Going back six years, I remember discussing contentiously the pros and cons about moving from SharePoint on-premises to Office 365 (now M365). Today, we are reaping the benefits of the huge digital disruption that forced the hand of many organizations to embrace the modern workplace.
We are collaborating faster and collecting and storing vast amounts of data at an incredible rate – cloud computing offers us that luxury. For organizations, data handling comes with many well-publicized costs. All processes since 2018 are under GDPR scrutiny with potential breaches carrying cost penalties that could sink any business. I cannot imagine any business professional who hasn’t heard of it.
But what about the more incremental hard costs like storage, which stack up daily and can end up costing your organization a fortune month after month. Where does the accountability lie? You may be reading this article thinking “oh goodness, this article is for me!” Or you know of a colleague who has this exact problem. Well, this article will provide a solution.
The Great M365 Storage Cost Challenge
Enterprises face several challenges with high Microsoft 365 storage costs, particularly when their storage needs exceed the default allocations provided by their subscription plans. In this all too common case, the company is incurring significant expenses due to the following factors:
Base Subscription Costs
The company has 100 E3 licenses at $19 per month each, totaling $1,900 per month. E3 licenses include certain features and a set amount of storage, but as the company's storage needs grow, these base costs can quickly be overshadowed by additional storage fees.
Extra Storage Costs
Once the initial SharePoint storage provided with the E3 licenses was exceeded, the company had to purchase additional storage. At $0.20 per Gigabyte (GB) per month, the cost for 5000 GB of extra storage amounts to $1000 per month.
Enterprise Mobility + Security E5 Costs
The company also subscribes to Enterprise Mobility + Security E5 for 100 licenses at $14.80 each per month, adding another $1,480 to the monthly bill. This service provides advanced security features, which are essential for a financial company but add to the overall cost.
Data Growth and Compliance
The company's employees create new content daily, requiring access to both new and archived data. Features like versioning, retention, and legal hold for compliance purposes contribute to data growth, which in turn increases the need for more storage.
Total Costs
The combined costs of E3 licenses, extra storage, and Enterprise Mobility + Security E5 licenses result in a monthly bill of approximately $4,280, or over $51,000 annually. This equates to more than $500 per user per year, which can be a substantial expense for any organization. Total costs in this case are based on 100 users.
How do you solve the problem?
To address these high storage costs, enterprises can explore alternative solutions such as:
- Data Cleanup: Regularly review and clean up unnecessary files to free up space.
- Archiving Solutions: Use alternative archiving solutions that may be more cost-effective.
- License Use: Identify and rectify over licensed-users and unused licenses and redistribute correctly.
By considering these alternatives and managing data more efficiently, enterprises can potentially reduce their Microsoft 365 storage costs. However, you may consider an alternative solution to save a substantial amount, especially if you have tens of thousands of users and Terabytes of extra data piling up on top each month.
How M365 Governance helps save money
If you are experiencing out of control storage and costs at scale, I strongly recommend considering adopting a no-code, easy-to-use cloud collaboration governance tool with capacity to handle extremely high M365 storage. Rencore Governance is the only solution meeting this specification.
Specifically, the Rencore Governance SharePoint and OneDrive file scan add-on combined with the unique deep service inventory engine, simple compliance centre, and advanced automations allows you to handle your high data storage and user licenses while putting your cost management on autopilot. Automate collection, reporting, and actions to rectify storage costs today and potentially save millions.
As an extra resource to get you started on your cost-saving journey, download and share our FREE M365 cost-saving checklist and make someone's day a lot easier.
