Microsoft Office 365Customer Solution Case Study

Outdoor Apparel Leader Improves Communications with Hosted Solution

OverviewCountry or Region: United StatesIndustry: Apparel manufacturing

Customer ProfilePatagonia is a global, leading provider of clothing and gear for outdoor activities. Headquartered in Ventura, California, it has 1,500 employees worldwide.

Business SituationPatagonia wanted to update its aging messaging solution and add unified communications to help employees around the world work better together.

SolutionIt decided to pilot test Microsoft Office 365, the next-generation online services from Microsoft, which includes the latest version of the Microsoft Office Professional Plus desktop suite.

Benefits Drives real-time communications and

decisions Supports “Drive-Less” program to

reduce carbon footprint Reduces IT administration and costs Provides enterprise-class reliability Enables predictable and flexible

licensing

“If you look at the Office 365 price point, we could not provide this same level of IT service, at the same cost, ourselves.”

Casey Stoops, Network Operations Manager, Patagonia

Patagonia, a global provider of outdoor apparel and gear wanted a new solution for unified communications to help employees around the world work better together. The IT staff also needed to upgrade its aging messaging solution. When the company heard about the next-generation online services from Microsoft, it decided to evaluate Microsoft Office 365, which includes the latest version of the Microsoft Office Professional Plus desktop suite. Based on a pilot test of Office 365, Patagonia expects employees to communicate more effectively and make better design decisions. Patagonia also believes Office 365 will help it reduce IT costs, improve business continuity, and support its environmental initiatives.

SituationFounded in 1972 to succeed a small company that provided climbing tools, Patagonia has grown into a globally recognized brand. The company designs, produces, and distributes clothing and gear for such pursuits as trail running, skiing, mountain climbing, surfing, and snowboarding. Headquartered in Ventura, California, Patagonia has a strong presence across the Americas, in Europe, and in Japan. The company serves its markets through multiple channels, including international distributors, wholesalers, retail stores, catalog sales, and e-commerce.

For Patagonia, putting its brand and resources to work on behalf of the environment is as important as providing the best possible outdoor products. The company engages on important environmental issues and offers insight and ideas of value to environmentalists. Customers can track the environmental impact of individual Patagonia products throughout their life cycle in an online resource. Patagonia also strives to practice optimal sustainability throughout its business activities.

For communications, employees relied primarily on email and traditional phones, and occasionally used a third-party video conferencing tool located in select conference rooms, but use was not widespread. Without access to unified communications capabilities such as presence, instant messaging, and online meetings, employees experienced delays communicating with each other and with outside vendors and suppliers.

For example, design work for Patagonia begins at headquarters; however, people in offices around the world must also participate in the design process. Designers need to show images to other parties during the design process. Michael Busch, Director of Technology at Patagonia, is responsible for Patagonia’s global IT team and strategy. Busch says, “By sending pictures back and forth, people cannot always provide the best visual representation, and unread emails can lead to delays. We need a solution that employees can easily use to collaborate on designs in real time. Just as important, we want a communication solution that all employees can easily access and that provides video conferencing options for everyone.”

The IT staff also wanted a communications solution to support the company’s environmental initiative called the “Drive-Less” program. The worldwide program calls for employees to reduce their carbon footprint by using alternative transportation, such as a bike or a bus, to get to work. As part of this initiative, the company is also giving employees the opportunity to work from home more often.

The company was also faced with the challenge of upgrading some of its aging solutions. The IT staff sought to upgrade Microsoft Office 2003 with the latest capabilities in Microsoft Office 2010 on the desktop to help boost employee productivity. To improve reliability in its messaging solution, the IT staff wanted to upgrade its aging server hardware and its Microsoft Exchange Server 2003 messaging solution to Microsoft Exchange Server

27

2010. Casey Stoops is the Network Operations Manager for Patagonia and is responsible for infrastructure services. Stoops says, “We knew it was time for us to upgrade our current versions of Exchange and Office, but with our small IT staff and aging servers, we were concerned with the amount of time and costs required to get there.”To address its aging technology and its growing communications and collaboration needs, Patagonia considered both on-premises and cloud-based Microsoft technologies. The IT staff wanted a solution that would reduce the burden of upgrades and ongoing administration for such things as server maintenance, security updates, and antivirus and anti-spam technologies. They also wanted a solution that offered enterprise-class support and reliability for business continuity.

SolutionWhen Microsoft announced the next generation of cloud-based services, Patagonia reached out to its partner DynTek Services, a Microsoft Gold Certified Partner, to learn more about Microsoft Office 365. Office 365 brings together cloud-based versions of Microsoft Exchange Online, Microsoft Lync Online, and Microsoft SharePoint Online with the latest version of the Microsoft Office Professional Plus desktop suite. Stoops says, “When Office 365 became an option, we jumped on it right away because we knew the cloud is where we wanted to go.”

To get started, DynTek helped Patagonia join the Office 365 Rapid Deployment Program to run a pilot program and evaluate a transition strategy for the organization. Pilot participants were able to

immediately download the Office Professional Plus desktop suite from the Office 365 portal to take advantage of the latest Microsoft Office 2010 applications. Since the company is upgrading from Office 2003, the IT staff believes Office Professional Plus will be a significant step forward and a productivity driver for employees.

Stoops says, “The pilot participants have already expressed their excitement about the new and improved email and calendar management capabilities in Microsoft Outlook 2010. The Finance team also noted that they can immediately take advantage of the expanded rows and columns and improved conditional formatting tools in Microsoft Excel 2010 spreadsheets.” Because the Microsoft OneNote note-taking program was not part of the Office 2003 desktop suite, the pilot participants are also exploring how OneNote 2010 notebooks can help them with note-taking and team collaboration. Busch adds, “We are especially impressed with how OneNote 2010 is integrated with other Office applications, like Outlook.”

To test the online services in Office 365, DynTek and the Patagonia IT staff configured Lync Online and Exchange Online through the Office 365 administrative web portal. Pilot participants could immediately communicate in real-time with their colleagues through the capabilities in Lync Online, including instant messaging, PC-to-PC calls, and audio and video conferencing. Employees can access these capabilities through presence indicators and contact cards that appear in most Office applications and on SharePoint sites.

37

“We believe Office 365 capabilities, like video conferencing, will help our employees drive real-time decisions, which will help us reduce problem resolution time and potentially accelerate our products to market.”

Casey Stoops, Network Operations Manager, Patagonia

“The traditional style of communication through email messages and phone calls is not enough anymore. Employees want the ability to chat and work together instantly from their PCs, and they want do this from virtually anywhere,” says Busch. “Lync Online is the first unified communications solution for the company, and we believe the real-time communications is a huge win for our business.” For example, now that product designers have instant access to video conferencing through Lync Online, they can escalate an instant message chat to a video conference in one click to share a clear visual representation of the product with other design participants. Stoops adds, “With Lync Online, our employees can quickly reach out to others in the global organization to make business and product decisions in real time, and instantly escalate a quick chat to a group conference, with video if needed, speeding up the decision making process.”

In addition, as more employees elect to work at home as part of the “Drive-Less” program, they can take advantage of these communication capabilities within Office applications and SharePoint Online to find and communicate instantly with other available coworkers.

With Exchange Online, employees can use enhanced capabilities in Outlook 2010, such as Conversation View, MailTips, and Calendar Preview, to manage their inboxes. To help with heavy email volumes, employees will enjoy a 25 times larger mailbox size—from the current 500 to 1000 megabyte (MB) average limit set in Exchange Server 2003 to 25 gigabyte (GB) in Exchange Online, an Office 365 default.

Because Microsoft SharePoint Online is a new solution for Patagonia, the IT staff is working with DynTek to develop a strategy for how it will work best for employees. The goal is to introduce SharePoint Online to employees for document sharing and team collaboration, so that employees no longer need to send documents as email attachments. When employees have no Internet connection, they can use Microsoft SharePoint Workspace 2010, available in Office Professional Plus, for offline access to SharePoint Online files and document libraries. Stoops says, “We foresee lots of business process opportunities with the collaboration capabilities in SharePoint Online and Office Professional Plus.”

DynTek will help the IT staff at Patagonia evaluate the experience of this pilot group to determine next steps and timing. DynTek will also offer training to Patagonia employees so that they can learn more about the new capabilities in Office Professional Plus and how its capabilities seamlessly connect with the online services in Office 365. Patagonia feels the training will help speed adoption. Stoops says, “Our end goal is to completely eliminate our on-premises Exchange infrastructure and migrate our email to the cloud. Patagonia is strongly considering Office 365 to achieve this goal.”

BenefitsPatagonia looks forward to the transition to Office 365. The company anticipates its employees will improve communication and collaboration, which will help them make faster decisions about designs and support their efforts to reduce their carbon footprint. The IT staff expects to reduce

47

“When you look at the capabilities, the price per user, and the opportunity costs of supporting on-premises servers internally, we are confident Office 365 is the right decision for our business.”

Casey Stoops, Network Operations Manager, Patagonia

administration and costs, while improving business continuity and enabling predictable licensing. Stoops says, “When you look at the capabilities, the price per user, and the opportunity costs of supporting on-premises servers internally, we are confident Office 365 is the right decision for our business.”

Drives Real-Time Communications and DecisionsBecause Lync Online is easy to work with and employees can access it from their own PCs, the company expects that employees can reduce delays caused by limited video conferencing facilities and unread email messages. Stoops says, “We believe Office 365 capabilities, like video conferencing, will help our employees drive real-time decisions, which will help us reduce problem resolution time and potentially accelerate our products to market.”

Supports “Drive-Less” Program to Reduce Carbon FootprintThe “Drive-Less” program is another example of how Patagonia and its employees continue to pursue projects that take responsibility for how they impact the environment. With the communication and collaboration capabilities in Office 365 and Office Professional Plus, the company can provide the flexibility for more employees to work from home, so they can reduce their carbon footprint by driving less. Busch says, “We need to support flexible work options for our employees to work at home or outside the office. We believe capabilities in Office 365, including Office Professional Plus, will be critical to this effort.”

Reduces IT Administration and CostsWith Office 365, the company will avoid future costs for new server hardware. The IT staff can hand most IT functions for messaging and communications to Microsoft, which has specialized resources and data centers to support these solutions. Stoops says, “We believe for us to spend our own time on updates, daily server maintenance, and antivirus updates is not a good use of our IT resources, so handing off these tasks to Microsoft is a very attractive proposition for us.”

The IT staff can also worry less about effort and costs associated with future upgrades to Office, Exchange, Lync and SharePoint software. With Office 365, Patagonia can run up-to-date versions of these technologies so it can deliver the latest productivity solutions to its employees. “We were always looking ahead to when we were going to have to upgrade,” says Busch. “With Office 365, we can take advantage of the extensive experience Microsoft has with its own products to help us help maintain our environment and keep us current. For the most part, we can now just be consumers of the service.” Patagonia estimates cost savings to exceed U.S.$300,000 for future upgrades to associated infrastructure and software.

The IT staff also expects to eliminate costs by approximately U.S.$15,000 a year for some third-party software and services, such as anti-spam and antivirus applications and back-up services related to their servers running Exchange Server 2003.

57

These time and costs savings will help the small IT staff at Patagonia to align itself with IT projects related to business initiatives, as opposed to maintaining messaging and communication services. Stoops says, “By pushing administration to the Microsoft data centers, we can focus more of our attention on critical business projects, like retail applications and compliance with new governance and regulatory processes.”

Provides Enterprise-Class Reliability for Business ContinuityWith Office 365, Patagonia takes advantage of premium anti-spam and antivirus protection, geo-redundant data centers, twenty-four-hours-a-day, seven-days-a-week IT-level phone support, and a financially backed, 99.9 percent uptime service level agreement. Stoops says, “We are confident that Microsoft has the infrastructure to protect our data in the cloud and provide us with more robust security and reliability for business continuity. If you look at the Office 365 price point, we could not provide this same level of IT service, at the same cost, ourselves.”

Enables Predictable and Flexible LicensingThe monthly, per user Office 365 subscription-based service plans offer Patagonia predictable and scalable licenses so it can match the needs of the business.

Office Professional Plus is also part of this Office 365 monthly subscription, which eliminates the need for the IT staff to manage a separate agreement for Microsoft Office. Busch says, “We think Office as part of the subscription is a nice benefit of Office 365. This helps us stay current with the Office version, without having to worry about volume license agreements and updates.”

Stoops concludes, “We anticipate the capabilities we gain from Office Professional Plus and the online services in Office 365 will be real productivity drivers for us moving forward.”Microsoft Office 365Microsoft Office 365 brings together cloud versions of our most trusted communications and collaboration products—Microsoft SharePoint Online, Exchange Online, and Lync Online—with the latest version of our Office desktop suite and companion web applications for businesses of all sizes.

Office 365 helps save time and money, and it frees up valued resources. Simple to use and easy to administer, it is financially backed by a service level agreement that guarantees 99 percent reliability. Office 365 features robust security, IT-level phone support, geo-redundancy, disaster recovery, and the business-class privacy controls and standards that you expect from a world-class service provider.

67

For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about DynTek Services, Inc. products and services, call (877) 297-3723 or visit the website at: www.dyntek.com

For more information about Patagonia products and services, call (800) 638-6464 or visit the website at: www.patagonia.com

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published June 2011

Software and Services Microsoft Office− Microsoft Lync 2010− Microsoft OneNote 2010− Microsoft Outlook 2010− Microsoft SharePoint Workspace

2010

Microsoft Office 365− Microsoft Exchange Online− Microsoft Lync Online− Microsoft Office Professional Plus− Microsoft SharePoint Online

For more information about Microsoft Office 365, go to:www.office365.com

77