Learn how the New York City Department of Environmental Protection (NYC DEP) used Nerdio Manager for Enterprise to move 2,000 employees to remote work in a matter of days–90 percent faster than it could have using VPN connections (and without the need for new hardware).
About New York City Department of Environmental Protraction (NYC DEP)
New York City Department of Environmental Protection (NYC DEP) is the agency responsible for moving fresh water in and storm and wastewater out. It also maintains miles of underground pipes and the ecologically rich above-ground drainage systems that naturally handle runoff precipitation from streets and sidewalks. With 9 million residents, the Big Apple is a teeming metropolis. Spread across islands and mainland, the city’s boroughs are connected by bridges, tunnels, and ferries. Moving people across this unique geography is a big enough undertaking for such a populous city. Still, an even more essential job is delivering the 1 billion gallons of fresh drinking water New York City’s residents require every day. That’s water for everything from bathing to baking world-famous bagels and pizza.
Commitment to Virtualization
When COVID-19 hit in 2020, the New York City Department of Environmental Protection (NYC DEP) used Nerdio Manager for Enterprise to move roughly 2,000 employees to remote work in a matter of days—90 percent faster than it could have using VPN connections (and without the need for new hardware). NYC DEP also used Azure Active Directory Application Proxy and Azure Application Gateway to provide more secure remote access to internal applications with multi-factor authentication.
An agency with 19 business units and roughly 5,600 employees, NYC DEP’s scale and scope is huge, and its IT department must support field operations around the clock. Farhan Abdullah, Director of Production Support Services at NYC DEP, says, “Whether it’s water treatment, water supply, or sewer operations if a water main breaks day or night, the IT department is responsible for making sure apps and other resources are up, running, and available.”
To support around-the-clock operations, the IT department runs multiple data centers across the city’s five boroughs, and it continually reassesses how to provide seamless disaster recovery and broad scalability. As part of this strategy, NYC DEP was an early proponent of virtualization and cloud services, and it has stayed true to this commitment. Michael Shum, IT Chief of Staff at NYC DEP, estimates that the agency has moved 40 percent of its workloads to the cloud, with more moved there every day.
“We used Azure Virtual Desktop to provide highly secure remote access 90 percent faster, to 90 percent more employees, than we could have with our legacy systems.” – Cecil McMaster: Deputy Commissioner for Business Information Technology, New York City Department of Environmental Protection.
NYC DEP had relied on Microsoft Azure services for years, since the days of Microsoft Virtual Server. By early 2020, employees used cloud tools like Microsoft Office 365 business productivity apps, and IT staff managed identity and access with Azure Active Directory (Azure AD) Premium. About 2 percent of the agency’s employees worked remotely, using company-issued devices and a VPN connection to sign into an internal portal. The agency wanted more than VPN could offer—faster connection speeds, more robust scalability, and multi-factor authentication to secure employees’ credentials.
The Shift to Remote Work
In March, when NYC DEP had to switch about a third of its employees to remote work in response to COVID-19, it saw Nerdio Manager for Enterprise as a natural choice for improving remote access because of the agency’s prior investment in Microsoft products.
IT staff faced a challenge in bringing on 2,500 employees unaccustomed to remote work. The sudden influx of connection requests also slowed the internal portal’s performance significantly. Despite the obstacles, NYC DEP deployed Azure Virtual Desktop in a matter of days.
To accelerate adding user accounts on the back end, IT staff deployed Nerdio Manager for Enterprise—a service that empowers IT professionals to automate, optimize, and secure Azure Virtual Desktop deployments. This saved a significant amount of time, reducing a four-and-a-half-week task to just three hours. Nerdio also provides a centralized management interface from which IT staff can quickly troubleshoot access issues.
“With Nerdio Manager for Enterprise, we were able to access a list of all our employees and add them with a click.”– Vic Kayharee, Cloud Engineer for the Business Information Technology at NYC DEP.
Cecil McMaster, Deputy Commissioner for Business Information Technology at NYC DEP, says, “If we’d had to provide remote access strictly through VPN connections to on-premises resources, we would only have been able to offer maybe one-tenth of the access and performance. We used Azure Virtual Desktop to provide highly secure remote access 90 percent faster, to 90 percent more employees, than we could have with our legacy systems. Having a dynamic virtual infrastructure that we can configure without having to procure hardware or worry about storage and memory gives us flexibility.”
If we need to add another 50 people, we can do that by clicking a button. – Cecil McMaster, Deputy Commissioner for Business Information Technology at NYC DEP.
Improved Capabilities with Some Help From IT Partners
Using remote, highly secure Microsoft data centers, NYC DEP provides IT infrastructure resiliency and scalability faster to support its employees. Shum says, “We can stand up a new application with Azure services in 90 days versus one to two years, because we don’t have to go buy a server. We no longer have to put in a requisition to get the capital, or worry about government budget cycles, where you’re budgeting a year out.”
NYC DEP credits support from Microsoft and Nerdio Manager for Enterprise with helping it get through a demanding transition period. Shum says, “I give kudos to Microsoft and Nerdio for supporting us nights, days, and weekends as we moved to remote work. Their investment in us, in this collaboration, got us to the point where we felt comfortable with the Azure Virtual Desktop solution. Getting this project done during COVID-19 was hectic, but we got through it together.”
Remote Work With Greater Scalability, Flexibility, and Security
With VPN, the agency relied on antivirus software installed on employee computers. But, says Shum, “With Azure Virtual Desktop, we manage the antivirus software ourselves, so we can ensure compliance and keep devices updated—as opposed to making sure every single endpoint has the most current protections installed.”
NYC DEP appreciates that employees now have the flexibility of using their personal devices to remotely connect to agency resources, regardless of operating system or endpoint security software. As McMaster points out, agency-secured laptops are scarce due to sudden demand, and many agencies across the country can’t offer remote work options due to device sourcing issues.
Azure Virtual Desktop also supports the agency’s security needs. Abdullah says, “We are comfortable making legacy on-premises apps available through Azure because we can apply Azure AD conditional access policies based on location, device, time of the day, and so on, along with multi-factor authentication.”
IT staff use Windows 10 multi-session with Azure NetApp files to create roaming profiles with Azure Virtual Desktop. With Windows 10 multi-session, they can deliver a full, scalable Windows 10 desktop experience with virtualized Microsoft 365 apps that run in multi-user scenarios, without needing any additional gateway servers. Kayharee says, “We can publish as many host pools as we need to accommodate our workloads. We only need 21 hosts for about 1,000 employees, instead of procuring a machine for each individual. And in terms of security, we only have to manage 21 hosts to make sure they have the latest security updates installed.”
Sharing Lessons Learned and Looking Toward the Future
Today, NYC DEP is getting requests from fellow agencies around the country to share its success story. As of December 2020, a handful of agencies have started using NYC DEP’s suggested best practices and planning approaches.
Abdullah says the experience of taking advantage of the latest features in Azure Virtual Desktop, like faster deployment capabilities, simplified management, and improved security, inspired NYC DEP to consider replacing its desktop computers with a virtual environment. That way, employees will have the same desktop experience whether they work on-premises or remotely. Next, the agency plans to use Azure Log Analytics for native monitoring and alerting, instead of PowerShell commands, and Azure AD Groups to grant access. This will allow NYC DEP to streamline user access based on groups rather than a per-user basis.
“We can stand up a new application with Azure services in 90 days versus one to two years, because we don’t have to go buy a server. We no longer have to put in a requisition to get the capital.” – Michael Shum: IT Chief of Staff, New York City Department of Environmental Protection.
Download the application today from the Azure marketplace and begin a free 30-day trial: nerdio.co/nmw.
Learn how a global enterprise organization deploys, manages, and cost-optimizes Azure Virtual Desktop company-wide with Nerdio Manager for Enterprise quickly and easily.
About Kaplan
Kaplan is a global provider of educational and career services for individuals, schools, and businesses. Founded in 1938 in Brooklyn, NY as a test prep company, Kaplan now has operations in nearly 30 countries and serves one million-plus students and thousands of educational and corporate clients. It’s known for expanding access to education and pioneering digital learning technologies. In addition to prepping students for high stakes exams, Kaplan offers undergraduate and graduate degrees and helps universities enroll new international students, build online programs, and create new career readiness programs for students.
Kaplan’s Metis business is a leading provider of data science skills training for individuals and businesses. Kaplan is also a leading provider of professional instruction for licensing exams for attorneys, physicians, and nurses. Kaplan’s IT team works constantly to ensure access and productivity for all its users.
The Situation
Responsible for all end-user computing for Kaplan, the Technology Services team is comprised of desktop services, desktop engineering, service desk and identity and access management for Kaplan’s teams throughout North America. In particular, the desktop engineering portion of the team maintains their complex and vital virtual desktop environments.
The use of virtual desktops has been part of Kaplan’s business continuity blueprint. The IT team’s goal is to keep widely dispersed users running despite myriad complications, natural disasters, power and connectivity or other technical issues.
The COVID-19 pandemic caused a substantial increase in the number of users needing to work from home in a secure environment. From the onset of public health restrictions in March of 2020, Kaplan’s IT team prepared for the challenges to come by seeking options for secure remote work. This need for flexibility also necessitated rapid deployment of a scalable technical solution. “We had to fast-track the ability for people to work from home in a secure environment, so we scaled up virtual desktops,” said Chad Marino, Executive Director, Technology Services, Kaplan North America.
This included the remote use of company-issued laptops connecting to Kaplan resources through a VPN or virtual desktop. The company’s call center -which primarily used on-premises desktops– were able to use personal computers through virtual desktop technology.
The Solution
When IT leadership was looking for the best way to implement its virtual desktop plans, they reviewed several alternatives, including Microsoft Azure Virtual Desktop (AVD). As a Microsoft Azure customer, Kaplan knew that AVD was well-suited to their needs. While very familiar with its usability strengths, the team was also focused on managing costs. The ability to easily scale to the users’ peaks and valleys was an important factor in this regard.
In choosing the most effective solution in terms of AVD deployment, management, and cost-optimization, Kaplan reviewed many options. With recommendations from Microsoft, combined with their own research, the Kaplan team held a “bake-off” pitting Nerdio against a similar product on the market.
“We were blown away by Nerdio Manager for Enterprise’s capabilities in our demo. Our internal team was excited to show off all it could do,”– Chad Marino, Executive Director, Technology Services, Kaplan North America.
The Results
Nerdio Manager for Enterprise has exceeded expectations as Kaplan’s chosen solution. Its enterprise-level features supply the automation, management, scalability, and cost optimization that are critical to the virtual desktop initiative at Kaplan. Nerdio offers keen insight into how the system is working: how many users are connected, statistics around CPU utilization, latency, and login times, which are all extremely valuable as the Kaplan team manages the enterprise’s virtual desktop environments.
“From a pain-point perspective, Nerdio Manager for Enterprise’s auto-scaling is a key functionality. We couldn’t have done what we needed to do without that,” Marino said.
“We’ve never had the kind of visibility we get with Nerdio,”– Chad Marino, Executive Director, Technology Services, Kaplan North America.
“Our Nerdio team has been great as we continued our evaluation and we scaled this out to a large number of users,” according to Marino. “We wanted to make sure it could do everything we needed; solid automation without administrative headaches. And again, the cost was so important. We wanted to make sure we could turn on machines when we needed them and turn them off when we didn’t – without the constant involvement of our IT team,” he continued.
Nerdio Manager for Enterprise can save enterprise organizations up to 75% on Azure compute and storage costs through its advanced auto-scaling capabilities. Download the application today from the Azure marketplace and begin a free 30-day trial: nerdio.com/nerdio-manager-for-enterprise
In this white paper, we will talk about five key reasons to consider Azure Virtual Desktop (AVD) as a fantastic solution when approaching these challenges.
Cost control and Azure Resource optimization are important parts of building out your cloud practice in Microsoft Azure. In other words, you don’t want to waste any money and need to be using your Azure resources in the most efficient way possible in order to increase your overall margin. This article will highlight a couple of ways that will enable you to save on Azure list pricing and optimize Azure Resource usage.
Since this is meant to be a practical guide, we’ll go over each item one-by-one. Some tips will have a direct impact on the list price, as the title implies, while others will help you get your Azure resources running more efficiently. This means you won’t save on list pricing per se, but you will get more out of your Azure Resources and thus spend less as a result.
1. Becoming a Director Indirect Cloud Solution Provider (CSP)
This might not come as news to some of you, but there are still a lot of MSPs who are not aware of the CSP program and the additional (financial) benefits it has to offer. Trust me, it’s worth looking into if you haven’t done so already.
Being a CSP will not only make it easier to transact Azure (i.e., create customer subscriptions), but it will also allow you to increase your margin by receiving a discount off Azure list prices via your CSP Provider. You will also be eligible for various incentives that Microsoft makes available to their CSPs based on their growth objectives.
These incentives are incremental to the discount you’ll receive on Azure consumption and can be in the 10% range, or more, when added up.
There are two types of CSPs: Direct CSPs and CSP Resellers. Direct CSPs purchase Azure directly from Microsoft but are required to maintain high consumption volume and need to overcome various qualification hurdles.
CSP Resellers purchase Azure through an Indirect CSP Provider. These CSP providers are large distributors that help CSP Resellers understand Azure, its pricing, and billing. Any MSP can become a CSP Reseller without any volume commitments or certification hurdles.
Have a look at the below discount overview. Note that these numbers (might) change overtime and we can’t guarantee the exact percentages displayed.
Direct CSPs and CSP Resellers are eligible for the following benefits:
Azure consumption discounts: 7%-15%
Azure Reserved Instances (more on this below) discounts: 1%-5%
CSP software subscriptions (more on this below) discounts: 5%-15%
Office 365, Dynamics 365, and Microsoft 365 discounts: 10% – 20%
Local, regional, and other accelerators (i.e., rebates): these vary by year and Microsoft priorities. Some are available to Direct CSPs only.
2. Choosing the Right VM for the Job
Another advantage of using Cloud resources is having a choice, and lots of them.
Within almost all regions globally, you can choose to work with dozens if not hundreds of different services – virtual machines being just one of those services. VMs come in various shapes and sizes, also known as families. In short, for every type of workload out there you will be able to find a VM type/size to go with it.
When sizing your Azure virtual machines, be cautious when copying the specifications of your on-premises (physical and virtual) machines. These are often oversized for their purpose; a problem you won’t have with cloud-based VMs. Even if you pick a small size, to begin with, perhaps even too small, they can always be re-sized later within minutes. This ensures that you’ll make optimal use, or close to it, of the compute and storage resources available without paying for additional “reserved” capacity you probably won’t need during the first year or so.
By the way, services like Azure Migrate (migrate existing on-premises virtual machines to Azure) can help with the above as well. Azure Migrate supports Hyper-V and VMware virtual machines and will help you to pick the correct VM size depending on various statistics.
3. Microsoft Azure Promos
[Offer has ended.]
More information can be found on the Microsoft website here.
4. B Series Machines
B-series VMs are known as “burstable” VMs. They are used for non-CPU intensive workloads (domain controllers, file and web servers, for example) and cost about 50% of an equivalently sized Ds-series VM (often used within Azure Virtual desktop environments). The reason they are cheaper is because Azure imposes a quota on how much of the total CPU cores can be used. This quota is usually a fraction of the total available CPU.
Every second that the VM is using less than its quota, it is “banking credits”. These banked credits can be used to burst up to the total available CPUs when needed. While bursting, the VM is consuming its banked credits. Once credits run out, the VMs CPU-utilization is throttled down to its pre-defined quota.
For approximately the same price you would pay for a Ds-series VM, you can get a B-series with double the CPUs and double the RAM. But again, use them for non-intensive CPU workloads only.
5. Ephemeral OS Disks
We also want to highlight the use of Ephemeral OS disks, which are especially interesting if you are running stateless, or “non-persistent” workloads.
Ephemeral OS disks are a form of stateless disk storage. They are created on the virtual machine’s local storage (as part of the available VM cache, read on below) and are not written/saved to Azure Blob storage. This makes them ideal for stateless workloads, providing lower latency and thus faster read and write times. As always, there are multiple pros and cons to consider.
To start with a big pro, they are free!
You are not charged for storage costs. Though, keep in mind that the Azure compute used as part of the VM that the Ephemeral disk is part of will still cost you money – nothing new there. If you have any other disk types attached to the VM, you will pay for those as well.
Another important thing to note, and one of their biggest drawbacks is that Ephemeral disks cannot be stopped/deallocated. Restarting is supported. However, when combined with the auto-scale engine built into Nerdio Manager for Enterprise or Nerdio Manager for MSP, that problem goes away almost completely. Our advanced and patented auto-scale engine can easily create new VMs from scratch within minutes, pre-stage machines, monitor and auto-heal VMs, and completely remove and deallocate virtual machines when they are no longer needed.
In other words, you get the best of both worlds!
6. Azure Hybrid Benefit and CSP Software Subscriptions
Comparing costs between Cloud based resources like a virtual machine, for example, and buying a physical server can be tricky. There’s a lot to consider. People often look at the monthly cost of an Azure VM, multiply it by 36 to get its three-year cost and conclude that it is much more expensive than buying a server.
What most don’t realize is that the pay-as-you-you-go list price of a VM includes in it the “premium of optionality” (i.e., you can turn it off at any time and stop paying) and a subscription to the Windows Server operating system.
Also, you need to take into account the flexibility that this model offers. Machines can be shut down, deallocated etc., meaning you will instantly pay less or nothing at all. Spinning up a new machine will take you minutes instead of hours/days and you’ll always be able to find a configuration that will fit your use-case. What a about resiliency, instant scalability, and there’s more to consider.
By reserving the base compute and bringing your own license for the operating system, the cost of the VM drops by 80%!
Microsoft has created a special entitlement called Azure Hybrid Benefit usage (AHB) that allows MSPs to pay for the Windows Server operating system via another licensing program and not through Azure. AHB is a benefit unique to Azure. You can’t bring your own Windows server license to AWS or GCP, for example. The cost of a VM in other public clouds will include the cost of the license, even if you already own Windows.
AHB can be enabled on a per-VM basis (easily done by using an automation platform like Nerdio, all at once or one by one) in the Azure portal. Turning it on stops the Windows OS billing meter and the cost of the VM becomes lower. How much lower? That depends on the VM family but can be up to half of the VM’s cost.
7. Azure Reserved Instances
The cost of Virtual Machines (VMs) in Azure is the single biggest component of a typical MSP’s IT environment. Therefore, focusing on reducing this large consumption component is where we’ll start. The savings can be significant.
Reserved Instances are reservations of a specific type of compute capacity (i.e., VM family/series) in a specific geographic location (i.e., Azure region) for a predefined period (12 or 36 months). Depending on the VM family, duration of the reservation, and region, these RIs can save you from 20% to 57% relative to the list pay as you go (PAYG) price. The trade-off is that you have to commit to the reservation in advance for an extended period of time — 12 or 36 months. This is great news for MSPs because typical IT workloads they deploy in Azure on behalf of their customers are persistent and customers are generally open to making one or three-year commitments. No customer wants to move an IT environment from one cloud to another every month!
The good news is that RIs can be paid for monthly as well.
RIs can also be exchanged without any fees or penalties. Any unused portion of an RI will be applied as a credit towards the purchase of a new RI for a different family, in a different region, or both.
Even if you want to cancel an existing reservation, you can. However, there is a cancellation fee. The cancellation fee is 12% of your purchase price. The unused portion of your reservation will be refunded to you minus the 12% cancellation fee. There are some limitations to this on an annual basis. For example, your cancellations cannot exceed $50,000 in a year. Cancellation fees apply to both upfront paid reservations and those that are paid for on a monthly basis.
8. Use Auto–Scaling to Lower Your Azure Compute and Storage Costs Significantly
The cloud is famous for its pay-per-use model. This sounds like a dream come true and it is a great concept for sure. However, taking advantage of this is not as easy as it sounds. You need to have a mechanism in place that can constantly monitor what is going on within your environment and act accordingly. It needs to be able to stop and start machines in a flexible manner, and not “just” on set times, build new machines completely from scratch, and throw those same machines away when they are no longer needed.
Workloads need to be resized from time to time and systems need to be monitored for health so that proactive measures can be put in place when applicable. And what about keeping your Active Directory clean when it comes to machine names and objects, for example? Those need to be taken care of also.
What if we could resize machines to a smaller (cheaper) version during night-time? It would still be available but will cost a lot less regarding the underlying Azure compute and storage resources. That, times the number of machines you manage, can lead up to significant savings. Or have machines completely shut down, drained from the user first while also notifying them beforehand. Of course, in a perfect world, we would all have access to something like this.
This is exactly what Nerdio is capable of. In fact, you will save up to 75% regarding your underlying compute and storage resources while keeping your users happy because it won’t affect the overall user experience.
9. Final Notes and Various Tips
Next to the above, keep in mind that there are also price differences per Azure region. When storing large amounts of archive data, it might make sense to store it outside of your own region to save on costs. And there are more examples, of course.
Tagging your resources in Azure (or directly from within Nerdio Manager for Enterprise or Nerdio Manager for MSP) can help to track resource usage and thus the associated costs. Azure also offers various options to monitor your spending and other ways of cost control by setting budget alerts, for example.
The use of Management Groups to govern your underlying subscription as part of your tenant is another way to make sure things don’t run out of control. Applying policies, which can be set on a subscription level as well, can help with controlling what can be configured where. As an example, maybe you only want virtual machines to be created within your own region and block the use of other regions.
Hopefully, this post has provided you with some insights on how to take full advantage of all that can be done to lower (and monitor) costs and optimize overall Azure usage and cloud resources in general. While this may seem like a lot of information at once, if you take your time and handle these topics one by one, it will be well worth your trouble.
Learn how LexisNexis consolidated a variety of incompatible environments and siloed work into a single, cohesive solution using Nerdio Manager for Enterprise.
About LexisNexis
LexisNexis is a leading global data analysis and information provider that offers platforms to help legal, corporate, government, and nonprofit clients better understand their markets and audiences. They also increase accessibility to legal and journalistic documents. With over 10,000 employees worldwide and customers in 160 countries, LexisNexis IT professionals manage a lot of moving parts every day.
The Situation
Because LexisNexis was split among multiple uncooperative environments — including RDS, VMWare ESX, and Citrix — the company was overloaded with frustrating and inefficient processes that were costing them a lot of money. LexisNexis needed to simplify their system and save on costs, and their research showed that migrating to Azure was the best way to do both those things.
The Solution
LexisNexis engaged Coretek to design a Citrix Cloud-compatible solution using Azure Virtual Desktop (AVD), and Coretek recommended Nerdio Manager to facilitate the migration. Nerdio was able to work with the customer to deploy a pilot program to a few hundred users, running Azure alongside Citrix Cloud, within just a few days. After the successful pilot, Nerdio’s auto-scale function made it easy for LexisNexis to extend the solution to thousands of users.
The Results
LexisNexis now runs Nerdio Manager across their organization, enabling synchronicity and consistency and resulting in a 50% year over year cost savings. This new streamlined system has eliminated the need for expensive onsite infrastructure, solved the confusing multi-software departmental billing issues, and reduced their overall software costs.
“LexisNexis now runs Nerdio Manager across their organization, enabling synchronicity and consistency and resulting in a 50% year over year cost savings.”
LexisNexis is currently hosting several thousand users on AVD, and with Nerdio’s help, their administrators are managing the day-to-day operations easily and efficiently, with about a 75% decrease in support needs. Most importantly, the performance of their infrastructure has improved significantly: LexisNexis’s former solution was rated at 35/100 and Nerdio Manager is running at above 90/100.
“LexisNexis’s former solution was rated at 35/100 and Nerdio Manager is running at above 90/100.”
Learn how Grant Thornton LLP, the sixth-largest accounting organization in the U.S., tackled a complex migration to Azure Virtual Desktop with the help of Nerdio Manager for Enterprise — their very own “Easy Button” for a challenging software.
About Grant Thronton LLP
Grant Thornton LLP is one of the world’s largest accounting and advising firms, with over 8,500 employees, 550 partners, and annual revenue of nearly $2 billion in 2019. Founded in 1986 and headquartered in Chicago, IL, Grant Thornton LLP has 51 offices in the U.S. and hundreds of member firms across the globe.
The Situation
Grant Thornton LLP worked with a team of overseas developers, who needed access to the business’s files and data via a secure connection, to maintain compliance within U.S. regulations. The company had already decided to migrate to Microsoft Azure, but the environment was too complex for them to do it alone — they needed a knowledgeable partner to help them onboard. Their first step was to run a test case, migrating a limited number of users to Azure to prove out the technology and make sure it was going to be a fit.
The Solution
Nerdio Manager provided Grant Thornton LLP with the “Easy Button” they were seeking, making AVD management painless and intuitive where before it had been inaccessibly complicated. Nerdio helped the company set up their AVD environment in just a few days, enabling them to test Azure with Nerdio Manager and get a feel for its value, which was illustrated immediately: with Nerdio, the company is saving $20,000 a month on computing and storage fees. The Results
Not only did Nerdio Manager for Enterprise enable Grant Thornton LLP to onboard a new, complex system quickly and easily, but they also empowered them to provide their overseas developers with access to company data while allowing them to “lock down” the desktops for better security. The company is saving $20,000 a month by using Nerdio Manager; with 330 concurrent users, their spend is now under $3,000. The value of the Nerdio partnership is so clear that Grant Thornton LLP is now looking for opportunities to expand to more user cases on a global level. At the moment they have three countries with their own Nerdio instance, and are actively seeking more.
Global Legal Services Enterprise Agency Migrates to Microsoft Azure and Saves Thousands Per Month with Nerdio Manager for Enterprise
About Epiq
Epiq is a global provider of legal services, serving law firms, corporations, financial institutions, and government agencies. They help customers take on large-scale, complex legal tasks and streamline the administration of business operations, class action and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters.
The Situation
EPIQ Legal Document Review—Changing with the Times
As a trusted provider of legal services, Epiq works with data that is important, private, and sensitive to its customers. Counted on to handle the legal eDiscovery process for its customers, Epiq must be sure its data is accurate and secure.
Epiq’s legal eDiscovery model helps legal clients, law firms, corporations, government agencies, and others to manage their data and have confidence that the information they have, puts them in a position for the best possible legal outcome.
The sheer volume of sensitive information handled by this enterprise organization is daunting, so costs must be carefully managed, and a large, flexibly sized team needs the right virtual and remote tools to properly complete their tasks in an efficient manner.
Business Needs
Solve the challenges associated with connecting and managing a large, remote, and constantly changing eDiscovery review team
Give that team the tools and job-flexibility that the new virtual environment demands
Overcome the technical challenges associated with security and confidentiality
Control associated Microsoft Azure costs
Epiq’s document review services staff count fluctuates frequently based on customer demand. Historically, these team members worked in brick-and-mortar facilities. Epiq was already moving to a more flexible work model, even before the seismic changes brought on by the COVID-19 pandemic. The task was brought into sharp relief: implement a way for the team to work from geographically distributed locations, with users logging into a virtual desktop environment to perform eDiscovery documentation. Their proof-of-concept project with Microsoft’s Azure Virtual Desktop (AVD) revealed that the native auto-scaling in the product was difficult to control, and they needed to explore alternatives to lower costs. The Microsoft team recommended a potential solution; Nerdio Manager for Enterprise.
Epiq’s Document Review Services (DRS) team can onboard and serve hundreds of client document review projects in a year. Usability, flexibility and scalability are key attributes for their technology partners. As team members move quickly from project to project and task to task, Nerdio Manager for Enterprise enables their tech support to keep pace. “Nerdio helps the entire DRS business unit be more
The Solution
The Need for Speed – From Proof of Concept to Implementation
Already moving toward a flexible, virtualized environment, the Epiq team was prompted by the business realities of the COVID-19 crisis. They needed to move quickly, but intelligently, forward with their initiatives. Nerdio became their partner in adding speed and efficiency.
“We were already going down that route, taking things into the cloud, doing document review, hosting virtual machines. COVID forced us to do it immediately,” said Wright.
Although Epiq was initially skeptical of bringing in a third-party solution, the Nerdio team put any anxiety away in short order. “We were really impressed by how easy it was to set up and administer. Especially the auto-scaling functionality,” said Wright. “The Nerdio team really helped us understand what would work best for our use case.”
“The biggest takeaway from all this is how Nerdio helped us increase efficiency and decrease cost in the wake of COVID. It was quick and easy to identify how Nerdio helped us. Looking back, we wish we had pulled the trigger on Nerdio sooner.”
– Drew Wright, Senior Manager of Information Technology, DRS for Epiq
The Results
Saving Time & Significantly Lowering Costs
Epiq evolved its business practices, both to support the document review team with the best technology, but also to respond to that workforce’s need for physical and geographic flexibility.
Wright says, “Nerdio has saved our team countless hours. Time we can spend on other important things — supporting users and acting more strategically.” In a business where time is of the essence, Nerdio proved its worth quickly. As Wright tells it, “Epiq turned a very large workforce virtual in about two weeks. Being able to layer on a tool like Nerdio, and seeing increased functionality, scalability, and significant cost-savings was just invaluable to us.”
Nerdio’s Advanced Microsoft Azure auto-scaling capabilities drove significant monthly savings on Azure storage and compute costs–by about five times, in fact. “What we spend on Nerdio has been offset manifold by the savings. Probably within two weeks, we noticed a significant improvement in cost, because Nerdio was doing what AVD’s standard auto-scaling couldn’t.”
Financial Services Enterprise Organization Saves Over $10,000 a Month with Nerdio Manager for Enterprise
About Oportun
Since 2005, Oportun has offered financial services assistance aimed at the approximately 100 million people in the United States who are typically shut out of the financial mainstream because they don’t have a credit score or have a limited credit history.
Their mission-based, technology-powered approach is designed to be inclusive, affordable, and empowering. By lending money to hardworking, low-to-moderate-income individuals, they help their customers move forward in their lives, demonstrate their creditworthiness, and establish the credit history they need to access new opportunities.
Oportun has provided more than 3.8 million affordable small-dollar loans that have saved customers an estimated $1.7 billion in interest and fees compared to alternative lenders, according to a study commissioned by Oportun and conducted by the Financial Health Network, a leading nonprofit authority on consumer financial health.
The Situation
Distributed Workforce in Need of Cost Optimization
Oportun developed proprietary technology around the loan process and essential analytics programs that are keys to their success. “The analytics are really required to understand our customer base and perform the financial calculations required. Our IT team is a crucial part of our business,” said Erin Hasani, Microsoft Associate Architect at Oportun.
The company needed to support a widely distributed team. With workers overseas in India, the IT leaders at Oportun chose Microsoft Azure and Azure Virtual Desktop (AVD). Following a proof of concept implementation of AVD, Oportun identified gaps and areas where performance needed improvement. “Managing costs was the biggest thing we wanted to address,” said Hasani. “We didn’t want to run machines 24/7 due to cost considerations and we were also focused on giving end-users more visibility into their machines.”
The Solution
Easily & Quickly Implement Advanced AutoScaling to Lower Costs
Microsoft recommended Nerdio Manager for Enterprise as a perfect solution to the challenges Oportun had encountered. Nerdio is a Microsoft partner and the definitive Azure deployment, management, and optimization solution for AVD environments.
“We wanted something that was more robust, supported, and ready to go than native AVD alone, and that’s where Nerdio came in,”
– Erin Hasani, Microsoft Associate Architect at Oportun
Nerdio’s advanced AutoScaling technology allows a customer to easily adjust their Azure usage based on their needs. This can save a company up to 70% on Azure compute and storage costs. After a single week in the proof-of-concept stage, Oportun moved Nerdio Manager for Enterprise into production. “We had targets to start around efficiency, especially regarding personal desktops, and Nerdio was able to fill that gap incredibly quickly. “The automation features with Nerdio are ‘set and forget’ for the most part, and as users, we just reap the benefits,” said Hasani.
The Nerdio team worked with their counterparts at Oportun to make the process fast and efficient. As Hasani noted, “Nerdio’s features and the ease of use stood out to us. It was especially notable compared to the other solutions we researched.”
Designed to extend the native AVD experience, Nerdio helps users manage and optimize Microsoft’s powerful tools. “Nerdio integrates with AVD very smoothly. Deployment was a breeze,” Hasani said.
The Results
Major Time & Cost Savings Achieved
Once Nerdio’s solution was up and running. The results were clear and compelling. According to Hasani, “There were no crazy requirements. Integration was very straightforward with what we had on-premises. If it sounds easy, it’s because it was!”
The benefits came in several forms, most noticeably in time savings for the Oportun IT team and the direct costs associated with Azure. With Nerdio’s capabilities, there was no need to run the machines around the clock. The AutoScaling capabilities and shared desktop features allow Oportun to scale up and down more efficiently. “Without a tool like Nerdio, we couldn’t achieve that,” said Hasani.
“We deal with lots of images. Managing all of them can be a painful process. Nerdio makes it a breeze – much easier than what Microsoft’s native tools can provide.” – Erin Hasani, Microsoft Associate Architect at Oportun
Major cost savings have also been realized: “Auto-Scaling with Nerdio is saving us $10,000 a month. The added cost of the solution is nothing compared to what we save,” according to Hasani.
“Nerdio is really scalable. We’re not deploying thousands of desktops, but we’re seeing savings even with one or two hundred desktops.”
Simply put, Nerdio’s capabilities make life easier for the Oportun team. “The Nerdio solution is great at automating and being as ‘hands-off’ as possible, which frees up time for our engineers,” Hasani said. “The portal is very user-friendly for them, enabling them to spin up host pools and deploy machines easily. Choosing Nerdio was a no-brainer. Once you see something this good you don’t have to look somewhere else.”
Perhaps you even got trained and certified with the AZ-100 Microsoft Azure exam. You and your sales team learned how to make money in Azure by optimizing your margin and started using Nerdio’s Azure Cost Estimator to model a handful of what-if scenarios for a few customers.
You are now at the point where you want to put this foundational knowledge together to create standardized Azure offers that you can package and take to your existing and new customers and start scaling your Azure practice.
Sure, you could treat every engagement as a custom project with a specialized quote and proposal. However, with Azure’s increased complexity over traditional IT systems, this approach will require your busiest Azure experts to be involved in architecting each customer environment just to put out a quote! Your salespeople will struggle with this approach unless they themselves are super technical and deep in Azure, and ultimately the cost of quoting each Azure engagement will be very high.
How do you address this business agility challenge? In a word: Productization.
Azure Productization
Office 365 is a perfect example of brilliant productization. Microsoft took technically complex products such as Exchange, SharePoint, and the former Lync, then packaged them together for different audiences (i.e., Business Premium for SMB, E3 for Enterprise) — and it took off like wildfire!
Why? Because it became incredibly easy to transact; just buy a monthly subscription and all software and hosting is included. It also became easy for salespeople and customers to understand.
For example, if you work in an enterprise and need Office and Exchange, then E3 is the answer for you. If you own a small business and don’t need all the Office applications but do need a mailbox and the ability to share files with co-workers, then the perfect solution is Office Business Essentials.
This shifts the conversation between salespeople and customers from talking about CPUs, GBs of RAM, and bandwidth to talking about the right “package” for the needs of the business. The technical complexity doesn’t fully disappear from the process. It just moves out of the sales process and over to on-boarding and implementation where it belongs.
Most MSPs don’t win 100% of the proposals they put out, so why spend precious resources dealing with the technical complexity of architecting a solution if it won’t result in a won deal?
Not only does productization reduce the effort during the pre-sale process, it also reduces the sales cycle and increases agility. Having logical, well-structured offers (i.e. packages) simplifies the conversation between salespeople and prospects. It also becomes easier for customers to understand what they are buying and why, without them having to dive into the nuts and bolts of the product. Productization also opens the door to the creation of collateral and web site offers that prospects can review and absorb before even engaging with your sales team.
Compare the buying experience of someone going to an MSP’s website where the CTA (call to action) throughout is, “Contact us for a custom quote” versus someone who goes to the Office 365 website with the various packages listed side-by-side with prices, features, and technical details all in one place. By the time a prospect picks up the phone to contact a vendor selling productized solutions, they already have a good sense of what the products do, who they are designed for, and most likely which product they need.
With a clearly marked price, the MSP can shortcut the entire budgeting discussion and instead focus on pre-qualified prospects who won’t have sticker shock when they hear the price for the first time.
Azure Differentiation
Productizing sounds compelling—but there is more! Let’s look at differentiation. Organizations have a difficult time distinguishing between MSPs and their services. Each website and proposal talk about similar qualifications, expertise, technology, and quality of service. A non-technical buyer struggles to differentiate between one MSP and another.
MSPs have an opportunity to invest the effort to understand their buyers and create differentiated offers. This can make it easier for their buyers to understand what the MSP does and how they compare to the competition. Sometimes it can be something as simple as combining the same set of services in a clearer way and in a bundle the buyer understands.
Finally, let’s not forget the reason why you’re in business – to make money. What impact does productization have on margin? It is well known that selling products and services as individual line items, especially when they have publicly available list prices, leads to significant price pressure particularly at closing. Customers look at line items and try to understand each one individually, often comparing prices online.
This squeezes MSP margins significantly. With productized offers, there is significantly less price pressure as there is no way to price shop a productized package due to its uniqueness. MSPs can now bundle in valuable services like a help desk that may not have an immediate marginal cost to deliver, but increases the value of the bundle.
Differentiated, packaged offers lead to significantly higher margins as compared to proposals that itemize each line item. MSPs offering IT solutions on top of Azure should expect to achieve gross margins in the 40%-60% range on offers that can range from $50 to hundreds of dollars per user/month in price to the customer.
By now you’re probably asking yourself, “if productizing MSP services is so great why isn’t everyone doing it?” Well… it’s hard. You need to have a good understanding of your audience, your service delivery capabilities, and your risk tolerance. You will need to go through a rigorous trade-off process to decide not only what to include in each package, but more importantly, what to exclude.
The goal of this article is to help you identify these decision points and provide you with the tools needed to arrive at a productized Azure offering that’s right for your MSP practice.
We would be remiss in not mentioning some of the trade-offs that come with productization. By putting services and technologies in bundles, you do give up some flexibility. With custom services, every engagement can be a perfect fit for every customer. With productized, packaged offers, customers are bound to get some things that they may not need (just think of some apps included in Office 365 you never use) and not be able to get some of the things they may want without upgrading to the next tier.
It may be tempting to make exceptions and create one-off, custom solutions for customers to meet their precise needs. However, if you do this too much, the value of productization is diminished and you’re back to where you started. It is important to be comfortable with sometimes saying “no” and sticking to your standardized offering. If you’re doing this too often, it may be a sign your packaging isn’t quite right just yet and needs to be tweaked. However, if your standard packages meet the needs of your customers without significant customization 80% of the time, saying “no” 20% of the time may be well worth it.
A Case Study Example: HeadInTheCloud Services, Inc.
Before delving into the specifics of designing your Azure offers, let’s address some critical success factors and questions you must answer to structure your offer, including:
What should be included in the Azure offer?
How many service categories should there be?
How many plans should be in each category?
How to decide if a specific feature should be part of a bundle or serve as an add-on?
How to price each plan?
How to lay out the offer and present it to customers?
To illustrate this, we will work with a fictitious MSP called HeadInTheCloud Services, Inc. (HTCS, for short).
HTCS is a full-service MSP with ten years of operational experience installing on-prem servers and networking, configuring Windows environments, setting up Exchange servers, migrating customers to Office 365, and managing customers’ security stack including AV, firewalls, and content filtering. HTCS offers help desk and Virtual CIO services, uses an RMM, and manages customers remotely as well as onsite. The customer base consists of 75 managed services customers and a few dozen break-fix customers who occasionally call HTCS for help with one-off projects.
Bill, HTCS’ founder and President, decided that he wants to modernize HTCS and migrate most or all of his managed services customers to Azure and Office 365 over the next five years. Bill wants to leverage as many services as possible in Azure and migrate customers’ data, servers, line-of-business applications, messaging and even virtualize their desktops in Azure. The goal is to leave as few items on-premises as possible and become a true Azure MSP. He learned as much as he could about building an Azure practice and had his engineering team go through technical training. HTCS became a CSP Reseller and understands how to optimize Azure consumption to maximize margins.
HTCS has two salespeople. They are somewhat technical, but rely heavily on Jim, the Senior Engineer at HTCS. Jim is also playing the role of a Sales Engineer and Cloud Solution Architect. At every customer engagement, when the discussion turns to Azure, the salespeople do a good job getting the prospects interested and asking for a quote.
But then they bring in Jim, who needs to understand the customer’s current environment, architect a comparable Azure environment, and price it. This architecture and the cost are then presented to the customer by the salespeople and there are inevitable changes, causing lots of back-and-forth with Jim having to re-architect and re-price the environment. Suffice it to say, the sales process is less than efficient and sometimes takes weeks to finalize an architecture and price for the customer to consider.
Bill wants to leverage HTCS’ existing customer base to come up with standardized Azure IT offer to enable his salespeople to present to all customers, especially when their contract is up for renewal or hardware is due for a refresh. Bill decided to call his offer IT-as-a-Service (ITaaS) and wants it to be an all-inclusive solution that’s easy to sell, sticky with his customers, and provides HTCS with strong margin (40%+).
Should Azure consumption be bundled or not?
The first question Bill needs to answer is whether or not to bundle Azure consumption costs with HTCS’ managed services or allow the customer to buy Azure independently (unbundled). Azure is a consumption-based public cloud, which can be quite challenging to quote accurately, and Bill is concerned that he may not be able to precisely predict the cost of Azure consumption for a particular customer on a monthly basis.
Bill has two options to consider:
Option 1: Azure consumption is not bundled with the offering
Let the customer bring their own Azure subscription, or sell the customer a CSP Azure subscription but bill for it separately from any other services that HTCS offers. This would be pass-through billing where HTCS will provide each customer with a monthly Azure usage report showing how much was consumed in the prior month. There are pros and cons to this approach.
Pros
Low risk to HTCS – the customer only pays for what they consume.
HTCS will make a small margin on Azure consumption, which will be the CSP discount.
Cons
Customer may not be happy carrying Azure consumption risk and will likely expect HTCS, being the IT experts, to carry this risk.
HTCS is making a low margin (typically <10%) on a significant amount of monthly spend.
Billing will have to be done in arrears and will need to be reconciled with CSP billing. It won’t be possible to charge for Azure upfront at the beginning of the month: only at the end once the actual consumption is known.
Customer will want to know precisely what the costs are going to be, which means Jim will have to get involved with every opportunity to scope, architect, and price it.
Option 2: Azure consumption is bundled with the offering
HTCS will include the cost of Azure infrastructure as part of their ongoing managed services cost and will not pass-through the actual consumption costs to the customer. Customers will be paying for HTCS’ services based on a value metric that’s independent of Azure infrastructure (e.g. per-user, per-endpoint, fixed monthly fee, etc.).
Pros
The customer will benefit from an easy-to-understand pricing structure and HTCS will benefit from a simplified way of explaining and selling a managed service with Azure bundled in. The customer will also have an easier time budgeting for changes, such as increases in number of users.
HTCS will be able to charge an Azure management fee and bake it into the overall bundle price, thus increasing profit margins from <10% with a CSP discount to something significantly higher.
HTCS can bill for the entire managed service at the beginning of the month and not have to wait until the Azure consumption bill has been finalized. This will allow HTCS to collect a full 30 days sooner and have the money on hand when the Azure bill comes due.
If bundle pricing is well calibrated and there is enough margin to absorb any fluctuations, the quoting process will be much simpler. There may not even be a need to get Jim involved with every opportunity.
HTCS can take advantage of all Azure margin optimization best practices, including Reserved Instances, Software Subscriptions, and auto-scaling to maximize its margin while charging the customer Azure list prices without any markup.
Customer billing process will be much simpler without the need to provide the entire Azure consumption reconciliation report and try to explain each line item every month. When Azure is bundled in, it is not itemized.
Cons
HTCS is carrying the risk that Azure costs may exceed what was budgeted.
If customer needs to increase the cost of Azure infrastructure, HTCS will have to go back to the customer and adjust pricing.
Bill decides to take on some risk in exchange for simplicity and higher margins and bundles Azure with his managed services.
How many service categories and how many plans in each?
Given HTCS’ extensive services portfolio, Bill is trying to decide how many categories of services should be part of HTCS’ Azure ITaaS offer. Having more categories allows HTCS to showcase more of its capabilities and create many revenue streams. On the other hand, each category of services increases the number of decisions a prospective customer has to make before becoming HTCS’ customer. Bill decides that there should be no more than five categories to strike a healthy balance between these two competing objectives.
Service Categories
HTCS decides to have the following service categories:
Managed Services and per-user security items
Azure infrastructure
Office 365 licensing
End-user help desk
Add-ons
Within each service category, Bill decides to keep the number of plans to a minimum to make the decision process easier for the prospect and his salespeople while still providing enough choice for each customer to get exactly what they need.
Each category will have three plans. Let’s see what Bill came up with.
This is the money-making category. HTCS is an experienced MSP and is quite familiar with providing significant customer value through proactive IT services, automated monitoring, and remote remediation. Today, HTCS prices its managed services on a per-user basis. With its new IT-as-a-Service Azure offering, HTCS would like to continue offering managed services with their existing RMM, given the significant investment that has already been made into the RMM product. After all, Azure VMs are just like on-premises VMs and need to be closely monitored and maintained.
HTCS’ Azure ITaaS offering will be virtual desktop-centric, so Bill decides to call the service category “Managed Virtual Desktop” and creates three plans: Silver, Gold and Platinum.
Here is what Bill decides to include in each Managed Virtual Desktop plan:
Each plan includes base functionality such as multi-monitor support and RDS licenses. Security services (e.g. Webroot AV, MFA, patch management) are added in the more premium plans, and Performance and 24×7 Monitoring is available in the top-tier plan.
Bill knows that with a good/better/best type plan structure, the best-practice is to choose the middle plan (Gold in this case) to be his desired outcome and to design the two edge plans (Silver and Platinum) to showcase the amount of value included in the preferred plan (Gold) to customers.
By bundling together multiple valuable managed services, HTCS is budgeting to capture 60% to 80% gross margin of the managed service price when it is sold as part of the comprehensive Azure ITaaS offer.
Azure Infrastructure (20% – 50% gross margin)
Bill decides to once again create three Azure infrastructure packages to fit his customers’ needs. He considered bundling Azure with the Managed Virtual Desktop plans, but after reviewing multiple existing customer accounts, he discovered that HTCS would lose significant flexibility in being able to tailor each customer’s account to their exact needs. Bill also considered selling Azure in an “unbundled” fashion by passing the actual cost down to the customer but decided against this due to the billing complexity and margin pressure that HTCS would be subject to.
Bill came up with the following three packages that would meet the needs of 80% of his current and prospective customers, and left open the possibility for HTCS to create custom Azure infrastructure packages for individual customers as the need arose. Bill built in a bit of margin into the Azure infrastructure packages in addition to the standard discounts provided by HTCS’ CSP provider. He also intends to take full advantage of other Azure margin optimization levers such as reservations, software subscriptions, and auto-scaling.
By reselling Azure infrastructure in a bundle and charging a modest fee for infrastructure monitoring and management, HTCS is budgeting to capture 20% to 50% in gross margin for this service category when included with other components of the Azure ITaaS offering.
Office 365 licensing (10% – 15% gross margin)
As is the case with many MSPs, Office 365 is the most popular SaaS application that HTCS resells and supports. Almost all existing customers have been migrated from on-premises Exchange servers to Office 365 and many are leveraging Teams, SharePoint, OneDrive, and other Office 365 suite applications.
The challenge with reselling Office 365 licenses is the publicly available list prices and customers’ expectation that it will be sold at or below list price. Office 365 is certainly a key component of HTCS’ ITaaS offer as it is the messaging and collaboration platform and a mechanism for licensing the Office suite, but it is not going to be a high margin line item.
Bill decides to limit the published Office 365 plans to the three most common ones, used by 80% of his customers. HTCS will continue selling all other Office 365 and Microsoft 365 products but for the purpose of designing and presenting the Azure ITaaS offer, these three are likely going to be enough.
Because of Office 365’s popularity and well-known pricing, HTCS expects to capture only 10% to 15% margin, which represents the discount provided by the CSP Provider. However, this is not an issue since significant margin to cover the administration of Office 365 and other per-user services has been included in the Managed Virtual Desktop service.
End-user help desk (10% to 20% gross margin)
Like most MSPs, HTCS provides its customers’ end-users with help desk services for their day-to-day computer work, troubleshooting local and mobile devices, and being available after-hours, when needed.
Traditionally, HTCS bundled help desk into their overall managed services offering, but in the process of designing the Azure ITaaS offer realized that the needs of their customers varied based on an organization’s hours of operation and available in-house IT support.
Therefore, Bill decides to unbundle help desk from the rest of the managed services to allow a more precise match of services for the customer’s needs. Bill created three help desk plans segmented by availability of support (business hours only, long hours on weekdays, and 24/7), SLA expectations (i.e., first response and resolution), and number of authorized points of contact who can escalate issues directly to Tier 2 support.
Providing end-user help desk support is highly labor intensive, especially when the SLA expectations are high, and support is needed outside of regular business hours. However, it is often a non-negotiable necessity for an MSP and it had to be made available as part of the Azure ITaaS offer.
HTCS has priced its end-user help desk support package with very modest 10% to 20% gross margin targets as a high support price can turn off a prospect from the entire engagement since they think they’ll rarely need it and are hesitant to pay much for it up-front.
Add-ons (gross margin varies)
HTCS offers many services and technologies to their customers and are planning to continue to do so. However, for the sake of keeping the sales process for the Azure ITaaS offer as streamlined as possible, only the most popular add-ons were selected to be included in the basic offer.
The add-ons portion of the Azure ITaaS offer is designed to showcase certain services that are commonly purchased together with the rest of the virtual desktop-centric IT environment. These include one-time projects such as onboarding and migration, ongoing Virtual CIO strategic services, and popular licenses like SQL Server.
How do you decide if a specific feature should be part of a bundle or be an add-on?
To decide what features should be included within each of the service categories of the proposed Azure ITaaS offer, Bill utilized the Value Matrix model created by Price Intelligently (experts in SaaS pricing).
Each potential feature is evaluated along two axes: the value it delivers to the customer and the customer’s willingness to pay for the feature. This type of analysis is typically done as part of large-scale pricing study, but can be done qualitatively for any MSP who understands their customers’ needs.
Core Features – these are features without which you can’t really have a credible offer. These features are table-stakes. Customers expect them from any MSP they would consider hiring and therefore don’t see them as differentiators. They may be quite valuable, but customers aren’t willing to pay much for them without a lot of convincing and selling. For MSPs, examples of Core Features may include:
End-user help desk
Remote monitoring and management
Office 365 implementation
Differentiable Features – these features are both highly valuable and benefit from customers’ high willingness to pay for them. They are items that differentiate one MSP from another and showcase a particular MSP’s expertise in a certain technology, methodology, or industry vertical. It is ideal to have a few differentiable features in each Plan. For MSPs, examples of Differentiable Features may include:
Virtual Desktop management expertise
Azure expertise
Financial services, non-profit, or any other vertical specialization
Trash Land – these are service components that are both low value and as a result have low customer willingness to pay. When designing an offer, it is best to reduce or eliminate the number of such features, as they don’t help capture value (via gross margin), yet cost money for the MSP to deliver. For MSPs, an example of a Trash Land item is the resale of Office 365, AntiVirus, or backup without any value-added features on top of the software license. The customer can purchase the licenses in any number of channels and if the MSP is not providing value on top of the license, these should not be included in a well-designed Azure ITaaS offer.
Add-ons – customers may not place much value in these features, but a select few, are very important. Such features shouldn’t be included as a part of the standard offer but should instead be made available as an add-on to a core offering. For MSPs, example of Add-ons may include:
Hot-site DR for financial services customers or others with specific regulatory requirements
Ongoing Virtual CIO services for companies without any in-house IT expertise to help guide the long-term IT strategy
Special licenses like SQL Server for those organizations with line-of-business apps requiring SQL
It is important to remember that features move around the four quadrants of the Value Matrix over time. Something that starts out as a differentiated feature may eventually become a core feature, or even move to Trash Land. Add-ons that may be applicable to only a select customer segment may become popular and eventually become a core feature. Therefore, every couple of years the plans and packages must be reviewed to ensure the proper feature mix.
When designing individual plans for the Azure ITaaS offer, Bill created a list for each possible feature in all categories and then evaluated them based on the diagram above. Core features were made a part of all plans, differentiated features were used to clearly distinguish between individual plans, Trash Land features were kept to a minimum, and add-ons were used to make unique features available as separate items with a healthy gross margin.
How to price each plan?
Pricing subscription services is far from trivial. The most accurate approach is to conduct a large-scale pricing study surveying thousands of customers across a broad spectrum of features, packages and their willingness to pay for each combination. Such pricing studies tend to be very expensive ($100K+) and are unlikely to be conducted by too many MSPs. However, the typical services offered by MSPs are largely consistent across geographies and industries and it is possible to get a pretty good idea of a customer’s willingness to pay based on an MSP’s experience selling such services to dozens or hundreds of customers.
The major takeaways from Nerdio’s pricing study of thousands of SMB customers include:
A willingness to pay for an all-inclusive package (infrastructure, software, and services) of cloud IT services ranges from $100 to $250 per user per month
Larger companies tend to be willing to pay more per user than very small companies
Companies in highly regulated industries (i.e., healthcare, financial services, legal, etc.) tend to be willing to pay more per user
Understanding a customer’s willingness to pay at certain price points and with specific pieces of functionality is helpful in designing a complete Azure ITaaS offer and splitting the complete offer into prices of individual components. For instance, the sum-total of all “lower end” plans in an Azure ITaaS offer should add up to roughly $100/user/month, while the sum of all “higher end” plans should add up to about $250/user/month.
How to package your offer and present it to customers
Having gone through the above exercise, Bill needs a way to pull all the information together to present it to his team and eventually prospective customers. Fortunately, Nerdio’s Plans Designer functionality has been created for just this reason.
It is a fully functional Azure ITaaS pricing page creator that allows MSPs to design their own packages with customer plans, features, and prices and then publish the entire offer as a “Pricing Page” on their own website with custom branding, colors, and images.
The Pricing Page serves as a selling tool for the sales team to review Azure ITaaS options with customers and a lead generation tool for anonymous website visitors who want to price out their own Azure ITaaS solutions.
We hope this article and case study proved to be helpful for you. We will continue to update this page as more Azure packaging information comes to market.
The Microsoft 365 (M365) and Office 365 (O365) licensing options can be confusing, especially when it comes to understanding the differences between the two. Both M365 and O365 offer a suite of productivity tools, but the licensing models, features, and pricing structures vary between the two. In this blog post, I will provide a comprehensive comparison of M365 vs. O365 licensing options, including a breakdown of the different plans, features, and pricing structures. Whether you are a small business owner or an enterprise IT manager, this guide will help you make an informed decision when selecting the right licensing option for your organization.
Windows 365 Introduction
With the increasing shift towards cloud-based computing, Microsoft has introduced two new cloud-based offerings for businesses and organizations: Windows 365 and Microsoft 365. While both products are aimed at enhancing productivity, they differ significantly in their scope, features, and intended use cases. See our updated posts on Windows 365.
The first step most Managed Service Providers (MSPs) take to move their customer’s business to the cloud is with Office 365—the cloud productivity suite from Microsoft. Microsoft currently offers two main plans for its cloud productivity services: Office 365 and Microsoft 365.
In this article, we will explain the differences and help you understand when to choose one over the other when building a cloud practice.
1. Microsoft Licensing: Office 365 (O365)
Of the two types of plans, this one is the most popular. Office 365 is the traditional cloud productivity suite that comprises of common Microsoft Office applications like Outlook, Word, Excel, and PowerPoint. Most of these plans offer hosted Microsoft Exchange mailboxes along with various “add-ons” that add increased security and compliance for stand-alone office applications such as Project. The Office 365 suite is divided into two main categories: Office 365 Business and Office 365 Enterprise.
Office 365 Business
Business plans include Essential, Business, and Business Premium. These plans are a great low-cost way to provide key Office 365 services to clients with minimal needs. However, there are a few limitations to these plans which are important to note. For example, Office 365 Business does not include Shared Computer Activation (SCA) for Office products. This means that you cannot use Business plans with a Remote Desktop Environment (RDS) in Azure.
Office 365 Enterprise
Office 365 Enterprise plans include ProPlus, E1, E3, and E5. These plans offer key features that are geared towards Enterprise productivity which include options that are not available under Business plans. All these plans, except E1, include Office ProPlus with SCA and are suitable for use in an RDS environment. The Office 365 E3 plan is the most commonly used level within Enterprise plans as it includes Office ProPlus, Exchange, and important security and compliance features like e-discovery and archiving. In order to provision a Nerdio environment, you will need a minimum of one E3 license.
Other plans
Office 365 also offers various versions of Enterprise plans for various verticals. These include Education, Government, and Non-Profit licensing. Each licensing model caters to specific requirements and has varying costs.
2. Microsoft Licensing: Microsoft 365 (M365)
Microsoft 365 was introduced in late 2017 as a new product bundle that combines the traditional Office 365 features with Enterprise Mobility + Security (EMS) and Windows 10. Though these plans are costlier than Office 365 plans, they provide a complete cloud productivity solution. The most important differentiation is that these plans include a Windows 10 Enterprise license which can be used to license Virtual Desktops in Microsoft Azure through traditional VDI or through Azure Virtual Desktop (AVD). Microsoft 365 is split into three categories: Business, Enterprise, and Education.
Microsoft 365 Business
This plan is focused on SMB deployments. It includes Office 365 Business (not ProPlus), some basic EMS functionality, and Intune for device management. These plans are an “upgrade” from the Office 365 Business Premium plans. A keynote here is that Office 365 Business plan has fewer features as compared to its Office 365 ProPlus version with respect to the limit on the number of users it can be deployed for (currently 300) and zero group policy support. As of April 2019, Office 365 Business through Microsoft 365 Business plans will include SCA for use on an RDS host.
Microsoft 365 Enterprise
Microsoft 365 Enterprise plans not only mirror the traditional Office 365 E3/E5 plans but also add in a Windows 10 Enterprise license along with EMS features. These plans would be an “upgrade” from the Office 365 E3/E5 plans and include critical security features like Azure Information Protection, Office 365 Advanced Threat Protection, and Microsoft Intune. There is also a new F1 plan within M365 Enterprise which is designed for users who need limited access to M365 services. These plans allow users to fully manage their desktop infrastructure either on-premise or in the cloud.
Microsoft 365 Education
Microsoft 365 Education consists of a new level of plans geared specifically for classrooms. These plans are focused on providing productivity tools required for the classroom at a reasonable price point. They are split into A1, A3, and A5 license levels with A1 being a one-time per device license while the A3/A5 licenses are traditional monthly recurring costs. In addition, with most levels, pricing is based on teacher licenses, with students being able to be added to the plan at no cost.
The table below provides a quick comparison between O365 and M365:
O365
M365
O365 is a cloud-based suite centered around business productivity, which includes apps like Outlook, Word, PowerPoint, and more.
M365 is a bundle of services that includes Office 365, and several other services.
Depending on your O365 plan, subscriptions also include apps and services like Skype for Business, SharePoint, OneDrive, Teams, Yammer, Planner and so on.
An M365 license also includes Windows 10 Enterprise, Enterprise Mobility + Security (EMS), and machine learning.
O365 license is a monthly, per-user subscription. You can choose various O365 plans as per your specific business needs.
There are three flavors to M365: Microsoft 365 Business is designed for SMBs with 300 users or less. Refer details at M365 business plans Microsoft 365 Enterprise is made for larger organizations that need stronger security and device management functionality. Refer details at M365 Enterprise plans Microsoft 365 Education is a basic plan designed for students and teachers to enhance learning in the classroom
