higher than with Google. Office 365 is built for your business and includes the new Office 2016, apps as well as tools to help you work better together and get more done, anytime, anywhere and from any device. The Microsoft Productivity Tool is all about collaboration and productivity. Features of Office 365 Enterprise E3 Office 365 E3 includes full version of Office Pro Plus, and includes also a wide range of integrated collaboration services. With Office 365 E3 you receive the full version of the Office 2016 apps which all users can fully install on up to 5 devices as well as future updates during your subscription. You also get guaranteed 99.9% uptime, financially backed service level agreement, IT-level web support and 24/7 phone support for critical issues. Data security and privacy. The admin portal provides IT detailed configuration options for your services, either from an online 6 P a g e

7 portal or through automated management with PowerShell commands. With Active Directory integration, you can manage user credentials and permissions, single sign-on and synchronization. Regarding the Online Services included in Office 365 E3 we ll highlight , online conferencing, instant messaging and skype connectivity as well as file storage. and Calendars with advanced and document and access control Business-class through the well-known Outlook-GUI experience that you can access from your desktop or from a web browser using Outlook Web App, with 50 GB mailbox per user and attachments up to 150 MB. Included also are archiving and legal hold capabilities, unlimited storage and compliance needs and data loss prevention policies for additional compliance enforcement in . You also get Rights Management Services which enables you to restrict access to documents and to specific people and to prevent anyone else from viewing or editing them, even if they are sent outside the organization. Online conferencing and Instant messaging and Skype connectivity with Skype for Business. Host online meetings with audio and video using one-click screen sharing and HD video conferencing. Connect with other Skype for Business users via instant message, voice calls, and video calls, and let people know your availability with your online status. Share presence, IM, and audio calling with Skype users. Difference between Skype and Skype for Business Skype is great for home and work and lets you connect with millions of people to grow your business. If you want to use Skype at work, you have two options either use the same Skype that you use at home or use Skype for Business. The Skype that you use at home is great for smaller businesses of up to 20 employees. It is free to use, unless you want to buy credit to make calls to landlines and mobiles. Skype for Business lets you add up to 250 people to online meetings, gives you enterprise-grade security, allows you to manage employee accounts, and is integrated into your Office apps. Simple file storage and sharing Get OneDrive for Business gives each user 1 TB of personal cloud storage that can be accessed from anywhere and that synchronizes with their PC or Mac for offline access. Easily share documents with others inside and outside your organization and control who can see and edit each file. 7 P a g e

8 4.0 Authentication & Security Office 365 environment has built in security and privacy controls. The datacenters providing this service are regularly audited by third parties and are certified for ISO ISO Safe Harbor SSAE16 SOC1 Type II SOC2 Type II FISMA The Office 365 environment uses defense-in-depth approach to provide physical, logical, and data layer levels of security. It features and operational best practices for not only data protection and privacy but also highlights Microsoft s Software Development Life Cycle with security and privacy as part of software design. In addition, Office 365 gives you enterprise-grade, user and admin controls to further secure your environment. Office 365 offers various mechanisms for authentication and user management. The easiest option to implement is using standard Office 365 username / password. Out of the box, office 365 provides this option; each user is configured in the Admin portal and users have to sign in and authenticate with single factor password. Administrator needs to create username / password and manage it for the entire lifecycle of the account and delete the account if it is no longer needed. Users have to maintain office 365 passwords dependent on company s password policies. This option is ideal for companies with small user population (less than 75) and if company does not have existing directory services including Active Directory. Typically, companies already have on premises directory services or Active Directory, which can be leveraged for Office 365 authentication using directory synchronization. With directory synchronization, users do not have to remember new information for each environment, and administrator does not have to create or update accounts twice. Office 365 can also be configured for Single Sign on (SSO) so users can seamlessly leverage Office 365 products and services. With SSO, users can log on to Office 365 with their on-premises credentials; Office 365 is configured to trust the on-premises environment for user authentication. Other option is to have hybrid environment, and have directory services in cloud synchronized with on premise directory services. Active Directory on Azure can be utilized for this configuration. This option is really worth considering for mobile or off-premises users. Off-premises and mobile users are authenticated from Cloud based directory services and do not need access to on premise directory services. This option also provides high availability. Two-factor authentication or two-step verification processes can be implemented with abovementioned options to increase security. Spam filtering and virus protection are automatically enabled on all inbound and outbound messages by Microsoft Exchange Online Protection (EOP), the anti-spam and anti-malware service included with Office 365. The EOP service applies multi-layered filters and scanning engines to help protect your organization from -borne threats. 8 P a g e

9 Although no admin setup or management is required for Office 365 Small Business, you can customize anti-spam settings for your organization from Admin Portal. 5.0 Microsoft Windows Server Currently TPM runs Windows Server 2008 R2 Standard in their Server Infrastructure. Based on the Microsoft Product Support Lifecycle the Mainstream Support End Date for Microsoft Windows Server 2008 R2 was January, 13th Based on the Microsoft Licensing Statement we have received, TPM has purchased some licenses of Windows Server with Software Assurance (SA) for both the Server and the CAL, thus having the rights to the most current version of Windows Server for these licenses. The SA Coverage end date for these licenses is January, 31 st TPM has the below rights to the latest version of Windows Server (2012 R2). License Type # SA Expiration Windows Server Standard 2 processor License Windows Server Datacenter 2 processor License Windows Server User Client Access License License Type # SA Expiration Windows Server Standard 2012 R2 License 2 SA not included Our understanding from our conversation with TPM, is that Windows Remote Desktop Services (RDS) is used throughout the company, if this is the case, AOM is non-compliant with regard to their Microsoft RDS usage. Under Microsoft licensing rules RDS requires a CAL license for every user that can access the RDS server. These licenses need to be on the same version, or a higher version, of the Windows Server License. It is important to emphasize that a consequence of upgrading the windows server environment, might be to upgrade the RDS-CALs. TPM will need to validate which edition best suits their needs. As there is feature parity between Windows Server 2012 R2 Standard and Datacenter editions, your decision will be based on your virtualization strategy; virtualization rights are the only differentiator between editions. If your strategy calls for a highly-virtualized environment, Datacenter edition will provide you with optimum flexibility because it allows for unlimited virtualization. This edition allows you the elasticity to add and move virtual OSEs across Datacenter licensed servers without needing to track the virtual OSE count on that server. If you do not plan on a highly virtualized environment, Standard edition is the right product for your needs. To access this server software legally, a Client Access License (CAL) is required. A CAL is not a software product; it is a license that gives a user the right to access the services of the server. The licensed user or device can access any licensed Windows Server within your organization. Each user or device accessing Windows Server needs to have a CAL and the CAL has to be the same version, or a higher version, of the Server License. For example, if TPM upgrades to Windows Server 2012 R2 then all uses and or devices will need a Windows Server 2012 CAL. The same applies to the RDS CALs, these will also need to be the 2012 version. TPM already has the rights 9 P a g e

10 to the latest version of the Windows Server CAL for 700 users. Regarding RDS, no current licenses were found on the MLS. 5.0 SharePoint within Tech Pro Masters Even though TPM has standardized on Google as their preferred BPT platform, Microsoft SharePoint is heavily used throughout the company. The existing SharePoint installation is according to TPM personnel highly integrated with other data sources within the organization. Based on the information we have received; it is likely to believe that TPM uses the SharePoint installation in a way that requires SharePoint Enterprise CAL for all their users. Based on the Microsoft Licensing Statement we have received, TPM has purchased the following licenses for SharePoint CALs: License Type # SA Expiration SharePoint Standard CAL SharePoint Enterprise CAL From the table above the majority of the licenses owned by TPM are currently on standard. This suggest that TPM currently is not compliant on their SharePoint environment. As illustrated by the table above, TPM currently has SA coverage for their SharePoint CAL, which make them eligible for current version. However, Microsoft has split the SharePoint licensing into two different components depending on the functionality made available for the users. TPM needs to acquire SharePoint Enterprise CAL for all users to be compliant. Office 365 E3 covers both standard and enterprise functionality for SharePoint. In addition, it covers both SharePoint on premise and in the cloud. Hence, a migration to Office 365 E3 will solve this potential compliance issue for TPM. 6.0 User Groups within Tech Pro Masters A significant amount of users within TPM has the same access to different business productivity tools. Some important user groups should be addressed concerning the selection of future BPT strategy. Management Users Based on our conversation with TPM, Google is not the preferred tool for corporate senior management. Corporate senior management within the company prefer utilizing the Microsoft productivity suite. Chinese Users Like many other companies, TPM has experienced several challenges with Google Apps for the part of their workforce that is located in China both permanently and occasionally. This is a well- 10 P a g e

11 known challenge in the market place and there are workarounds. TPM has investigated the opportunity to set up a separate Microsoft-based environment for the Chinese users, but that project was put on hold until further notice. The two user groups above show that in its existing setup, TPM is experiencing some challenges in keeping one common platform for their BPT platform. To maintain and develop a two or three BPT platforms is both a costly and ineffective way of supporting the business. In TPM s case the possible solutions for these problems are: A. Migrate all users within the company to Microsoft Office 365 B. Enforce Google platform on senior management C. Establish a workaround for Chinese users such as VPN or similar 7.0 Windows 10 Cisco VPN and Windows 10 It is fairly common and documented that there are few technical challenges with Cisco VPN client and Windows 10. The most common error message is Error 27850: unable to manage network component. Operating system corruption may be preventing installation. This issue can be fixed by using latest cisco client, changing registry settings and updating VPN server software. First step is to increase maximum number of network filter drivers in Windows 64-bit operating system to 14 from default of 8 by changing the following registry Key HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Network\MaxNumFilters Then update the dne (ftp://files.citrix.com/dneupdate64.msi) and installed the CICSO Client successfully. After this procedure, you should be able to install latest Cisco VPN software. Windows 10 Update TPM has started to investigate different update options to Windows 10. In this section we will describe the different update options that are available to TPM after a migration to Windows 10. Windows 10 uses a new approach to providing updates to users. Traditionally Microsoft would release a version of Windows and then provide updates such as security and bug fixes, but not add any major, new functionality. With Windows 10, Microsoft is giving users a choice in how they receive new features with the introduction of current branch (CB), Current Branch for Business (CBB), Long Term Servicing Branch (LTSB) and Windows Insider Preview Branch (WIPB). Current Branch (CB) Updates will deliver through Windows Update as they are released. Features and Fixes are automatically applied and there is no option to delay or customize the updates. Current Branch will typically ne used by home users and small businesses. Current Branch for Business (CBB) CBB takes the speed of update deliver of Current Branch, but gives companies the ability to customize when security updates, fixes, and features are applied, as well as which ones. However, they cannot be deferred forever. Eventually, the updates will be required. The updates as part of CBB will be delivered to WSUS servers and can be managed using 11 P a g e

12 the forthcoming Windows Update for Business and compatible patching mechanisms like System Center Configuration Manager. Long Term Servicing Branch (LTSB) LTSB will only be available for volume licensing customers running Windows 10 Enterprise. The LTSB is similar to how versions used to be delivered on previous versions of Windows, with a new one delivered every couple of years and in between each new version Microsoft will provide security updates, bug fixes and so on. LTSB is intended for mission critical systems, with the latest security and critical updates, while minimizing change by not delivering new features for the duration of mainstream (five years) and extended support (five years). On Long Term Servicing branches, customers will have the flexibility to deliver security updates and fixes via Windows Server Update Services (WSUS) using existing management solutions such as System Center Configuration Manager or to receive these updates automatically via Windows Update. Windows Insider Preview Branch (WIPB) - The Windows Insider program allows users to sign up for early builds of the Windows operating system previously only accessible to developers 8.0 Potential Product Replacements Microsoft is using product bundling and suites as a well-known strategy to increase the customer s adoption of their products. One of the latest licensing bundles that Microsoft released together with Office 365 is the Bridge CAL. As the name implies the Bridge CAL are intended to help customer bridge the licensing gap between the different Office 365 bundles and the existing in premise licensing bundles. The following illustration shows the purpose of the Bridge CAL in an Office 365 E3 scenario: Workload Product Core CAL suite CoreCAL Bridge E3 plan Office Office ProPlus E3 Plan Server OS/AD Windows Server CAL Core CAL Bridge Exchange Standard CAL Exchange Enterprise CAL with Services Collaboration SharePoint Standard CAL SharePoint Enterprise CAL Skype for Business Standard CAL E3 Plan Skype for Business Enterprise CAL Online Archiving for Exchange Server Online Exchange Online Protection & Data Loss Protection E3 Plan Management Security and Configuration Manager CML Endpoint Protection CML Core CAL Bridge The Bridge CAL consist of important licensing components, and these are the following: 12 P a g e

13 I. Windows CAL, which is required i.a. authentication against Active Directory. This licensing component is required for TPM with today s infrastructure. II. III. Configuration Manager CML. This is the licensing component required to run Microsoft System Center Configuration Manager, which is Microsoft s system administration tool. This product is currently not utilized by TPM, hence the licensing component is not required per se, but TPM should investigate substituting their current tool if the Bridge CAL option is pursued. N.B. Separate server management licenses is required if TPM decides to manage their server infrastructure through Microsoft System Center Configuration Manager (SCCM). Endpoint Protection CML. This is Microsoft s enterprise security solution containing full antivirus and anti-malware capabilities on the clients. TPM is currently using Kaspersky as their antivirus solution. This solution has a licensing cost of $ per year. If TPM choose to pursue the Bridge CAL alternative, they should perform a thorough analysis of replacing Kaspersky with Microsoft Endpoint Protection from a cost optimization perspective. 9.0 Microsoft Enterprise Cloud Suite (ECS) Microsoft s latest cloud offering for the enterprise market is called the Enterprise Cloud Suite (ECS). ECS is a user-based licensing bundle that offers the customer a bundle of Office 365 E3, Enterprise Mobility Suite (EMS) and Windows Client Operating System per user. This can be very beneficial for TPM since the number of laptops are higher than the number of users. Naturally, this depends on the result of the negotiation phase and total cost concerning this alternative. A complete illustration of ECS can be found below: Microsoft Enterprise Cloud Suite (ECS) Office 365 EMS Office 365 Pro Plus Exchange Online Lync Online SharePoint Online Yammer System Center CM Windows Server CAL Azure Rights Management Windows Intune Azure AD Premium WINDOWS SA PER USER 13 P a g e

14 10.0 Licensing Scenarios Based on our discussion with TPM we have developed the following Scenarios: SCENA RI O 1: OFFICE 365 E3 FOR ALL U SERS If TPM decides to migrate to a cloud-based platform, Office 365 E3 is the right cloud plan for TPM. Given the fact that Office 365 is a subscription license in its nature, we have proposed an Enterprise Agreement Subscription (EAS) for this scenario. The cost concerning this alternative is as follows over the coming three-year period: Scenario 1: Office 365 and bridge CAL for all Users Product Price per Year # Year 1 Year 2 Year 3 Total Office 365 E3 $ 232, $ $ $ $ Bridge CAL $ 23, $ $ $ $ Windows Upgrade $ 56, $ $ $ $ Potential Replacement of Kaspersky $ ,00 1 $ $ $ $ Migration Project $ $ Total $ $ $ $ SCENA RI O 2: CONTINUA TION OF EXI STING ST RAT EGY Even though existing strategy is to utilize Google it is likely to believe that TPM will not be able to remove future need for Microsoft licenses that ties into the BPT platform. Based on our conversation with TPM, we see the following: I. Windows CAL SA needs to be renewed for 600 users. II. SharePoint Standard CAL SA needs to be renewed for 560 users. (600 users except the management users and the Chinese users) III. SharePoint Enterprise CAL L/SA need to be purchased. (600 users except the management users and the Chinese users) IV. 40 Office 365 E3 for the Management users and for the Chinese users. V. Windows Upgrade for 700 devices. This gives the following: Scenario 2: Continuation of Existing Strategy Product Price per Year # Year 1 Year 2 Year 3 Total Existing Google Agreement $ 100, $ $ $ $ Renewal Windows CAL $ 7, $ $ $ $ Renewal Sharepoint Standard CAL $ 24, $ $ $ $ Purchase Sharepoint Enterprise CAL $ 51, $ $ $ $ Office 365 E3 for Management and Chinese Users $ 204,00 40 $ $ $ $ Windows Enterprise $ 104, $ $ $ $ Total $ $ $ $ P a g e

15 SCENA RI O 3: MICR OSOFT ENTERP RI SE CLOUD SUITE Microsoft s most comprehensive cloud offering is the Microsoft Enterprise Cloud Suite (ECS). We have chosen to incorporate this alternative as Microsoft field personnel are measured heavily on their success in deploying the ECS in the market place. The cost concerning the ECS is as follows: Scenario 3: Microsoft Enterprise Cloud Suite Product Price per Year # Year 1 Year 2 Year 3 Total Microsoft Enterprise Cloud Suite $ 380, $ $ $ $ Migration Project $ $ Total $ $ $ $ All prices above are based on A-level pricing without any discount, which is the price level TPM qualifies for. Below is a table that shows 3-year TCO based on different discount levels. The highlighted levels are potential discounts for the different scenarios. Potential Discount Levels Scenario 1 Scenario 2 Scenario 3 0 % $ $ $ % $ $ $ % $ $ $ % $ $ $ % $ $ $ % $ $ $ % $ $ $ % $ $ $ In our opinion, it is possible to receive significant discounts for some of the proposed scenarios. This requires that the negotiations be aligned in a correct and optimal fashion. 15 P a g e

16 11.0 Negotiation Strategy TPM is very well positioned to achieve a good negotiation result if they choose to pursue one of the Microsoft strategies above. Microsoft field personnel are highly incentivized on so-called Google WinBacks. The overall negotiation process with Microsoft can be split into three different phases. Initial Negotiation Phase Intermediate Negotiation Phase Final Negotiation Phase High focus on continuing the Google-strategy Low Microsoft-interest Low managementinvolvement from TPM Low focus on discount/pricing High focus on business-value Microsoft Minimum- Alternative Medium Microsoft-interest Medium managementinvolvement from TPM High focus on discount/pricing High focus on business-value Microsoft ECS-Alternative High Microsoft-interest High managementinvolvement from TPM Only focus on discount/pricing In order for us to advice TPM on where to concentrate their negotiation effort we would need to know what is the underlying motivation for a possible migration to the Microsoft BPT platform. We have described to possible scenarios below: The Migration represents a strategic shift in the relationship between TPM and Microsoft. The scenario with the highest level of flexibility and predictability is without a doubt Scenario 3 above. An investment in ECS from TPM would be considered as a major showcase for Microsoft, and even though the base pricing in this alternative is significantly higher than for the other alternatives, it is our belief that the potential discount level in this scenario will offset this price difference. In order for TPM to achieve the level of discount necessary to offset the initial price difference (approximately 25%), it is crucial that TPM aligns the upcoming negotiations in a way that minimizes TPM s TCO for the overall Microsoft portfolio. In order for TPM to achieve this, it is important that TPM balance the negotiations in a way that gives Microsoft just enough information for Microsoft to build a good business case internally. TPM will migrate to Office 365 E3, but this represent no shift in TPM s Microsoft strategy. If TPM choose to migrate to Office 365 E3, the initial and intermediate negotiation phases can be completed in a relatively efficient manner. In our experience, a Google Winback to Office 365 E3 can relatively easy achieve a discount of 15-20%. To achieve this, it can be beneficial for TPM to focus harder on discount levels immediately compared to the scenario above. 16 P a g e

17 For TPM to achieve the best possible result, Crayon is committed to make the best team available for TPM throughout the process. The team will consist of persons with different skillset, ranging from detailed licensing skills to strategic negotiation competence. Above, Crayon has described what discount is necessary to offset the initial price difference between the two alternatives. In addition, TPM should be able to get business investment funding to offset the cost of the migration project Disclaimer This project is solely based on customer interviews. Crayon has not performed any inventory of customer premises hence; the analysis relies solely on input provided by the customer. Crayon standard framework for engagements like this always starts with a complete Microsoft baseline to assess the customer s overall compliance situation on Microsoft. This enables to mitigate any risk as part of the upcoming agreement. For TPM the analysis only assesses the business productivity suite, and does not take into considerations any of the datacenter components, as this was the request from the customer during our initial interview. Crayon is not able to verify whether the proposed agreement structures will make the customer compliant on their Microsoft estate as only parts of the infrastructure has been assessed. 17 P a g e

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