Office 365

Front matter

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Migrating and Managing Your Business in the Cloud

BEST-KNOWN-METHODS REFERENCE FOR BUSINESS OWNERS AND IT PROFESSIONALS

Introduction

Why Office 365 and why this book? We are cloud solution consultants. Our mission is to make companies more successful through our knowledge of Office 365. We help companies assess, migrate, and manage cloud-based solutions.

Office 365 is a cloud-based service; it is what you know—the Microsoft Office suite. It simply works, plus you do not have to give up your intellectual property to use the service. This is important. Not all cloud solutions are this forthright. Our customers who use Office 365 have significantly reduced their IT services costs and their concerns in the areas of data security, compliance, and discovery.

This is a living book. We approached our publisher with the idea that this book should morph over time. We suggested that a living book could be created about Microsoft cloud services, based on our experience both now and in the future. It agreed.

KAMIND, a Microsoft Tier 1 Champion and a multiyear Microsoft Partner award winner, presents a unique value proposition for our Office 365 customers. Our approach has been to partner with our clients to journey to the cloud together. That experience is reflected in this book and will continue to be.

Join us in this journey to the cloud with Office 365.

Chapter 1-What Is Office 365?

This chapter is focused on why you should move your organization to Office 365. The decision to move to Office 365 is a business, rather than a technical, decision. Like any business change, the objective is to reduce your operational costs and to improve your organization's productivity, to gain a competitive advantage. The chapter ends with a hypothetical customer making the business tradeoffs toward moving to the cloud.

Chapter 2-Using Office 365 and Windows Intune

The best way to understand Office 365 is to experience it. We explore the Office 365 capabilities in a demonstration site, with a focus on how this helps your business productivity. We use a day in the life of a user to demonstrate the capabilities of Office 365. The chapter closes with a reference section on the most common end-user configurations.

Chapter 3-0ffice 365 Planning and Purchase

The secret to a successful migration to Office 365 is picking the correct plan that supports your business. There are three different categories of plans. The key to a successful migration to Office 365 is the planning and purchase process. Once you select a plan, your primary consideration must be to ensure that the migration process is seamless for your organization. This chapter describes the basic purchase information and details the choices. It concludes with information about pre-deployment, deployment, and post-deployment.

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INTRODUCTION

Chapter 4-0ffice 365 Setup and Migration

After you have selected your Office 365 plan and completed the planning process, the next step is the migration process. There are different ways you can migrate to Office 365 and different migration techniques. This chapter covers the most common approaches to Office 365 migration.

Chapter 5-SharePoint Administration

SharePoint administration and design can be simple or complex, depending on your business needs. This chapter provides a basic overview of the configuration necessary to be up and running using the SharePoint team site of Office 365. This chapter describes site design and construction issues and offers an overview of the SharePoint administration functions.

Chapter 6-Building Your Web Site

Office 365 includes a public-facing web site and the necessary developer's tools to build out the site. This chapter takes you from the basic Office 365 site to a fully functioning web site. The Office 365 public-facing web site fulfills the Web needs of 90% of the businesses on Office 365. This chapter describes how to configure and build the public-facing web site for your business, using the integrated Office 365 web site tools and SharePoint Designer, a design tool that is included with your Office 365 subscription.

Chapter 7-Windows Intune Administration

The secret to an optimal Office 365 site is the management of the desktop to ensure that updates are current and that the user antivirus is functioning. Windows Intune is a desktop management tool that addresses these issues, reduces the administrator's effort in desktop management, and improves the user's experience.

Chapter 8-0ffice 365 Administration

This chapter describes the different administration centers in Office 365 and the most common tools that you would use to administer Office 365. Depending on your Office 365 plan, there are five possible administration tools. This chapter focuses on the Office 365, Exchange, and Lync administration centers. The SharePoint and Windows Intune administration centers are described in their own chapters. The chapter closes with how to use PowerShell to manage your Office 365 environment.

Chapter 9-Compliance and Data Loss Prevention

Businesses must now adapt their e-mail document-storage systems to correctly process their electronic communication in consideration of regulatory requirements. The compliance and data loss prevention (DLP) features of Office 365 provide the capability to allow a business to manage its communications and protect against simple mistakes. Office 365 includes integrated discovery that supports legal discovery and audit requirements.

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INTRODUCTION

Chapter 10-Exchange Online Protection Administration

Office 365 is composed of a set of services. The Exchange Online Protection (EOP) service is the front end of Office 365 that handles all the external e-mail front-end processing and filtering. If you have smart devices that e-mail to Office 365, you will use EOP to manage the interaction.

Chapter 11—DirSync, AD FS, Single Sign-On, and Exchange Federation

Active Directory Federation Services and single sign-on is the integration of the Office 365 Active Directory with an on-premises Active Directory. This allows one sign-on (controlled by on-premises servers) to give access to both cloud and on-premises resources. Password Sync can be a simpler implementation that meets many requirements. Federation allows on-premises and cloud Exchange servers to work together.

Microsoft Office 365 releases updates every 90 days. The Authors have committed to updating this book on a similar timeline. The latest updates to this book may be found at www. getoffice365now. com.

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CHAPTER 1 Office 365: Moving to the Cloud

We plan and design for change. After it happens, we plan for the next change. What drives change? With information technology there are many factors—lower cost of equipment, better computing power, greater bandwidth, new software, and so on.

Office 365 is a cloud solution that is having a significant impact on information technology and its role in business. Office 365 represents change—change from the way we used to work to a new way of working. Its proven benefits include lowering the cost of IT services and enabling higher user productivity. Most of us would agree that Office 365 and cloud computing are helping to make our organizations more efficient and more profitable.

The profit factor is a universal driving force for business. Profit generation also drives the information technology function to become more efficient. When times are good, organizations have more resources and there is less pressure on the IT function to become more efficient. However, when a downturn in business happens, IT is frequently the first to suffer budgets cut. The only option is to become more efficient in the use of resources. IT people, whether staff or contractors, are often viewed as “the first to be cut, and the last ones around to turn off the lights.”

Small businesses are particularly sensitive to change. Most do not have the capital to handle long downturns, and many look at IT as an “optional” expense. To combat this perception, many IT partner programs (like the Microsoft Partner network made up of hundreds of independent IT service providers) encourage their partners to become trusted business advisors as well as IT experts. The clear objective is to change the business owner's view of IT from an optional expenditure to an essential investment.

The challenge for IT professionals, whether they are staff or contractors, is to evaluate the business processes and technologies available and apply those that improve business efficiency. Cloud computing is one technology that can make a big difference quickly. Why Office 365? There are three reasons why Office 365 is the choice for businesses.

1. You do not assign your intellectual property rights to a third party to use their cloud service.

2. Itis what you know—Microsoft Office. 3. Microsoft cloud services reduce operating costs and increase worker productivity.

This book addresses these issues. It also outlines a host of business efficiency opportunities that are to be realized with cloud computing and demonstrates how to make this happen. This book is a collection of our Best Known Methods (BKM) and processes. We want to provide you with the knowledge and tools necessary so you can move your business to the cloud using Microsoft Office 365.

Office 365: The New Cloud Challenge

When commercial cloud services were introduced more than 10 years ago, initial prices were high. Products were, admittedly, not mature and robust. This is the case with most innovations. Customer feedback was mixed and there were issues with how services were delivered and what customers really needed or wanted. In the early days of cloud services, internet connections were slow (~56Kbits to 1.2Mbits); today, internet connections are extremely fast

(100Mbits), which leads to a better user experience. Looking at today’s environment, there is a lot of opportunity to fine-tune product services to meet the needs of small businesses in particular. The opportunities for small businesses include the ability to improve worker productivity and reduce (and control) IT operations costs. With this in mind, this book will use examples of integrated cloud migration solutions that we at KAMIND (IT cloud consultants and provider of services for Office 365) have engaged for this tier of user.

Like other companies, over the years Microsoft' has developed an increasingly more complete set of services for businesses—from small (less than 250) to large enterprises with a scalable solution offering. The current Microsoft cloud solutions have evolved from the Microsoft on-premises offerings for the 2007-2013 class of server and application products and Hotmail cloud services offering. Microsoft’s first commercial service was Microsoft’s Online Services (2007-2010), known as the Business Productivity Online Services (BPOS) which included Exchange’, SharePoint*, Office Communicator’, and Live Meeting".

In February 2013, Microsoft deployed Office 365 Wave 15, the third generation of online services. This generation of Office 365 supports client desktop software for PC (Office Professional Plus) and Macs (Mac Office 2011 and later). It also allows installation of desktop software on five devices per user. This is the New Office 365" (see Figure 1-1).

Office 365 Feature Comparison

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Figure 1-1. Office 365 feature set (courtesy of Microsoft)

Customer Segments

When KAMIND migrates customers with fewer than 250 users, our approach differs based on workforce size. We have developed distinct service packages for businesses smaller than 25 end users (be they employees, contractors, or others in the network), 26-75 end users, and 75-250 end users. This helps maintain focus on one of the main deciding factors for small business—cost. It also accommodates growth trajectory, allowing small companies to start small and invest more in cloud IT services only when the return on investment justifies it. These are considerations that KAMIND customers tell us are key to their decision making. Enterprise customers, those with more than 250 users, have different requirements then the smaller clusters, but the needs are very much the same—to reduce ongoing operation costs.

Developing affordable, flexible, powerful cloud solutions has involved a number of interim approaches. Knowing the evolution of today’s IT landscape provides some insight into the current tools available from the major suppliers. For example, prior to 2013, Microsoft served the less-than-75-end-users market with Microsoft Small Business server. Enterprises with more than 75 end users tended to use Microsoft traditional server products such as Windows Server? 2008R2 and 2012. For a short period between 2008 and 2010 Microsoft offered the Essential Business Server (EBS) product family, which was not a good fit for the 75-350 end user market. EBS was designed to provide a graceful path between Small Business Servers (SBS) and traditional Microsoft server products. An EBS Version 2 was under development until it was canceled on March 4, 2010.

The EBS server product offering was one of the first solutions that addressed both on-premises and cloud integration of cloud computing. Its cancelation was a precursor to a change that would be introduced by Office 365. The EBS solution was a three-server solution. It was designed for virtualization and integration of all SBS product features, with remote access and the management tools of System Center essentials. When EBS was aborted, Microsoft lost their leading integrated solution for the 75-plus end user market. This left the traditional Microsoft server products and the Microsoft Online Services to do the job.

The less-than-75 user market has a large set of solutions including Microsoft Home Server', Foundation Server', Windows Server and Small Business Server’. In July 2009, KAMIND made a comparison of SBS, EBS, and Microsoft Online Services to determine the return on investment (see Figure 1-2). The crossover point was identified at about 15 users. In other words, with fewer than 15 users, it appeared to be less expensive to deploy Microsoft Online Services than it is to use on-premises services.

1 Year- EBS2008/SBS 2008 on-site vs. on line Cost (no hardware)

Figure 1-2. 2009/2010 on-site vs. online (cloud) comparison (Intel Case Study, Wimaxforum)

As we moved into 2010 and incorporated March 2010 pricing of $10 per user for Microsoft Online Services, the crossover point shifted to between 100 and 150 users. Microsoft Online Services’ price was at $22.50 per user at this time. The corresponding Office 365 subscription E1 is $8 per user today, demonstrating a 65 percent cost reduction.

So, in March 2010, KAMIND changed its managed services offering to address the new Microsoft Online Services pricing model. We found SBS to be our only option, and it tops out at 75 users. We found that other on-premises solutions were even more expensive.

If we look at the pricing and features of Office 365 today (Figure 1-3), there is no longer a business case to stay on-premises. The cloud-based Office 365 solution is currently the most cost-effective one for any size business. Office 365 today adapts to small one-site enterprises as well as global operations, and it has been growing in size every day. As of late 2013, a reported 69 percent of companies with 20 or fewer employees were using some type of cloud-based IT solution. At the upper end, for example, costs for an enterprise with an on-premises server supporting 1000 users are reduced by 52 percent with deployment of an Enterprise E3 license ($20 per user per month).

On Site Cost versus Cloud Costs

$300

10 20 50 100 250 500 1000 as Onsite Per user = Cloud Per user

Figure 1-3. 2013 Cost comparison of on-site vs. the cloud (no cloud deployment costs included)

Unless there is a compelling reason to use an on-premises solution, currently available IT resources make it more cost-effective to use a cloud service. There are advantages and disadvantages to whichever solution you use, and you need to understand your business requirements and how well a particular IT approach integrates with your business strategy.

Microsoft defines small business as an enterprise with fewer than 250 end users. A few other definitions will be useful at this point. The following terms will aid further understanding cloud migration and how it applies to business:

e On-premises: Software and hardware devices located at a user's physical location. As an example, you may have an on-premises Exchange server handling mail services.

e Off-premises: Often used as a synonym for the cloud, this actually denotes software and hardware devices that are located off-site for which the user of the cloud services has contracted out the physical hardware and software maintenance. As an example, with Microsoft Online Services, the user owns and is responsible for the data, but not the software or the physical server. Microsoft is responsible for backups and server maintenance.

e Cloud: Any cloud service that is maintained by a third party. Examples are Hotmail and Microsoft Online Services called Office 365.

e Office 365: The Microsoft cloud services suite solution supporting collaboration site, dynamic document synchronization, enterprise voice, compliance, Office software subscriptions (Word, Excel, PowerPoint, etc.) for PC and Mac as well as Office productivity subscriptions for Project and Visio.

e Intel Server: The next-generation high-density compute server that supports an integrated SAN and switch control modules. These servers handle virtualization of line of business applications. These servers may be the physical hardware on premises or off premises.

e “Hosted: Any cloud service owned by the user but maintained by a third party. As an example, the user may host web servers on either third-party equipment or customer-owned equipment.

e Virtualization: A server or desktop operating system running on a virtual host. The server or desktop operating systems are run in a hardware-agnostic mode, since the hardware services are supplied by the virtual host.

e Virtual Host: The hosted operating environment that allow virtualization of the operating systems. Microsoft Azure services are examples of a cloud-based virtual host.

All of us who own or run a business would like to increase efficiency and reduce operational costs. It does not matter the business size. What matters is what customers want. Most customers want the businesses they use for services to be competitive in terms of services and price. In order to be competitive, owners want capability at the lowest possible price. As business owners, we make investments and want our businesses to scale, so we can grow the business and generate resources for expansion.

Table 1-1 details an example of the on-premises cost of a business that has 50-250 users. It includes a set of core functions that all businesses have: mail, document storage, web conferencing, and line of business (LOB) applications (such as a payroll application or accounting packages). In this example, the IT costs for a small business with 50 end users are about $269 per user per month. The IT cost for a business with 250 end users is about $67 per user per month. The infrastructure required to support the business is roughly the same. Cloud migration clearly enables IT infrastructure cost reduction. Table 1-2 shows the expected cost for a 50-user company with an on-premises and a cloud comparison.

Table 1-1. On-Premises Infrastructure Costs for 50 and 250 Users (Courtesy of Microsoft) 50 Users Cost (USD) 250 Users Cost (USD)

Hardware and Maintenance $70,413 73,123

Cost per user $

Note Core services costs are provided by Microsoft Online Services.

Table 1-2. On-Premises vs. Cloud Comparison for a 50-User Company On Premises 50 Users Cost (USD) Cloud 50 Users Cost (USD)

Hardware and Maintenance 70,413 0

Cost per user

Note The 250-user company on-premises cost is $67 per user and the cost for the cloud is $30 per user.

When a business moves to Office 365, there are three driving factors. e The business retains ownership of its intellectual property. e Itis what they know (Microsoft Office). e Business productivity increases, and operating costs decreases.

In Table 1-2, note that the cost for a 50-user company drops from $269 per user per month to $92 per user per month. Expand this to a 250-user company and the cost per user per month drops from $67 per user/month to $30 per user per month. This is a cost savings of more than 50 percent. The reasons for this are the following:

e Elimination of in-house maintenance and upgrades to new server software.

e Shortening the time and expense for rollouts of new features.

e Gaining the efficiency of IT services and software features that are usable anywhere. e Reduction in IT operation costs for energy consumption and hardware updates.

Once Microsoft reduced the entry prices for online services to as low as $2 per user per month, it became more expensive to deploy on-premises equipment in virtually every enterprise. The challenge for the IT professional is how to help businesses adapt to change while balancing on-premises and cloud requirements. Our approach with all businesses is to examine the business processes of the company to understand the balance. Once the business processes are known, we examine the steps required to deploy a cloud solution to meet the business needs. This is why the approach to the cloud as a solution is so different than a traditional IT solution. The cloud solution for a business is a business process change that reduces the operating costs of the business and improves productivity.

To assist you in your understanding, we have created a small company called Ready Design Custom Cupcakes (RDCC). We will look at RDCC business requirements and how these requirements compare to on-premises and cloud needs for cloud services.

Ready Design Custom Cupcakes IT Requirements

RDCC has a unique business model as compared to other cupcake bakers. Years ago, RDCC discovered that they could simulate the cupcake design and place the simulated cupcakes of various designs into a virtual environment to gauge consumer reactions. They discovered that cupcakes that were simulated and later baked enjoyed four times the sales of “regular” cupcakes.

RDCC corporate headquarters supports 20 retail cupcake outlets. The IT organization has deployed Microsoft Exchange Server’ 2007 with Live Meeting. The remote locations use Microsoft Outlook! web access, and documents are e-mailed to all franchise owners. To meet the demands of the cupcake design team, the IT organization deploys LOB applications with a clustered SQL Server 2005 to support the cupcake simulation. The RDCC IT infrastructure consists of seven servers: three support the LOB simulation application and four support core operations. The deployment is as follows:

e One server for the LOB with Access Simulation database e One server for Microsoft Exchange Server 2007 with 18 local users and 150 remote web mail accounts e One server for Microsoft Systems Management Server! for application deployment and management e One Microsoft SharePoint} 2003 server e One server running Threat Management Gateway (TMG) e Support of 150 remote mail users with iPhone and Phone 7 e 30 WebEx+ accounts and 25 GoToMeeting} accounts

Strategic Overview

RDCC management wants an IT system focused on supporting the LOB applications rather than supporting commodity software. The IT staff at RDCC has submitted a capital expenditure (CAPEX) spending request to upgrade the aging RDCC servers. RDCC management is seeking alternatives to reduce both CAPEX and operational expenses (OPEX).

RDCC’s corporate objective is to make the organization more agile and increase productivity. Management evaluated one of the online alternatives, Microsoft Office 365, to host their core software. RDCC management summarizes their priorities as follows:

e 100% ownership if the companies intellectual property (IP); no IP rights assignments to use third party services.

e Reduce capital equipment expenditures (CAPEX).

e Reduce operational expenditures with predictable IT costs.

e Workon the business with a focus on market differentiation. e Reduce energy consumption; become more energy-efficient. e Access latest software versions with no server upgrade.

e Achieve the ability to share cupcake recipes with the franchises from the internal document storage site.

The following is a summary of RDCC’s IT management requirements with a focus on determining potential commodity products plus a comparison of them with the various business needs to design a solution addressing both on-premises and cloud needs.

On-Premises and Cloud Resource Requirements

Many different arguments are made to justify keeping servers on-premise vs. moving them into the cloud. They range from control over the data (intellectual property rights) to reducing costs. The secret is to look at the problem from a service level, to differentiate services that provide a competitive advantage from those that are a commodity. In other words, identify the business processes, and look at those processes from an IT services point of view that promotes business growth. Differentiate those capabilities from those that are core to the business, but have no strategic value. Commodity services (those that are not core to the business) move to the cloud.

If a cloud migration is approached correctly, you can achieve both objectives—promoting business and reducing cost for core commodity services. This seems like a simple problem, but it is actually very complex. To help address this, we look at the business from a capability point of view, and we will use that point of view to help us in our decision process.

The following core IT considerations are common to all businesses when viewed from the perspective of an IT solution. When looking at cloud solutions, it helps to look at each distinctive business unit and business processes before deciding what is best for the whole enterprise.

e Core business software

e LOB solutions

e Requirements for on-premises and cloud data

e ~— E-mail utilization and retention

e Network infrastructure

e Desktop support and upgrade

e Information security

e Monitoring

e Budget: CAPEX versus Operational Expenditure (OPEX) e Hosted web site

What IT elements will help sustain competitive advantage? That is the overriding question in each of these categories. Each business is different, depending on of its needs. An obvious example is the e-mail capabilities for business. A few years ago, a business needed to place on-site servers to have ownership and control of their e-mail (intellectual property). This need drove the Microsoft Small Business Server market. Today, e-mail is a commodity, so unless there is a different business need for an on-site mail server, it no longer makes business sense (see Figure 1-3) to manage.

In all cases, it is wise to seriously look at the cloud and the impact on the business. At KAMIND we looked at our customers, from the small five-person law firm to the larger 2,000-employee business. We looked at the impact from a commodity services perspective, and in all cases, we found that the cloud cost at least 50 percent less than on-premises equipment. The only caveat was bandwidth (the ability to transfer large amounts of data at fast speeds to cloud services). If the bandwidth was not available, then it did not make sense to migrate to the cloud.

Core Business Software

What is core software? Core software has many different meanings depending on the business. As an example, in retail businesses, the core software helps manage point of sale and inventory control. In a marketing company, it is e-mail and web conferencing software. An insurance company’s core software will include e-mail and an application for managing the insurance offerings.

Core software products are usually word processing, spreadsheet, and e-mail software. If you add other application software stacks like web conferencing and presentation software, the core can expand, but this can limit an organization’s ability to exchange information with other organizations.

For example, how many of us have e-mailed a Microsoft Word document or a PowerPoint presentation and just assumed that the other party could read the file? The simplest definition you can use for core software is to define it as “those software programs and services that facilitate information exchange.”

Information Exchange

Information exchange refers to the action of exchanging information between multiple parties. Examples include e-mail, web conferencing, document storage/retrieval, and instant messaging. Software that assists the user in handling information exchange includes Microsoft Office, Google Apps, and OpenOffice. The specific tools engaged are a word processing application (such as Microsoft Word), presentation software (such as Microsoft PowerPoint), spreadsheet software (such as Microsoft Excel), and an instant messaging application. The business segment does not matter. The core software product is the standard tool for that segment when information is exchanged. As an example, with RDCC, the simulation tool is not applicable to the marketing segments, but web conference and e-mail are. The core products are the commodity products that are used to conduct business. Core products are drivers for efficiency and cost reduction.

More Ready Design Cup Cakes (RDCC) IT Issues

As noted earlier, RDCC was running on Exchange Server 2007 using ISA Server 2004 as a security server. They were deployed on older Dell servers. In this configuration, RDCC did not have Microsoft software assurance, so all software licenses for the upgrades would need to be purchased. Figure 1-3 shows the current service level breakdown and Table 1-3 shows the deployment cost breakdown for the on-premises and cloud options. The support costs are

not shown, but the IT professionals who handled on-premises equipment support know that management of that equipment would require at least half of an IT professional’s time. Both options are listed in Table 1-3.

Table 1-3. Ready Design Cup Cakes Deployment Comparison

Microsoft Online Services: Office 365

Description Users Service Cost per Deployment Costs One Time Monthly Cost (USD) User (USD) (USD) Cost (USD) Franchise Owner 100 E2 $16 $10 per user $1,000 $1,600 Users 50 E3 24 100 per user 5,000 1,200 $6,000 $2,800

Onsite Server

Description Users Deployment Costs One Time Monthly Average (USD) Cost (USD) Cost (USD) Users 150 200 per user $30,000 $2,500 Server Installation 15,000 1,250 Server Hardware (Intel” Modular Server + 29,392 2,449 three compute modules) Microsoft Software (Exchange + TMG + 49,309 4,109 Enterprise + CAL $123,701 $10,308

The RDCC IT manager reviewed the support requested and proposed a budget of $123,000, approximately $10,000 per month. The IT manager expects this will consume half of the on-staff IT professional time at a cost of about $70,000. RDCC management looked at the cost and requested the IT manager do a comparison against the monthly costs using a subscription (cloud) model.