Office 365’s big secret: on-premise licences bundled for free

One  misconception with Office 365, and something never referred to by Google, is that the licences customers subscribe to for Micrososoft’s cloud platform can also be used on premise. 

Great article by Loryan Strant he is an Microsoft Office 365 MVP.

I can understand that my opening statement might not make much sense, so let me break it down further. Any Office 365 licences (in the Enterprise family only) which you subscribe to also grant you the right to use their on-premise equivalent.

To keep it simple, Plan 1 of any of the individual products that make up the Office 365 suite (i.e. Exchange Online, SharePoint Online, Office Web Apps and Lync Online) gives you the equivalent Standard Client Access Licence (CAL). Plan 2 is the equivalent of an Enterprise CAL. Plan 3 or “Plus” which will only be available for Lync Online later this year and is the equivalent of the voice component.

Effectively what this means is that you can mix and match cloud and on-premise users without having to acquire additional licences. For example you could run the Enterprise version of SharePoint Server 2010 on-premise but use the My Site functionality of SharePoint Online.

Or you could run a hybrid of some users an on-premise Exchange Server, while the mobile workers reside in SharePoint Online but all mail is filtered through Forefront Online Protection for Exchange (part of Exchange Online).

This allows greater flexibility for organisations looking at moving to the cloud at their own pace or in a long term co-existence model. It’s certainly a far cry from the ‘all or nothing’ online approach of Google Apps and goes a long way to explaining why having licence choices can actually be a good thing.

Here's a table that lays it all out.