Are You Paying Too Much for Microsoft 365?
Microsoft 365 has become such a normal part of everyday business that it’s easy to stop thinking about it. A new employee starts, so they receive a licence. Someone needs an additional feature, so their licence gets upgraded. An employee leaves and the account is dealt with. Another department adds another tool. Repeat that over several years and your Microsoft 365 environment can become considerably more complicated than it started. The question is: are you still paying for exactly what your business needs? For many organisations, the answer is worth investigating.
What Is Microsoft 365 Licence Optimisation?
Microsoft 365 licence optimisation simply means making sure the licences you’re paying for reflect what your employees actually need and use. That doesn’t necessarily mean choosing the cheapest licences available. It means making sure you’re getting value from what you’re already paying for. An employee who regularly needs advanced security or device management capabilities may absolutely require a more comprehensive licence. Someone using only basic Microsoft applications may not. The problem comes when nobody is reviewing the difference.
Microsoft 365 Costs Can Creep Up Quietly
One unused licence doesn’t seem particularly important. Multiply that across several employees, multiple services and a full year and it begins to matter. Common causes of unnecessary Microsoft 365 spending include:
- licences assigned to former employees
- licences purchased but never allocated
- employees on plans containing features they don’t use
- multiple third-party tools providing functionality already available through Microsoft 365
- temporary employees retaining licences after leaving
- duplicated subscriptions
- old accounts that haven’t been properly reviewed
None of these necessarily means somebody made a mistake. Businesses change quickly and software environments naturally grow with them. The issue is allowing that growth to continue indefinitely without reviewing it.
Start With Actual Usage
Rather than guessing who uses what, businesses can review usage information within Microsoft 365. Microsoft’s own Microsoft 365 admin guidance explains that usage reports can help administrators understand how employees use different services. It specifically notes that businesses can identify users who use services extensively as well as those who barely use them and potentially may not need a particular Microsoft 365 licence. Usage information can be reviewed across periods including 7, 30, 90 and 180 days. That gives businesses a much better starting point than simply looking at a list of licences.
Ask Whether Employees Need the Licence They’re On
Not every employee works in the same way. Your finance team, sales team, engineers and directors may all use Microsoft 365 differently. Rather than assigning the same package to everybody, consider what each role genuinely requires. For example:
- Do they need desktop Office applications?
- Do they need advanced security?
- Do they use Teams regularly?
- Do they need device management?
- Do they require larger email storage?
- Do they work remotely?
- Do they handle sensitive information?
- Do they need specific compliance features?
This is where licence optimisation becomes more than simply “cutting costs”. The objective is to align your technology with the way your people actually work.
Check for Former Employees and Dormant Accounts
Employee onboarding tends to receive plenty of attention. Offboarding doesn’t always receive the same treatment. When somebody leaves an organisation, there are several things to consider beyond simply disabling their login.
- What happens to their mailbox (e.g., converting to shared mailboxes)?
- Who needs access to their files?
- Should emails be forwarded?
- Who owns documents they created?
- Does their Microsoft 365 licence still need to remain assigned?
- How should their data be retained?
A proper joiner, mover and leaver process can help businesses manage both security and licensing more effectively. It also reduces the risk of forgotten accounts remaining within the environment unnecessarily.
Are You Paying Twice for the Same Function?
This is another area worth reviewing. Over time, organisations accumulate software. A team needs a particular feature, so somebody signs up for a platform. Another department finds another solution. Several years later, the business may be paying for a collection of services that overlap. Microsoft 365 itself contains a broad range of collaboration, storage, communication, productivity and security capabilities depending on the licences you use. That doesn’t mean every third-party product should automatically be cancelled. Specialist software can provide capabilities far beyond Microsoft’s equivalent. But it does mean businesses should periodically ask: Are we paying for functionality we already have elsewhere? If the answer is yes, there may be an opportunity to simplify the technology environment as well as reduce costs.
Don’t Cut Licences Without Considering Security
Cost optimisation shouldn’t become a race to downgrade everybody. Some Microsoft 365 plans contain important security and management capabilities. Removing them purely because an employee doesn’t regularly interact with the feature could unintentionally weaken your wider security strategy. For example, your business might rely on licence features relating to:
- identity protection
- device management
- access controls
- threat protection
- data protection
- compliance
That is why Microsoft 365 licence optimisation should ideally consider both usage and business requirements. Saving a few pounds each month isn’t worthwhile if doing so creates a security or compliance gap.
Microsoft 365 Is More Than Word and Outlook
This is perhaps the other side of the optimisation conversation. Some businesses aren’t paying for too much. They’re paying for Microsoft 365 capabilities they simply aren’t using. Microsoft’s usage reports can show activity across applications such as Outlook, Word, Excel, PowerPoint, OneDrive and Teams. If your business already has access to a tool that could solve an operational problem, getting more value from your existing Microsoft investment may make more sense than purchasing another platform. For example, organisations may discover opportunities to improve:
- document collaboration
- file sharing
- internal communication
- remote working
- workflow automation
- security
- device management
Sometimes the biggest saving isn’t cancelling a Microsoft licence. It’s using the licence more effectively.
How Often Should You Review Microsoft 365 Licences?
There isn’t one rule that suits every business, but Microsoft 365 shouldn’t be something you set up once and never revisit. For many organisations, a quarterly or six-monthly review is a sensible starting point. You may want to review:
- total licences purchased
- total licences assigned
- inactive accounts
- employee usage
- licence types
- recent starters and leavers
- third-party software overlap
- security requirements
- future recruitment plans
Larger or rapidly changing organisations may benefit from reviewing their environment more frequently.
Seven Questions to Ask During Your Next Microsoft 365 Review
If you haven’t reviewed your Microsoft environment recently, start here:
- Are we paying for any licences that aren’t assigned?
- Do former employees still have licences attached to their accounts?
- Are employees using the services included within their current plans?
- Could some users be on a more appropriate licence?
- Are we paying for separate software that duplicates Microsoft 365 functionality?
- Are we actually using the security features available to us?
- Does our current Microsoft setup still match the way our business works today?
The answers might uncover unnecessary costs. But they could just as easily uncover opportunities to make better use of technology you’re already paying for.
Get More From Microsoft 365
Microsoft 365 licence optimisation isn’t simply about reducing the monthly bill. It’s about making sure your business has the right tools, in the right hands, for the right reasons. As your business grows, recruits employees and adopts new technology, your requirements change. Your Microsoft 365 environment should change with you. At Silver Lining, we help businesses manage their Microsoft 365 environments alongside their wider IT, cloud, communications and cyber security requirements. Whether you’re looking to reduce unnecessary licensing costs, improve security or simply understand whether you’re getting the most from Microsoft 365, reviewing your current setup is a good place to start. Speak to the Silver Lining team about reviewing your Microsoft 365 environment and making sure you’re getting the right value from your licences.