The white paper compares the total cost of ownership (TCO) of delivering Microsoft Exchange, SharePoint, and Lync using three models: on-premise, public cloud (Office 365), and private cloud over three years for 5,000 users. The key takeaways are: 1) A private cloud deployment is less expensive than on-premise for all three solutions and less expensive than the public cloud when additional enterprise capabilities are required. 2) Exchange is 26% less expensive in a private cloud than the public cloud and 13% less than on-premise. 3) SharePoint is 18% less in a private cloud for basic capabilities but only slightly more (9%) for additional

1. WHITE PAPER
Cloud vs. Cloud: Comparing the TCO
of Office 365 and Private Clouds
ON An Osterman Research White Paper
Published March 2012
SPONSORED BY
SPON
sponsored by
Osterman Research, Inc.
P.O. Box 1058 • Black Diamond, Washington • 98010-1058 • USA
Tel: +1 253 630 5839 • Fax: +1 253 458 0934 • info@ostermanresearch.com
www.ostermanresearch.com • twitter.com/mosterman

2. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
Executive Summary
The Microsoft stack of core communication and collaboration offerings – Exchange for email and
calendaring, SharePoint for content management and collaboration, and Lync for real time
communications and telephony – can be provided using three basic delivery models:
• The traditional on-premise model using in-house servers, software and IT labor.
• A public cloud model, such as Office 365, in which each service is offered for a fee per
user per month and all backend infrastructure is multitenant and located off-premises.
• A private cloud model, in which the servers and software are all dedicated per customer
and located in a secure third party data center, but the infrastructure is managed remotely
by a service provider for a fee per user per month.
GOAL OF THIS WHITE PAPER
The primary purpose of this white paper is to compare and contrast the “Cloud vs. the Cloud”
(public vs. private), as well as the traditional, on-premise approach, in terms of their Total Cost
of Ownership (TCO), and to explain why key differences exist between them. The paper will
work to dispel some of the traditional myths relating to cloud services for communications and
collaboration in general and relating to the public cloud (as represented by Office 365), and the
rapidly emerging private cloud model.
KEY TAKEAWAYS
• While some decision makers believe that the cloud can provide cost benefits only for small
organizations, our cost model demonstrates that enterprise-level customers will also achieve
significant cost savings. For example, an organization of 5,000 users implementing the
basic Microsoft stack of Exchange, SharePoint and Lync will save 19% with a private cloud
compared to a conventional on-premise system.
• Conventional wisdom holds that the communications and collaboration public cloud offers
the most cost savings of any delivery model. Here, TCO calculations show the public cloud
to be less expensive (21%) than the private cloud when comparing basic capabilities.
• However, most medium-sized and large organizations will require a variety of enterprise-
grade capabilities. When these additional features are factored in, the pendulum swings the
other way and the private cloud ends up as less expensive (20%) compared to the public
cloud. For example, adding bandwidth, storage and an upgrade to Office 365 E2 make the
cost of Exchange in the private cloud significantly less expensive (26%) than when delivered
via the public cloud. The cost of providing Lync voice services makes private cloud delivery
of Lync also much less expensive (39%) than its public cloud counterpart.
• Cloud delivery is less expensive than on-premise delivery primarily because of the reduced
labor costs associated with the cloud. Moreover, cloud delivery provides the additional
benefit of freeing up in-house IT staff members for other tasks that may provide more value
to the organization.
©2012 Osterman Research, Inc. 1

3. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
IMPORTANT DETAILS IN THE APPENDIX OF THIS WHITE PAPER
We encourage readers of this white paper to examine the cost tables included in the Appendix
of this white paper. These tables provide the detail that supports the conclusions we offer in
this document.
Choosing the Right Delivery and Management Model
DELIVERING THE MICROSOFT UC STACK
There are three basic delivery models for providing email, collaboration and unified
communication services:
• On-premise
Servers and other infrastructure elements are deployed, configured and managed on the
customer premises and managed by in-house IT staff members. This is the conventional
model that has traditionally been used by most Exchange, SharePoint and Lync-enabled
organizations.
• Public cloud
A third-party provider (such as Microsoft) manages a data center and customers rent
services on fee-per-user/per-month basis. This model is growing in popularity and is used
by Office 365 customers, and for many years previous to that by hosted Exchange
customers.
• Private cloud
Servers and other infrastructure elements are located in a dedicated co-lo facility but are
managed either by the hosting company or remotely by a third party managed service
provider. This model is also growing in popularity because it offers a “hybrid” approach: the
security and resiliency of the on-premise delivery model combined with the cost and IT
labor savings of the cloud model.
What is the Least Expensive Approach?
THE COST DIFFERENCES BETWEEN DELIVERY AND MANAGEMENT MODELS
CAN BE SUBSTANTIAL
As shown on the following pages, the differences in the costs of providing the various solutions
in the Microsoft stack can vary substantially based on the delivery model used. For example,
the cost of a complete Exchange deployment for 5,000 users is 26% less expensive when
delivered via a private cloud compared to the public cloud, and 13% less expensive compared
to an on-premise deployment. Similarly, the cost of deploying the entire Microsoft stack of
Exchange, SharePoint and Lync – along with additional capabilities like business continuity, add-
on storage farms, additional bandwidth, etc. – is 10% less expensive when using a private
cloud compared to the public cloud, and 16% less expensive than when using on-premise
infrastructure versus a private cloud.
©2012 Osterman Research, Inc. 2

4. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
WHY IS THE PRIVATE CLOUD THE LEAST EXPENSIVE APPROACH?
The table below provides a comparison of the traditional, on-premise model of delivering
services with the public and private cloud approaches. In a nutshell, the private cloud model of
delivering and managing the services in the Microsoft stack is less expensive than the public
cloud because of two primary factors:
• While public cloud providers include a variety of hardware, switching, storage, license fees
and other features in the base price of their offerings, this base price is significantly higher
than the fully amortized price of the hardware, software and other infrastructure elements
offered in a private cloud deployment.
• When deploying a full-featured enterprise-grade system, some additional features are
typically much more expensive when deployed in a public cloud model. For example, as
shown in the Appendix to this white paper, features like adding voice functions to Lync or
adding extra bandwidth in an Exchange environment are much more expensive in the public
cloud than in a private cloud scenario.
Comparison of Exchange, SharePoint and Lync TCO by Delivery Model
On-Premise Public Cloud Private Cloud
• Low amortized cost of • No cost for hardware, • Low amortized cost of
Exchange CAL + Server + storage or deploying Exchange licensing
Software Assurance infrastructure • Low cost for support
Exchange
licensing • No cost for additional
PROS
hardware, storage and
deployment
• Lowest cost for support
• Higher cost for additional • Much higher costs for • Higher cost for additional
hardware, storage and additional services, e.g., hardware, storage and
deployment compliance, archiving, deployment than in the
• Highest cost for support Office 365 upgrade public cloud
Exchange
because of need to manage • Additional costs (not
CONS
infrastructure using only in- shown) for hardware and
house personnel software for proxy servers
and federation services to
support cloud access
©2012 Osterman Research, Inc. 3

5. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
Comparison of Exchange, SharePoint and Lync TCO by Delivery Model (concluded)
• Low amortized cost of • No cost for hardware, • Low amortized cost of
SharePoint CAL + Server + storage or deploying SharePoint licensing
SharePoint
Software Assurance infrastructure • Low cost for support
PROS
licensing • Lowest cost for support
• Higher costs for BC/DR • High monthly costs for • Higher costs for BC/DR
• Highest costs for testing SharePoint Online
add-on farm • Testing & Development
• Highest costs for Farms must be rolled out
development add-on farm on-premise or in a private
• Highest costs for support cloud.
• Additional costs (not
SharePoint
shown) for hardware and
CONS
software for proxy servers
and federation services to
support cloud access
• There is a large feature
gap between SharePoint
Online and SharePoint in
the Private Cloud
• Much less expensive & • No cost for hardware, • As inexpensive as the
more full featured than storage or deploying public cloud for support
public cloud for voice infrastructure
Lync
services • Lower cost than on-
PROS
• Lower overall costs than in premise for basic services
the public cloud for a
variety of ancillary services
• High costs for support • High monthly costs for
Lync Online
• Even using the most
functional Lync Online
offering, there is still a
Lync large feature gap with Lync
CONS On-Premise or Lync in the
Private Cloud
• Hybrid Deployments are
not supported. You must
deploy Lync Online or
Lync-On Premise.
COMPARING THE COSTS BY SOLUTION AND DELIVERY MODEL
For purposes of our cost analysis, we compared the total cost of ownership for Microsoft’s three
primary enterprise offerings – Exchange, SharePoint and Lync – using on-premise, public cloud
and private cloud deployment models over a 36-month lifecycle. Our analysis focused on an
enterprise of 5,000 users. Moreover, we developed a basic or “Required” configuration – that
set of infrastructure and services required to support basic functionality for each element of the
Microsoft stack – and an enterprise grade or “Additional” set of capabilities, both of which are
presented in the charts on the following pages. The analysis and interpretation of Microsoft
licensing (for both on-premise and online) is a complex art. As evidence of this complexity the
sidebar on the next page calls out one single add-on example in the form of Exchange
archiving.
©2012 Osterman Research, Inc. 4

6. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
Because of the sophisticated nature of the model
and its high level of detail, we have presented the TCO and Differences for
calculations in an Appendix rather than present them EXCHANGE ARCHIVING
in the body of the white paper itself. To the extent
Even for native archiving in Exchange there
that “your mileage may vary”, it is important that the
exists some confusing and key differences in
reader uses the conclusions of this whitepaper as cost between Cloud and On-Premise:
directional guidance, not as hard and fast
conclusions that will apply in every circumstance. 1. Microsoft Exchange Online Archiving, a
Developing cost models for offerings as complex as hosted archiving solution for on-
premises Exchange 2010 mailboxes,
those discussed in this white paper requires some
cannot be used with Office 365.
level of interpretation and judgment, and so some
readers may disagree with aspects of the cost model 2. For Exchange Online (in Office 365) the
we have developed here. core archiving capability is the same as
that provided for on-premise Exchange
at $5 per user per month.
Moreover, because Microsoft continues to evolve its
Office 365 offering, it is important to note that the 3. The Exchange Online Plan 2 license
calculations presented in this white paper reflect the provides advanced archiving features
state of Office 365 in the first quarter of 2012, like legal hold.
including the price reductions of approximately 20%
4. If users need more than 25Gb of
announced in mid-March 2012. storage per user then the E3 license at
$24/month is required. This will give
CLOUD vs. CLOUD -- CLEARING UP users 25Gb of storage for the primary
mailbox plus unlimited storage for
COMMON MISCONCEPTIONS Personal Archives. The E3 license is
Two key myths must be dispelled in order to move also required if single item recovery is
forward with helpful TCO calculations regarding needed for longer than 30 days.
Exchange, SharePoint and Lync. First, and contrary
5. Use of Personal Archive or retention
to the beliefs of many decision makers, the cloud is
policies requires a Microsoft Exchange
not just for small organizations. Although Microsoft Online account or Microsoft Exchange
says that 90%+ of Office 365 deployments are with Server 2010 account together with
companies under 50 seats, and even though only Microsoft Exchange Server Enterprise
about 5% of the total market today is using the Client Access License (CAL). This
requires Exchange Online users to have
cloud for Exchange, our findings clearly demonstrate an enterprise CAL on top of their
that cloud-based offerings – whether public or standard Exchange online monthly fees.
private – are less expensive than on-premise
solutions even in large organization deployments. 6. Not all Personal Archive features are
Second, when it comes to Exchange, SharePoint and available without either the Outlook
2010 or OWA client.
Lync TCO, not all clouds are created equal. In spite
of the power of the Microsoft and Google marketing
machines pushing their public cloud services, private cloud offerings are typically less expensive
than public cloud offerings for delivering Microsoft email, collaboration and UC solutions at the
enterprise level, as shown on the following pages.
MICROSOFT EXCHANGE
As shown in the following figure, the cost of a full private cloud deployment of Exchange is
significantly less expensive than either an on-premise (13%) or public cloud (26%) deployment.
The primary savings of the private cloud model comes from two areas:
©2012 Osterman Research, Inc. 5

7. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
• Relative to the public cloud model, private cloud savings come from the relatively low cost
of the Exchange Client Access license ($67, or $1.86 per month over three years) compared
to the Exchange Online price of $4.00 per month (assuming the E1 plan). Savings for the
private cloud would be even more substantial if the public cloud model assumed the
Exchange Online E2 plan at $8 per month or even the Office 365 E2 through E4 plans in the
base configuration, which are priced at $14 to $22 per month.
• Relative to the on-premise model, the private cloud is much less expensive in terms of IT
labor cost per user. Our model assumes that while there will still be costs for help desk and
IT support staff when using a private cloud, overall IT costs are lower for the private cloud,
largely because little support must be provided by private cloud customers themselves.
Moreover, in the private cloud a single operations staff member can monitor multiple
customers at once, but in an on-premise environment, operations staff can monitor only a
single environment.
It is also important to note that the on-premise model is subject to potentially greater cost
increases over time given that labor represents a larger proportion of overall TCO compared to
the private cloud model and public cloud models.
Microsoft Exchange Monthly Cost per User in a 5,000-User Environment
©2012 Osterman Research, Inc. 6

8. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
MICROSOFT SHAREPOINT
The private cloud model for managing SharePoint offers a much lower TCO compared to the
on-premise delivery model, but the private cloud is more expensive than the public cloud for
both the “required” feature set (18%) and only slightly more expensive for the required plus
additional capabilities (9%), as shown below. It is important to point out, however, that the
only functionality which pushes the private cloud model higher than SharePoint Online for the
additional capabilities is a secondary site for Disaster Recovery. Companies looking to
implement SharePoint without the extra cost of a DR site can actually do it for a 15% lower
cost in a private cloud as with Office365.
As with Exchange, the cost of the IT labor required to manage SharePoint varies widely based
on the delivery model, with on-premise clearly having the highest labor cost component. This
makes the on-premise model the most susceptible to price increases over time as labor rates
increase, and it also makes on-premise delivery highly subject to regional labor cost differences.
Microsoft SharePoint Monthly Cost per User in a 5,000-User Environment
MICROSOFT LYNC
As shown in the following figure, the cost of delivering Microsoft Lync with private cloud
delivery is slightly more expensive ($2.37/user/month or 29%) than the public cloud for the
©2012 Osterman Research, Inc. 7

9. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
required configuration (not including voice), but substantially less expensive ($14.79 per user
per month, or 39%) when additional features are added.
As with the other offerings in the Microsoft stack, the cost of the on-premise delivery model is
impacted significantly by IT labor costs. For public cloud delivery of Lync, IT labor represents a
smaller proportion of the TCO.
It is important to note that the largest single cost for public cloud (Office 365) delivery of Lync
among the additional enterprise grade capabilities is the provision of Lync Enterprise Voice,
Microsoft’s telephony alternative. The cost of Lync Voice is an additional $28.04 which figures
out to $16.50 per month per seat more on the client side PLUS and additional $14.02 per
month per seat on the server side as shown in the Appendix of this white paper. These costs
are compared to $3.00 per seat per month total (client + server) for private cloud and on-
premise delivery. This significant differential in cost is due to the fact that Lync Enterprise
Voice requires an upgrade to the full E4 version of Office 365 in the Online deployment PLUS
the addition of a full on-premise Lync Server, whereas the additional cost in the private cloud is
simply the amortized Plus CAL to add voice capabilities.
Microsoft Lync Monthly Cost per User in a 5,000-User Environment
©2012 Osterman Research, Inc. 8

10. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
TCO ACROSS THE ENTIRE MICROSOFT STACK
As shown in the following figure, the entire cost of the Microsoft stack of Exchange, SharePoint
and Lync is substantially less expensive when delivered in a private cloud than when delivered
via on-premise delivery or using a public cloud. Based on our cost model, private cloud delivery
of the complete Microsoft UC stack with all capabilities is 20% less expensive than the public
cloud and also 18% less expensive than on-premise delivery.
Cost per User of the Entire Microsoft Stack in a 5,000-User Environment
About Azaleos
Azaleos Corporation provides managed email, collaboration and unified communications
services available in private cloud, on-premise or mixed deployment architectures. Azaleos’ 24x7
managed services for Microsoft Exchange, SharePoint, Active Directory, Lync, and BlackBerry
Enterprise Server improve availability, security and performance, while reducing maintenance
time and costs.
The patented AzaleosX technology platform enables customers to maintain control over servers
and data including their location, while uptime, maintenance, and support is proactively handled
by certified experts in its network operations centers. Hundreds of companies from Fortune 500
©2012 Osterman Research, Inc. 9

11. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
to mid-market enterprises rely on Azaleos to manage their collaboration infrastructures and
address issues before users ever know they exist.
Azaleos is the largest provider of private cloud, on-premise and hybrid managed services in the
communications and collaboration space and the go-to option for organizations who can’t find a
fit with Microsoft or Google public cloud solutions. A member of the National Systems
Integrator program (NSI), Azaleos is one of Microsoft’s top 34 partners in the United States and
a member of both the Microsoft Exchange and SharePoint Technology Adoption Programs For
more information visit www.azaleos.com.
Appendix – Cost Model
On the following pages are the detailed costs that comprise the model developed for this white
paper. We have identified basic or “Required” elements – those infrastructure, labor and other
components that are necessary to provide the service; and enterprise grade or “Additional”
elements that can provide other types of functionality.
As noted earlier, for purposes of this cost analysis we compared the total cost of ownership for
Microsoft’s three primary enterprise offerings – Exchange, SharePoint and Lync – using on-
premise, public cloud and private could deployment models over a 36-month lifecycle in an
environment of 5,000 users.
Keep in mind that for the purposes of our calculations we chose to evaluate each application
(Exchange, SharePoint and Lync) as standalone deployments versus a combined deployment.
In some cases this calculation could lead to higher costs when 2 or 3 applications are combined
since we take away potential economies of scale in the workloads. For example by combining
hardware (i.e. storage, hardware load balancer, etc.) or by not ‘double charging’ for Exchange
unified messaging in the Lync workload section (if the customer already has Exchange
licensed), there are ways to decrease costs in the model.
©2012 Osterman Research, Inc. 10

12. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
Cost Comparison – Microsoft Exchange
Required On-Premise Public Cloud Private Cloud
Exchange Licensing
$1.86 - $1.86
(on-premise, Standard CAL and Server)
Exchange Online Plan 1 - $4.00 -
Windows Server License $0.03 $0.00 $0.03
MSFT Software Assurance (Standard Licensing) $0.95 NA $0.95
Migration $0.03 $0.03 $0.03
Support: Help Desk (on customer premise) $1.75 $1.75 $1.75
Support: Infrastructure (vendor/service) $2.50 Included $1.00
Support: Infrastructure (vendor liaison) - $0.50 -
Server Hardware $0.25 NA $0.25
Switching (Network and iSCSI) Hardware $0.56 NA $0.56
Storage Hardware $1.43 NA $1.43
Load Balancer Hardware $0.44 NA $0.44
Deployment $0.15 NA $0.15
Running Total $9.95 $6.28 $8.45
Additional On-Premise Public Cloud Private Cloud
Exchange Licensing “Upgrade”
$0.99 - $0.99
(on-premise, Enterprise CAL and Server)
Exchange Online Plan 2 (Upgrade from P1) - $4.00 -
MSFT Software Assurance (Enterprise Licensing) $0.59 NA $0.59
Extra Bandwidth $0.00 $1.00 $0.00
Exchange Client $1.00 $1.00 $1.00
Deployment $0.35 NA $0.35
Sub-Total $2.93 $6.00 $2.93
Running Total $12.88 $12.28 $11.38
Additional On-Premise Public Cloud Private Cloud
Office 365 E3 (Upgrade from Exchange Online E2) $0.00 $12.00 $0.00
Included with
Archiving (Exchange Personal Archives) $0.00 $0.00
O365 E3
Compliance $2.50 $2.50 $2.50
Filtering (AV/AS) $1.00 Included $1.00
Encryption $1.00 $1.00 $1.00
Sub-Total $4.50 $15.50 $4.50
Running Total $17.38 $27.78 $15.88
Additional
On-Premise Public Cloud Private Cloud
Business Continuity --- Disaster Recovery
Exchange Licensing $2.85 NA $2.85
Windows Server License $0.03 $0.00 $0.03
Migration $0.03 $0.03 $0.03
HLB Hardware $0.44 $0.00 $0.44
Support: Infrastructure (vendor/service) $2.50 Included 1.00
Server Hardware $0.13 NA $0.13
Deployment $0.15 NA $0.15
Sub-Total $6.13 $0.03 $4.63
GRAND TOTAL $23.51 $27.81 $20.51
©2012 Osterman Research, Inc. 11

13. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
Cost Comparison – Microsoft SharePoint
Required – Production On-Premise Public Cloud Private Cloud
SharePoint Licensing (Standard CAL and Server) $2.75 - $2.75
SharePoint Online Plan 1 - $4.00 -
Software Assurance (Standard) $1.32 NA $1.32
SQL Server License $0.04 $0.00 $0.04
Windows Server License $0.03 $0.00 $0.03
Migration $0.03 $0.03 $0.03
Support: Help Desk $2.17 $2.17 $2.17
Support: Infrastructure $3.65 $0.00 $1.33
Support: Infrastructure (vendor liaison) - $0.75 -
Storage: Hardware or Additional Online Costs $0.22 $0.01 $0.22
Server Hardware $0.17 $0.00 $0.17
Deployment $0.03 $0.03 $0.03
Server Cost $0.17 $0.00 $0.17
Running Total $10.58 $6.99 $8.26
Additional
On-Premise Public Cloud Private Cloud
Production
SharePoint Licensing “Upgrade” (Enterprise CAL and
$2.31 - $2.31
Server)
SharePoint Online Plan 2 (Upgrade from P1) - $4.00 -
Office Web Apps Upgrade - $6.00
Software Assurance (Enterprise) $1.15 NA $1.15
FAST Search License $0.12 NA $0.12
Server Hardware for FAST $0.25 NA $0.25
Internet Access (Enterprise Server) License $0.23 NA $0.23
Extranet Partner Access License NA $0.02 NA
Sub-Total $4.06 $10.02 $4.06
Running Total $14.64 $17.01 $12.32
Additional
On-Premise Public Cloud Private Cloud
Business Continuity – Disaster Recovery
Deployment $0.03 $0.00 $0.03
SharePoint License (Standard and Enterprise CAL) $5.17 - $5.17
SQL Server License $0.04 $0.00 $0.04
Windows Server License $0.04 $0.00 $0.04
Support: Infrastructure $1.83 $0.00 $0.67
High Availability $2.95 $0.00 $1.14
Storage Hardware $0.22 $0.01 $0.22
Server Hardware $0.17 $0.00 $0.17
Sub-Total $10.45 $0.01 $7.48
Running Total $25.09 $17.02 $19.80
©2012 Osterman Research, Inc. 12

14. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
Cost Comparison – Microsoft SharePoint (concluded)
Additional
On-Premise Public Cloud Private Cloud
Add-on Farm - Testing
Deployment $0.03 $0.03 $0.03
Support: Infrastructure $1.83 $0.67 $0.67
High Availability $2.95 $1.14 $1.14
Storage Hardware $0.22 $0.22 $0.22
Server Hardware $0.17 $0.17 $0.17
SharePoint License (Standard and Enterprise CAL) $5.17 $5.17 $5.17
SQL Server License $0.04 $0.04 $0.04
Windows Server License $0.03 $0.03 $0.03
Sub-Total $10.44 $7.47 $7.47
Running Total $35.53 $24.49 $27.27
Cost Comparison – Microsoft SharePoint (concluded)
Additional
On-Premise Public Cloud Private Cloud
Add-on Farm - Development
Deployment $0.03 $0.03 $0.03
Support: Infrastructure $1.83 $0.67 $0.67
High Availability $2.95 $1.14 $1.14
Storage Hardware $0.22 $0.22 $0.22
Server Hardware $0.17 $0.17 $0.17
SharePoint License (Standard and Enterprise CAL) $5.17 $5.17 $5.17
SQL Server License $0.04 $0.04 $0.04
Windows Server License $0.03 $0.03 $0.03
Sub-Total $10.44 $7.47 $7.47
GRAND TOTAL $45.97 $31.96 $34.74
©2012 Osterman Research, Inc. 13

15. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
Cost Comparison – Microsoft Lync
Required On-Premise Public Cloud Private Cloud
Lync Licensing (Standard and Enterprise CAL and
$3.86 $3.86
Server for IM/P and conferencing)
Lync Online P2 - $5.50 -
MSFT Software Assurance (Standard + Enterprise
$1.93 - $1.93
Licensing)
Windows Server License $0.04 $0.00 $0.04
Migration $0.03 $0.03 $0.03
Support: Help Desk $1.75 $1.75 $1.75
Support: Infrastructure 5.00 - 2.25
Support: Infrastructure (vendor liaison) - $1.00 -
Server Hardware $0.20 - $0.20
Load Balancer Hardware $0.44 - $0.44
Deployment $0.15 - $0.15
Running Total $13.40 $8.28 $10.65
Additional On-Premise Public Cloud Private Cloud
Lync Licensing “Upgrade” (PLUS License) $3.00 $3.00
Office365 E4 Plan (Upgrade from Lync P2) - $16.50 --
MSFT Software Assurance (PLUS Licensing) $1.47 $1.47 $1.47
Additional Lync Server On Premise Licensing for
- $3.86 -
Enterprise Voice
Additional Licensing, Hardware, Support and
- $3.83 -
Deployment for On-Premise Lync Server
Extra Bandwidth $1.00 $1.00 $1.00
Lync Client NA $0.85 -
Included with
$2.83 Office365 E4 $2.83
Voicemail (via Exchange UM) Plan
Disaster Recovery $1.00 - $1.00
Deployment $0.35 - $0.35
Headset $2.00 $2.00 $2.00
Sub-Total $11.65 $29.51 $11.65
Running Total $25.05 $37.79 $22.30
Additional On-Premise Public Cloud Private Cloud
Archiving $0.00 Not included $0.00
Media Gateway $0.20 - $0.20
SIP Trunk $0.50 - $0.50
Forefront Security for Lync (malware & out of policy
$0.50 $0.50 $0.50
content)
Sub-Total $1.20 $0.50 $1.20
GRAND TOTAL $26.25 $38.29 $23.50
©2012 Osterman Research, Inc. 14

16. Cloud vs. Cloud: Comparing the TCO of Office 365 and Private Clouds
© 2012 Osterman Research, Inc. All rights reserved.
No part of this document may be reproduced in any form by any means, nor may it be distributed without the permission of
Osterman Research, Inc., nor may it be resold or distributed by any entity other than Osterman Research, Inc., without prior
written authorization of Osterman Research, Inc.
Osterman Research, Inc. does not provide legal advice. Nothing in this document constitutes legal advice, nor shall this document
or any software product or other offering referenced herein serve as a substitute for the reader’s compliance with any laws
(including but not limited to any act, statue, regulation, rule, directive, administrative order, executive order, etc. (collectively,
“Laws”)) referenced in this document. If necessary, the reader should consult with competent legal counsel regarding any Laws
referenced herein. Osterman Research, Inc. makes no representation or warranty regarding the completeness or accuracy of the
information contained in this document.
THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT WARRANTY OF ANY KIND. ALL EXPRESS OR IMPLIED REPRESENTATIONS,
CONDITIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, ARE DISCLAIMED, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE DETERMINED TO BE ILLEGAL.
©2012 Osterman Research, Inc. 15