Do Office 365 Enterprise Plans Cost More Because Of Australian Hosting?

We’ve been slightly bemused by the Australian subscription pricing for Microsoft Office 365 ProPlus, which is much more expensive than a cheaper plan which also includes the majority of its features. A partial explanation for that anomaly: some of the pricier enterprise-specific versions of Office sold by Telstra are actually hosted in Australia, though those releases don’t use the 365 brand.

As we noted last week, Telstra (which is the reseller for the Office 365 business product in Australia) is charging $26.90 a month for the ProPlus version, while the Midsize Business release (which includes most of the ProPlus features) is $16.50 a month.

Commenters on that post highlighted that the Midsize Business version isn’t available if you want more than 250 seats. I suspected there might also a second factor: some specialised enterprise releases are hosted in a Telstra data centre in Australia, rather than Microsoft premises in Singapore. That’s outlined in a newly-released case study on how Microsoft worked with Telstra to deploy the Office 365 services, which notes: “Telstra provides Office 365 to its customers from a Singapore data center. However, many of its enterprise customers require that their data reside in Australia.” In those cases, Telstra will offer specialised local hosting for specific enterprises — but not, it turns out, under the Office 365 banner (which is what I first thought when I read the case study). So the mystery remains.

Paying a premium for Australian hosting isn’t unusual, though the question of whether companies legally need to host data in Australia is rarely straightforward.