Microsoft 365 has become an indispensable suite of productivity tools for businesses of all sizes. However, managing licenses efficiently can be a daunting task, often leading to unnecessary expenses. By implementing a strategic approach to Microsoft 365 licensing optimization, organizations can unlock two benefits. First, it helps procurement save costs and buy only what is required. Second, it helps IT make sure end-users are using what is bought through continuous license management methods.
As a long-standing Microsoft partner and Cloud Solution Provider (CSP), Softlanding has developed five steps that an organization can follow to improve licensing and cost savings in a quick and efficient manner.
1. Assessing Your Current Licensing Landscape
The first step towards optimizing your Microsoft 365 licensing is to gain a comprehensive understanding of your current licensing situation. This involves conducting a thorough audit to identify the licenses you currently possess, their associated costs, and the terms of your existing contracts.
Inventory Your Licenses and Review Costs
Begin by creating a detailed inventory of your technology stack, including the number of licenses you have purchased for each Microsoft 365 application or service. Examine the costs associated with these licenses and review the terms of your contracts, as they may influence how you manage your technology portfolio.
During this process, you may uncover licenses that have been purchased but remain unassigned. Depending on your purchase model and renewal dates, these unassigned licenses could present an opportunity for immediate cost savings.
Evaluate User Needs and Identify Gaps
Once you have a clear picture of your current licensing situation, compare it with the functional needs of your organization. This exercise will help you identify the delta between what you have purchased and what is being actively adopted and utilized by your users.
To bridge this gap, create detailed functional user profiles based on job roles and responsibilities. These profiles will help you determine whether the licenses you have purchased align with the actual needs of your workforce.
2. Monitoring License Utilization and User Behavior
Gaining visibility into how your users interact with Microsoft 365 applications is crucial for optimizing license usage and ensuring you are not overspending.
Establish a Monitoring and Reporting Mechanism
Implement a robust monitoring and reporting solution that can provide granular insights into license utilization. This solution should enable you to track key metrics, such as the licenses you have, who they are assigned to, and whether there are any disabled users still holding licenses.
By continuously monitoring user behavior and application usage, you can identify underutilized workloads within base licenses. This information can help you reclaim and repurpose high-cost licenses, downgrade users to more appropriate license tiers, or eliminate unnecessary subscriptions altogether.
Analyze Usage Patterns and Adapt
As user needs evolve over time, it is essential to have a process in place to capture these changes. Regularly analyze usage patterns and adapt your licensing strategy accordingly. This proactive approach will help you avoid over-purchasing licenses and ensure that you are investing in the tools your workforce truly needs.
3. Optimizing License Assignments and Driving Adoption
With a clear understanding of your licensing landscape and user needs, you can take actionable steps to optimize your Microsoft 365 license assignments and drive adoption.
Right-Size Your Licenses
Armed with the insights gained from your monitoring and reporting efforts, you can now make informed decisions about right-sizing your licenses. For instance, if you have users assigned to an E3 license but they primarily use Exchange, consider downgrading them to a more cost-effective E1 license.
Similarly, high-cost licenses for applications like Power BI, Visio, and Project often go underutilized. Industry reports suggest that around 11% of these licenses are typically unused and can be reclaimed, potentially saving an organization with 10,000 users approximately $40,000 annually on Project licenses alone.
Maximize User Adoption Through Education
Maximizing user adoption is crucial for ensuring that your organization is getting the full value from its Microsoft 365 investment. Develop an engaging education program that focuses on helping users understand the functionality and features relevant to their roles.
Provide training on how to effectively use the applications and services included in their licenses, and establish regular check-ins to reinforce this education. By empowering your users with the knowledge and skills they need, you can drive increased adoption and minimize underutilization.