Claims company makes more revenue and profit per user with Office 365
Speaking at the Oppenheimer Annual Technology, Media & Telecommunications Conference earlier this week, Microsoft investor relations GM Bill Koefoed did his best to explain how his company’s Office 365 cloud service can be sweet deal for customers and investors alike.
From a story by my Network World colleague Jon Brodkin:
“Within an enterprise, let’s say it costs $15 per user per month today to run Exchange, and that’s about $2 for Microsoft, and that’s $13 in rent, power, the database administrator that’s running the thing, the hardware and all the kind of services that are associated with kind of running Exchange in your premise,” Koefoed said.
“With Office 365, or with Exchange Online, the Exchange part of that, we charge $10 per user per month,” he continued. “So, that ends up being a savings to the CIO of roughly 33%, and we make 5X more revenue and our profit ends up being somewhere, $3 or $4 per user per month. So, we make more revenue and we make more profit and we save our customers money.”
As Microsoft attempts to attract enterprises to Office 365, it will be interesting to see how that story and those margins scale.
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