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Microsoft Office 365: How One Company Saves Big

Microsoft has been criticized for pushing Office customers toward the cloud, but one healthcare company finds the switch saves money, time, hassles.

Office 2013: 10 Questions To Ask
Office 2013: 10 Questions To Ask
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Microsoft's subscription-based Office 365 might not be for everyone. The software giant's recent decision to expand Office 2013's initially inflexible licensing options testifies to as much, as the move was compelled by customers who felt the standalone editions shouldn't be so constrained relative to their Office 365 counterparts.

Despite the hubbub, Office 365 has continued to gain fans, and based on the experiences of Advocate Health Care VP Rance Clouser, it's easy to see why. Thanks to Office 365, his organization has saved millions thanks to reduced operational demands and increased productivity. Perpetual subscriptions are an expensive prospect, no doubt, especially for a large enterprise. But in Clouser's experience, these overhead costs are a mere drop in the bucket, dwarfed by the benefits they enable.

Office 2013 is cast from the same mold as earlier Office editions, including the fact that it is sold as a one-time purchase. The software can only be installed on one machine at a time, but thanks to Microsoft's recent policy reversal, it can be moved from one computer to another every 90 days.

Office 365, in contrast, allows a single license to run on up to five devices. It also encourages users to harness the cloud, potentially boosting productivity by allowing a worker to stop working on one device and seamlessly pick up on another. In an interview, Clouser said these qualities, as well as the ubiquity of Office products, have improved Advocate Health Care's agility and fiscal health.

[ Confused about new Windows hardware options? You're not alone. See Windows 8 Device Choices Baffle Buyers. ]

Before signing up for Office 365 more than a year ago, the large, Illinois-based healthcare system considered a number of options, including Google Apps for Business. Clouser stated that Microsoft's offerings appealed partly because they aligned more closely with Advocate Health Care's strategy to grow via mergers and acquisitions. When the company acquires a new hospital, he said, the odds that it already uses Office are very high, meaning that Advocate Health Care can avoid migration and training costs.

Clouser was also persuaded by Office 365's ability to scale via the cloud. "With an on-premises solution, every time we added a site or had an influx of a large number of new users, we would have to requisition additional servers and licenses, as well as people to support all that," he said, adding, "In the cloud, all we do is pay for the subscription cost." He stated that migrating new users is a relatively painless, one-time operation, and that the model has allowed the company to avoid adding additional staff and technology. "Those alignments sealed the deal," he stated.

Office 365 has also allowed Advocate Health Care to more effectively allocate its budget. The subscription model, he asserted, allows the company to consider the software an operating expense rather than a capital investment. Without this shift in classification, he said, the company would "continually go through the process of requesting additional capital to swap out our infrastructure."

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User Rank: Apprentice
3/16/2013 | 12:41:29 AM
re: Microsoft Office 365: How One Company Saves Big
Interesting use of accounting tricks to make the subscription model appear more viable and less expensive. I didn't feel like Microsoft was using that concept as a "selling point". Instead, I was under the impression that the allure of Office 365 was more the constant updates that are rolled out like every two months and the cloud-based ideal to work away from work at any computer.

Perhaps Microsoft's sales and marketing team would gain more traction for Office 365 with a ROI that illustrates these financial benefits...
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