Microsoft 365 Enterprise Value Options

Microsoft 365 Enterprise Editions are, without a doubt, the most value-laden set of products that Microsoft has
ever offered in a single SKU. Microsoft 365 E3 and E5 are comprised of Office 365, Enterprise Mobility and
Security ( EMS) and Windows 10 Enterprise and are offered as a per user subscription. The breadth, depth and
richness of the extremely broad and growing range of features in Microsoft 365 is simply stunning. On first
impressions, it appears that Microsoft 365 is a pure cloud play. Meaning that Microsoft wants customers to
operate entirely in, and from, Microsoft cloud properties. Fortunately, this is not entirely true. There is a little-
known licensing benefit that enables a wide range of implementation and operational options for organizations
that may not have the ability, or desire, to fully move to a cloud-only operational model but could definitely take
advantage of many of the Microsoft 365 offerings around collaboration, information management, security and
more. This brief document explores some of those options.

Extended Use Rights – Transition to cloud at your pace

In the Microsoft Product Terms for Microsoft 365, there is an Extended Use Rights clause that has the potential
to be very useful to many organizations that have an infrastructure investment in Microsoft Office servers.
Those servers include Exchange, Sharepoint and Skype for Business. The Extended Use Right basically means
organizations can run Office server software for no charge – no Server or Cal License fees – for any user that is
assigned a Microsoft 365 Subscription. The application options of these Extended Use Rights requires deep
consideration to determine if there truly is value embedded in them for an organization. For some, the value
could be substantial depending on a variety of factors. The text for the Extended Use Rights for Microsoft 365 E3
and E5 from the November 2019 Product Terms document;

2.2 Extended Use Rights for Microsoft 365 E3/E5

2.2.1 Office Servers
Each Licensed User assigned a Microsoft 365 E3/E5 User SL may:
 install any number of copies of the following server software on any Server dedicated to Customer’s
use: Exchange Server, SharePoint Server, and Skype for Business Server; and
access to the above server software is exclusive to those users assigned a Microsoft 365 E3/E5 User
SL or External Users.
Dedicated Servers that are under the management or control of an entity other than Customer or one of its
Affiliates are subject to the Outsourcing Software Management clause. This provision does not apply to User
SLs acquired under the Microsoft Cloud Agreement.

For organizations that are considering adopting Microsoft 365, but do not want to immediately transition their
Office Server infrastructure to all-cloud technologies, these Extended Use Rights can result in significant cost
savings for on-premises software while allowing the organization to employ high-value security, productivity,
management and Windows 10 subscriptions while they transition to all-cloud operations over time.

© 2019 Paul Morse https://www.usmicroserver.com 1

Consolidate and Modernize Data Centers

For organizations with aging infrastructure, including low-core-count server farms with antiquated storage
running large numbers of clustered Office Servers, these Extended Use Rights can be very beneficial if they want
to modernize their server infrastructure and employ Hyper-Converged Infrastructure and reduce the size and
complexity of their existing data center estate. For example, by moving to Azure Stack HCI for on-premises
computing, and employing a hybrid cloud computing model, they can have a consolidated, more efficient, and
significantly lower cost on-premises compute environment that they can integrate with Microsoft 365
technologies of value and transition various on-premises Office Servers to the cloud over time and at their
desired pace.

It needs to be noted here that Windows Server licenses and CAL’s are not included in the Microsoft 365
Extended Use Rights, so the Windows Server licenses and CAL’s will still be required. With regard to Windows
Server licenses, if the organization can achieve a significant server count reduction through consolidation and
moving to a Hyper-Converged Infrastructure, the costs for the Server, Management, Security and other licenses
could be reduced as well. Further, if the organization wants to employ Azure technologies like Azure File-sync,
Site Recovery, Storage, Backup and other services as parts of the overall solution, the on-premises footprint of
the entire computing environment can potentially be reduced substantially.

Conclusion

Every organization should be considering Microsoft 365 as a viable approach to meeting some portion of their
computing needs. The overall value of the offering simply can’t be ignored for organizations that want to
improve productivity and security and achieve a digital transformation. By understanding the Microsoft 365
Extended Use Rights, and the broader options around implementation of those rights, many orgs may find a
newly viable set of alternatives for modernizing their infrastructure and lowering their costs through on-
premises consolidation and hybrid cloud deployment strategies.

Resources -
Microsoft 365 site https://www.microsoft.com/en-us/microsoft-365/enterprise
Microsoft Product Terms site https://www.microsoft.com/en-us/licensing/product-licensing/products
Azure Stack HCI site https://azure.microsoft.com/en-us/overview/azure-stack/hci/
Azure Backup site https://azure.microsoft.com/en-us/services/backup/
Azure Site Recovery site https://azure.microsoft.com/en-us/services/site-recovery/
Azure Storage site https://azure.microsoft.com/en-us/product-categories/storage/

© 2019 Paul Morse https://www.usmicroserver.com 2