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US$250,000: That's What Microsoft Paid a University to Use Office 365

Office 365 officially hit the cloud last week, so are organizations rushing to use it? It's hard to say, but if Microsoft is paying someone to migrate to it, does that tell us something?

Office 365 or Google Apps?

Maybe Google is doing a good job promoting Google Apps to organizations and Microsoft is getting a little concerned. Or maybe up take just isn't that big so far for big name organizations. Whatever the case, it seems a little strange that Microsoft would pay someone to migrate to its news cloud productivity platform. But that is what it is doing.

According to an article in betanews, Microsoft is paying the University of Nebraska US$ 250,000 (Business Incentive Fund) to migrate from its current Lotus Notes email and calendaring software to Office 365. It seems that both IBM and Google were in the competition, but one assumes neither came up with the kind of cash Microsoft offered.

In a Q&A on the university website, the following was stated:

In its analysis, the campus CIO review team found that both Google and Microsoft offered a superior web-based interface and enhanced capabilities, and that their business models put more emphasis on the needs of higher education than Lotus Notes. Ultimately, Microsoft was able to provide a more competitive pricing structure than Google.

Office 365 for Education

Microsoft does have an Education version of Office 365 and although the article doesn't state it, we can assume that is the version they will use. The university says that Exchange Server and the Lync program — for instant messaging — will be the first things rolled out.

While the incentive money is good, it's not going to cover the complete costs. The university says that it currently costs just under US$ 1 million in annual operating costs to deliver email to the entire university and they expect that a cloud-based solution will reduce that by 50%.

There will also be one-time upfront costs associated with migrating current Lotus Notes accounts to a new system, rewriting some applications and providing training, but significant savings will be realized over the long term.

Microsoft licensing analyst Paul DeGroot of Pica Communications told Network World that this type of thing does happen, although he wasn't sure how common it was.

In this case, you can see that it came down to a choice between Microsoft and Google, and Microsoft probably threw in $250,000 in BIFs [Business Incentive Funds] to cement the deal. This stuff generally isn't public, for good reason: customers might get the idea that if they're serious about Google, Microsoft may sweeten the pot to win the deal. Wouldn't want that to get out, would we?"

The battle for office productivity and collaboration in the cloud has been on between Microsoft and Google for quite a while now. This one is a win for Office 365. The next one — is anyone's guess.

 

 
 
 
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