FAQ: Microsoft 365 explained

Microsoft has bundled together Windows 10, Office 365 and a variety of management tools to create its newest subscription suite, Microsoft 365 (M365). Here's what the bundle includes, how much it costs and what it means for the software developer's future.

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Reuters/Pichi Chuang

Microsoft has spent considerable marketing and promotional capital on its newest by-subscription suite, Microsoft 365, since late April, trumpeting it as the firm started to roll out the latest Windows 10 feature upgrade and continuing the huzzahs during Build, its annual developers confab.

Why? What's so important about yet another cluster of software?

Computerworld has an answer to that question, and many others, about Microsoft 365, the less-than-a-year-old effort that may define how the Redmond, Wash. company approaches the business of selling business software for the next decade.

What is Microsoft 365?

At its most basic, Microsoft 365 - M365 for short - is a collection of also-available-independently products. In this case, the bundle is composed of three significant pieces: A user-based license to Windows 10, a user-based license to Office 365, and management tools suitable for the intended audience, whether that's an enterprise IT staff or a one-person, part-time administrator in a small firm.

Like other product bundles Microsoft sells, notably Office 365 itself, Microsoft 365 is sold as a subscription, with monthly fees for each user. Those monthly costs per "seat" range from $20 to nearly $60. With some exceptions, if a customer refuses to renew a subscription, the once-rented software eventually stops working. On the flip side, as long as the subscription is maintained, all updates and upgrades are included at no extra charge. Because that software is continuously refreshed, it is always in support.

How many versions of M365 does Microsoft sell?

More than one and fewer than a score.

The primary SKUs (stock-keeping units) are:

  • Microsoft 365 Enterprise: Available in E3 and E5 configurations - those labels borrowed from Office 365 - for firms subscribing more than 300 employees in a plan. The included OS license is Windows 10 Enterprise.
  • Microsoft 365 Business: Suitable for small- and mid-sized companies, the operating system license is Windows 10 Pro, the SKU has a hard limit of 300 seats. The management tools lean toward the basic, and they're accessed from a simple control panel.
  • Microsoft 365 F1: Targeted at what Microsoft calls "frontline" workers - the workers who ring up sales, take calls, or spend their shifts on factory floors or in the field - this less-expensive bundle ($10 per user per month) features Windows 10 Enterprise but relies on Office's web-based and mobile apps.
  • Microsoft 365 Education, Microsoft 365 Government, Microsoft 365 Nonprofit: Various subscription plans with varying blends of Windows 10, Office 365 and associated tools at prices (including a donated license for non-profits) suitable for each market. Government plans, for example, offer several compliance levels to meet regulatory requirements.

Why is it called Microsoft 365 instead of Windows 365?

Be thankful that the name is Microsoft 365 and not the precursor, the vague mouthful of Secure Productive Enterprise.

With the recent downgrading of Windows in Microsoft's table of organization, M365's forename pick was smart, perhaps even prescient. It also signaled that the bundle was more than just an OS, and the name went at least a little way in saying that it encompassed the core client components of business software.

Can customers buy the M365 components separately?

Yes. Microsoft continues to sell Windows 10 Enterprise E3 and E5, Windows 10 Pro, numerous permutations of Office 365, and Enterprise Mobility Suite + Security (sometimes truncated to just EMS) a la carte. Buying the contents of a M365 subscription separately is almost always more expensive - just as buying each issue of a magazine (remember magazines?) is more expensive than a subscription. But the option may be attractive to customers who dare not commit to all things Microsoft, or who plan to hold onto Windows 7 as long as possible, even past its expiration date in 2020.

As an example, EMS E5, the priciest plan for that part of the M365 bundle, runs almost $15 per user per month.

In some cases, organizations can purchase the individual parts of just that leg of M365. Again, citing EMS E5, customers can buy bits separately, such as Azure Active Directory (AAD) and Intune.

At Build, Microsoft called M365 one of the company's four platforms. Why?

[BTW, the others are: Azure, Dynamics 365 and gaming.]

Microsoft's reconciling its messaging to developers with the demotion of Windows on the org chart - the OS no longer is an independent division - by subsuming Windows under the umbrella Microsoft 365 term.

"For years, we have been at Build talking about the huge opportunity with Windows and Office as developer platforms," wrote Joe Belfiore, the executive who leads Windows, in a May 7 post to a company blog. "Today, many of you would consider yourselves Windows or Office developers. Or web developers who target Windows and Office users. [But] when you leave Build 2018 this week, we hope you consider yourselves Microsoft 365 developers."

Saying that Windows developers are now Microsoft 365 developers does not change what those people do, or if it does, not any time soon.

That was clear when Belfiore touted the latest technologies and features in M365 that developers, he said, should leverage. They were, with few exceptions, new to Windows 10 - like Sets, the resume-where-you-left-off feature - and previously would have been cast as new opportunities for Windows developers.

How important is M365 to Microsoft?

In a word, very.

During the annual Build developers conference in the first week of May, Microsoft banged the M365 drum not only loudly, but constantly. It was, in many ways, the suite's coming out party.

"Every Windows developer, every Office developer, going forward across all of these experience scaffoldings, from Cortana to Teams to Outlook to Timeline to Windows, can become an M365 developer," said CEO Satya Nadella during the kick-off keynote speech that opened Build. He also called it one of the "two massive platform opportunities" for developers, tapped Azure as the other.

How are M365 sales doing?

Microsoft isn't saying.

That's not surprising. M365 is, after all, based on Windows 10, which has yet to break the 50% bar. (In April, analytics company Net Applications said that the operating system accounted for 38.2% of all Windows editions.) And most enterprises have yet to complete their migrations to the new OS.

Some percentage of the Office 365 users are certainly covered by M365 subscriptions, but because of the relative newness of the latter, that number is probably very small. (For context, Microsoft said last week that there are 135 million "commercial monthly active users" of Office 365.)

What are some of the newest M365 features?

Before Build - where Microsoft promoted M365 to developers - the company started releasing the next iteration of Windows 10, the one pegged as 1803 in its yymm format.

"From thousands of conversations with customers, we heard clearly how important it is for IT to simplify the way it enables users across PCs, mobile devices, cloud services, and on-premises apps. Microsoft 365 provides that all with an integrated solution that's simpler, yet also more powerful and intelligent," Brad Anderson, the company's executive in charge of all things M365, said in an April 27 post to a company blog.

To that end, Anderson boasted of enhancements to an already-in-place Windows 10 technology, labeled Delivery Optimization, a peer-to-peer approach to spreading out downloading updates and upgrades among multiple machines. Starting with 1803, IT administrators can monitor Delivery Optimization's performance using the free-to-M365-customers Windows Analytics.

Also, Windows AutoPilot - an onboarding process that lets workers enroll a new device rather than require IT expertise and time - has been making strides, Anderson said. (Microsoft has put much stock in AutoPilot as a money saver for enterprises, pushing Windows PC vendors to adopt the technology so that their wares are compliant.)

"Starting with [1803] Windows AutoPilot now includes an enrollment status page," Anderson explained. "This page enables you to ensure policies, settings, and apps can be provisioned on the device during that out-of-box experience before the user gets to the desktop and begins interacting with the device."

In another move, Microsoft also expanded the in-place admin center - the portal enterprise IT staff have been using to manage M365 - to envelope Office 365, bringing both Windows and Office administrative chores under one roof, eliminating the need for IT to wrestle with multiple online consoles.

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