Last Tuesday the Office 365 Technical Blog posted an update that was extremely important as regards SharePoint Online. In the post Storage Update for SharePoint Online Enterprise Plans, Josh T spilled the much awaited beans. Based on your feedback, we have reduced the price of additional storage by 92% for the the Enterprise (E) plans. Storage costs beyond the initial 10GB and 500MB per user were once $2.50 per GB per month. This was difficult to stomach for many of the smaller partners and SMB businesses that I work with day to day, and it precluded many otherwise excellent scenarios for SharePoint Online in general.
The U.S. $2.50 per GB/month price dropped to $0.20 per GB/month. WOW! All I can say is if you were not out selling SharePoint Online before, this made it a whole lot easier to accommodate almost any scenario your customer could envision!
Let’s refresh ourselves on the math a little better for SharePoint Online Storage:
There is a simple equation to help determine how much SharePoint Online content and data storage space your company gets by default when you purchase of Office 365. Please note that “seats” refers to individual user licenses.
Total available tenant storage quota
10GB + (500MB * E1-E4 seats) + purchased additional storage
Note: Kiosk workers (K1 & K2) and external users do not contribute to the total available tenant storage quota.
In addition to overall combined company storage, every user that gets a My Site (E1-E4) will also get 500MB of personal storage. My Sites are a central location to store and manage documents, favorite links, and personal blog and wiki pages.
The above was from the aforementioned post. Let us apply it to an SMB sized account in the example below.
If your customer has 20 employees and they subscribed to the E1 plan for all 20 employees they would receive 10GB of initial Storage +10GB(500MB *20 seats) for the users, for a total of 20GB. This might be satisfactory for basic document storage and collaboration, but the moment we apply stress in the form of graphics intensive office documents, high resolution images, large pdfs, etc. we immediately outpace the “built-in” storage. …This is where the “additional storage” comes in. Even a small engineering or inspection company that took photos of job sites and inspection issues would need a considerably higher amount of storage, say maybe 250GB. In the old model at $2.50 per GB, that would have equated to $575.00 (230GB * $2.50) per month in addition to the monthly subscription cost of $160 ($8 * 20 Seats). It was just incongruous. You paid $160 per month for state of the art collaboration capability, and $575 per month to store stuff. The change that was made was for the better of the partner community and the customer.
NOW, do the math under the new pricing and the additional storage cost is only $50 per month! Much more in line with what a customer would consider “reasonable”.
This excites me a great deal because I see many new opportunities to go after customers where the economics did not work out well before. This also is a great way to better compete with Google. When you pair this with the recent price decrease of Office 365 enterprise plans by about 20% across the board, it is the one-two punch you need to sell the heck out of it.
Add the present Big Easy Offer for online services which is an unprecedented 15% Partner Subsidy sent to the customer now through June 30th, and you have the incentives and economics to drive the sale home!
Now go sell some Office 365!