Microsoft are adding a cut down version of Visio directly into Teams, enabling users to create, edit, and share diagrams without leaving the ever growing central location for productivity. The new app will be available to users with the following licenses:
Microsoft 365 Business Basic
Microsoft 365 Business Standard
Microsoft 365 Business Premium
Microsoft 365 Apps for business
Office 365 E1
Office 365 E3
Office 365 E5
Office 365 F3
Microsoft 365 F3 (includes Office 365 F3)
Microsoft 365 E3 (includes Office 365 E3)
Microsoft 365 E5 (includes Office 365 E5)
Microsoft 365 Apps for enterprise
Office 365 A1
Office 365 A3
Office 365 E5
Microsoft 365 A1 (one-time, per-device license with free Office 365 A1 per user licenses)
Microsoft 365 A3 (includes Office 365 A3)
Microsoft 365 A5 (includes Office 365 A5)
You can see more info, and sign up for early access (not EU), here.
Microsoft’s financial results for Q3 FY21 (Jan – Mar 21) are in and, as usual, they’re pretty impressive.
Revenue = $41.7 billion – up 19%
Operating income = $17 billion – up 31%
Looking at the different product divisions we can see:
Productivity & Business Processes
Revenue = $13.6 billion – up 15%
Office 365 Commercial was up 22%, LinkedIn increased 25%, and Dynamics 365 was up 45%.
Microsoft Teams is up to 145 million daily active users, almost doubling YoY and Office 365 Commercial has nearly 300 million paid seats. Office Commercial products (on-premises Office) was down 25% – continuing its downwards trend as organisations continue to move to the cloud.
Satya Nadella revealed that Power Platform now has almost 16 million monthly active users, an increase of 97%, and revenue has increased by 84%. Amy Hood (CFO) called out Power Apps and Dynamics 365 Finance & Operations as strong performers.
Revenue = $15.1 billion – up 23%
Azure growth was 50% yet again, with Amy Hood highlighting an increase in the number of large, long-term Azure contracts.
On-premises server products grew 3%, although that seems to largely be due to year on year currency fluctuations, and the EMS install base grew again, now sitting at 174 million seats.
SQL Server on Azure VMs grew 129% YoY alongside Cosmos DB growth too.
More Personal Computing
Revenue = $13 billion – up 19%
Again there was a big difference in Windows OEM as Pro revenue declined 2% but non-Pro grew 44%.
It seems Microsoft will be adding some new security and compliance SKUS in February 2021. According to a post from Bytes, a top UK Microsoft partner and LSP, we will soon be able to purchase:
Premium Compliance Assessments
There will be a range of over 150 assessments available which can be added to any Office 365 E5 or Microsoft 365 E5 plan, at a cost of $2,500 per assessments per month.
10-year audit log retention to Advanced Audit
This will enable organisations to retain audit logs for up to 10 years and can be added to:
Microsoft 365 E5
Microsoft 365 E5 Compliance
Microsoft 365 E5 eDiscovery & Audit
Office 365 E5
for $2 per user per month.
Data Connectors to E5
This looks like it will extend Microsoft 365 security and compliance capabilities to 3rd party services such as Slack and Zoom. It can be added to any Office 365 E5 or Microsoft 365 E5 plan and will cost $400 per 500GB of data.
The Data Connectors are, I think, the most interesting. Back in November 2019, Microsoft launched a preview of Azure Arc, which enables organisations to run Azure technologies and policies across other clouds such as Amazon AWS, and this new addition is the same thought process. The first time we saw this was when Satya Nadella opened up Office across Apple and Android – making Office available on those devices enables Microsoft to sell more Office 365 AND reach new customers…customers who may eventually purchase other Microsoft services.
While Microsoft would love everyone in every organisation to use Microsoft Teams, they’re pragmatic enough to realise that will never happen – their competitors’ products will always exist…so why not make some money out of it? 500GB of data isn’t much so that $400 a month will quickly start to become a pretty big number of organisations! It also helps Microsoft retain relationships with these organisations, ensuring they stay updated on respective changes and have reasons to talk – giving the chance for future sales…
I’ll keep an eye for more information and, hopefully, an entry in the February 2021 Product Terms.
3 more Microsoft products fell out of support on October 13, 2020:
Office 2016 for Mac
Exchange Server 2010
If you’re on these older versions, upgrading should certainly be on your roadmap. If not to Office 365, then to a more recent on-premises release. As corporate security becomes an ever greater focus, and ransomware becomes an ever greater threat, now is not the time to be running unsupported software that’s over a decade old!
The changes for access to Office 365 have kicked in too, meaning the only releases of Office that are supported to access Office 365 are:
Microsoft 365 Apps (formerly Office365 Pro Plus)
While Microsoft aren’t proactively blocking older versions, they’ve stated that as they fall further behind, performance and/or reliability issues may start to occur.
As I think most of us expected, Microsoft’s strong financial results continued in Q1 FY21.
In July – September 2020, Microsoft saw:
Revenue up 12% to $37.2 billion
Operating Income up 25% to $15.9 billion
Net Income up 30% to $13.9 billion
Operating Expenses grew by 10% (primarily driven by investments in Azure)
This is a fantastic performance as Microsoft – unlike many of their rivals – continue to grow and thrive during the COVID-19 pandemic. While IBM, Oracle, and SAP are all reporting lacklustre numbers – Microsoft are doing very well. This is mainly due to Microsoft’s wide and varied portfolio – if you don’t want one thing, there are plenty of others they can sell you – but also due to the relevance of their product line-up.
Not only are Microsoft 365 and Azure hugely relevant right now, so are products like the Power Platform and Dynamics 365 as they enable new ways of working and digital transformation. This is a strength many of their competitors don’t have – if you don’t want to buy a big database or an ERP system, that dramatically reduces the options for Oracle & SAP for example.
Office 365 commercial revenue was up 21%
Dynamics 365 again grew by 38%
Azure saw another quarter of 48% growth
LinkedIn was up 16%
Surface revenue rose 37%
Enterprise Mobility & Security install base has grown to 152 million+ seats
On the flip side – Office Commercial was down 30% showing the move away from on-premises perpetual to cloud-based subscriptions continues apace.
Microsoft also called out “continued weakness” in transactional licensing as they saw a 1% drop in “server products” revenue. To be honest, I’m surprised it isn’t a bigger drop than that…
Another drop in Windows Pro OEM sales (22%) while Windows non-Pro OEM grew by 31%. This will partly be due to organisations de-prioritising laptop refreshes right now but also, I suspect, by users working from home buying themselves new “work” devices. That latter aspect opens up some licensing issues – as volume licensing Windows licenses generally can’t be applied to Windows Home licenses.
Microsoft are in a very strong position and it’s further proof that Satya Nadella has overseen one of the greatest corporate turnarounds for a long time!
Microsoft Office 365 Audio Conferencing Extended Dial Out for US and Canada is an add-on license that offers “virtually unlimited” calling minutes for North American users. Although subject to a fair use policy, users with this add-on won’t deduct capacity from their organisation’s pool or Communication Credits.
The license is available via EA/EAS, EES, CSP, and via the web for commercial, Edu, Non-profit and US GCC customers. I haven’t seen pricing info yet but you can see a little more info from Microsoft here.
Microsoft had, as expected, a great Q4 with revenue up 13% to $38 billion, which closed out an equally good fiscal year. Overall revenue of $143 billion, and operating income of $44.3 billion, was driven by revenue increases in all Microsoft’s key areas:
Office 365 was up 19%
Dynamics 365 was up 38%
LinkedIn increased by 10%
Azure was up 47%
Although the Azure growth was lower than previous quarters, it still seems healthy enough for now.
Microsoft called out some interesting points during their earnings call, some of which give a good indication of future direction including:
Slowdown in transactional licensing and flat on-premises server revenue: While this may be down, at least in part, to the impact of COVID-19 – it is also where Microsoft are heading. This is also shown by the fact that Office Commercial (on-premises Office) was down 34% -which Microsoft attributed to a combination of COVID-19 and the move to annuity licensing.
As long as those transactional licenses and on-premises server software are being replaced by CSP, Microsoft 365, and Azure – Redmond will be happy. I’ll be keen to see if this numbers start to rise again as the economic situation stabilises.
Bigger, longer Azure contracts: They stated “material growth” in Azure contracts over $10 million which is good news for Microsoft. For everyone in this new subscription based world, locking customers in to longer term deals is a key aim as it makes it easier for the vendor to forecast and budget.
Increased ARPU for Office 365: Average Revenue Per User (ARPU) is a key metric for many of today’s organisations and an increase means Microsoft are making more money per user. This could be as they upgrade to higher level plans (E3 to E5 for example) or purchase add-ons to their existing licenses. The Office 365 seat count increased and the ARPU increased, which are both positive for Microsoft.
All in all, a very positive performance from Microsoft that clearly shows their focus on cloud continues to pay off. Looking ahead to this financial year, FY 21, I think we’ll see more focus on E5 – particularly for security and voice workloads, Power Platform continuing to appear in new places, and increased pressure on those organisations looking to remain on-premises.
Microsoft are changing the Office 365 update models again!
1) They’re introducing the “Monthly Enterprise Channel” – for orgs who want new features each month but with “added predictability, insights and control”…although the insight and control elements won’t be available until later in the year.
This was available as of May 12th, 2020.
2) June 9th sees name changes for the update channels (old name –> new name):
Insider –> Beta Channel
Monthly Channel (Targeted) –> Current Channel (Preview)
3) June 9th will also see the default update model for Microsoft 365 Apps for Enterprise (aka Office 365 ProPlus) on NEW tenants switch to Current Channel, rather than Semi-Annual Enterprise Channel. Existing tenants won’t change.