Microsoft 365: The Road to E5

Microsoft 365 E5. I have heard it colloquially referred to as the ‘All In’ SKU,  the ‘Nirvana’ SKU – but I have never heard it referred to as an easy SKU to sell or deploy in full; nor one that has generated any great deal of demand when compared to Business and E3. Objections that I have personally encountered since it was released include it’s too difficult to articulate, that it contains too many workloads to deploy in a reasonable timeframe, that customers aren’t looking to engage in that degree of change, that it contains applications that they don’t want or need due to existing solutions (I.e. Hosted PBX) and that it’s too much of a jump in price from Microsoft 365 E3.

In fact, a criticism that has been levelled at E5 repeatedly from several quarters is that customers wanted features such as Windows Defender ATP (WDATP) yet these were not available without having to go all in on the SKU. In the case of WDATP, the result in the real world was that it often pushed customers and partners to third-party point solutions such as Sophos or Symantec because there was no intention on the part of the customer to move their existing voice and analytics solutions in order to simply get integrated endpoint security.

So, Microsoft’s news on the new Microsoft step up SKU’s is very good news.

If you haven’t already heard it by now, Microsoft announced two step up SKU’s in a blog post by Ron Markezich (here) on January 2nd 2019. These SKU’s are available from February.

  • Identity & Threat Protection – Microsoft Threat Protection (Azure Advanced Threat Protection (ATP), Windows Defender ATP, and Office 365 ATP including Threat Intelligence), as well as Microsoft Cloud App Security and Azure Active Directory. This offer will be available for $12 per user per month.
  • Information Protection & Compliance – This new package combines Office 365 Advanced Compliance and Azure Information Protection. This offer will be available for $10 per user per month.

You can get an in-depth look at the SKU’s in this PPT by Pascal Walschots here.

But why exactly is this good news? There will be those who believe that the introduction of more SKU’s will add another layer of complexity, another round of updating assets and collateral, and another round of having to re-educate and pitch the SKU’s and how they fit into the overall Microsoft 365 offer.

I hold up my hands – these are all valid points.

However, consider –

1/ Microsoft are embracing the idea of stepping up

Microsoft is embracing feedback from Partners and Customers, recognising that it’s rarer for such a level of digital transformation to take place in a big bang ‘event’ occurring within a very short space of time. Yes, it happens. Yes, there are many organisations who will see the end state of E5 and all the benefits it brings in terms of consolidation, lower TCO from moving away from point solutions and a unified ecosystem. However, from personal experience, it is more common for transformation to occur over a longer period in a phased manner which allows focus on the successful adoption and embedding of a few workloads before moving onto the next. Consider all the things that you may have to do in order to successfully adopt Microsoft E5 in a scenario where the client has several point solutions and isn’t using Office 365. This includes a mail migration to Exchange, file migration to SharePoint and OneDrive, Voice migration to Teams, an Office upgrade, a Windows upgrade including profile migration and joining to Azure AD, an implementation of device and application management through Intune, the rollout of collaboration applications such as Stream and Forms, of workflow automation via Flow. It would involve the application of advanced security features such as MFA, Conditional Access, App Protection Policies, DLP, AIP, the enforcement of Bitlocker, Device and Credential Guard. It would potentially involve the development of PowerApps or custom reporting through the Graph. Even moving between Microsoft 365 E3 and E5 its still a relatively big jump when you consider lighting up all the advanced security and compliance features, migrating Voice and implementing advanced analytics. These could all be self- contained workload projects in themselves.

By introducing the step up from Microsoft 365 E3 to E5, it will allow a more focused and controlled progression to E5 through the step-up SKU’s in the same way that many organisations progress from Standalone SKU’s to Office 365, or up the Office 365 SKU’s from E1 to E5, or to Microsoft 365 itself through the Office 365 and Intune/EMS SKU’s.

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2./Customers and Partners will get what they want

The new step up SKU’s are focused on advanced Security and Compliance workloads. The other aspects of Microsoft 365 E5 – Voice (Phone System/Conferencing) and Analytics (PowerBI) can already be purchased as standalone SKU’s and bolted onto any other Microsoft 365 SKU. This means that customers now have access to the advanced security or compliance features such as WDATP or AC without having to commit to Phone System or PowerBI. Partners should also have less of a need to position or push third party solutions such as Sophos or Symantec in order to retain the customers business.

As Microsoft have recognised that customers will more likely move in a phased manner across SKU’s on their digital transformation journey, they have also recognised that security and compliance tend to be higher priorities than Voice or Analytics where businesses are more willing to invest. Several global incidents over the past few years such as NotPetya and the coming into force of GDPR has meant that the need for these step up SKU’s have never been higher. Once customers have taken and embedded the advanced security and compliance workloads, it then becomes a very small step up to E5. Phone System and Conferencing and Power BI for just $3 per user per month is an incredible saving compared to buying these as bolt on’s to E3.

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3./Greater opportunities for Professional and Managed Services

The introduction of step up SKU’s between E3 and E5 has broken down the differential into four distinct workloads of advanced security, advanced compliance, voice and analytics. It means that the direction after a Microsoft 365 E3 roll out can be a lot more focused as opposed to having to focus on all workloads at once. This has several benefits. It makes it easier to articulate the value of the particular step up or add on SKU, easier to deploy, easier to discover and cost/benefit, and for Partners greater opportunities for Professional and Managed Services. A great example here would be the Identity and Threat Protection SKU. This contains the newly formed ATP Plan 2 including Threat Intelligence, Cloud App Security, Azure AD Plan 2 with PIM, Azure ATP and Windows Defender ATP. Not only does each need to be rolled out and configured across the customer’s organisation which involves discovery, assessment and Proof of Concept (Professional Services) it also involves ongoing management. ATP Plan 2 involves performing regular attacks on users, cloud app security involves unearthing shadow IT  and sanctioning/un-sanctioning applications, all of these involve reporting to analyse alongside secure score and the graph.

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4./ Enterprise Functionality for SMB’s

Whilst the step-up SKU’s are designed and marketed for Microsoft 365 E3 in order to get to E5, there is nothing to suggest that one day these will be available for SMB’s to begin stepping up from Microsoft 365 Business. From personal experience, SMB customers have similar concerns to Enterprise customers regarding security and compliance, so there’s a great story in the future that SMB’s will enjoy equal access and do not have to compromise on access because of a price which is unrealistic for their business. There are also strong arguments that they need these advanced security and compliance features the most. Whilst it is a sweeping generalisation, security awareness is often lower in SMB’s where there are far less security controls, training and investment which elevates their risk for an attack. There is a big opportunity for the Trusted partner here to come in and provide the step-up SKU’s as part of a managed service offering en route to E5.

The next few years will determine whether the step-up SKU’s will have a significant impact on the adoption of Microsoft 365 E5. They certainly open the road and remove a lot of the barriers and objections which have hindered it since it was first created. By embracing the idea of step up as opposed to a big bang approach to digital transformation, by giving customers access to features which they want, need and identify as a priority, by allowing the focus on specific workloads as opposed to multiple workloads, and providing the step up for both Enterprise and SMB’s, it is certainly a move in the right direction.

But time will tell on the numbers.

As always, feel free to reach out if you have any questions.

Best, Chris