Take Control of Your Microsoft 365 and Office 365 Costs

In this blog, Principal License Consultant, Karl O’Doherty, discusses methods designed to control your Microsoft 365 and Office 365 expenditure and mitigate against financial waste.

Historically, one of the largest licensing elephants in the room was the rate of non-compliance associated with the Microsoft Office Suite. Many organisations failed to implement basic Software Asset Management (SAM) processes leading to under licensing or breach of licensing terms. This lack of control created a number of challenges;

  • Failure to track what versions and editions of Office were installed
  • Deployment and consumption methods that breached product use rights
  • Lack of oversight relating to the number of devices with Office installed
  • Not linking the correct entitlement with the versions and editions of Office installed

When the precursor for Office 365, the Business Productivity Online Suite ‘BPOS’ was launched in 2008, it heralded a belief that licensing headaches would be a thing of the past. Since 2008 there has been exponential Office 365 growth as customers adopt Microsoft online services at scale, yet there continues to be a lack of investment in license management. Therein lies the problem as without the necessary people, process and data-driven insights relating to SaaS license management, financial waste is a certainty.

Historically in the on-premise world when you failed to correctly manage licenses for Microsoft technology you ended up owing Microsoft money at some point in the future. With cloud, the tables are turned and failure to manage licenses for online services like Microsoft 365 and Office 365, you are quietly burning cash each month. From experience, the level of waste can be as much as 22% of monthly spend where Office 365 subscriptions are poorly managed.

Given this level of waste, I have outlined below 8 simple ways you can take control of your Office 365 expenditure and reduce cost today:

  1. Harvesting

Review and identify subscriptions that are inactive for 30 or more days and verify if licenses can be harvested. This can include the complete removal of licenses and associated monthly billing or redistribution to meet new demand.

  1. Non-User Accounts

Examine to what extent non-user accounts such as mailboxes, service accounts and RPA scenarios are consuming Office 365 subscriptions. Are you unnecessarily assigning feature-rich licenses against service accounts? Can you remove these subscriptions completely or scale back to a reduced feature license?

  1. License Buffers

Maintaining a license buffer can enable smoother operations by having a pool of licenses available to rapidly respond to new user demands. Failure to accurately forecast demand and not erring on the side of caution can create an unnecessary surplus of unassigned licenses purchased to meet perceived demand.

  1. Blinded by Bundles

Many organisations onboarded into Office 365 are using a ‘one size fits’ all licensing approach driven in part by enhanced discounts. Taking the time to understand how end-user requirements have evolved and how they align with available licensing models can enable significant cost savings where bundles can be rationalised, and procurement optimised.

  1. Profile & Right-Sizing

Office 365 cost control is a moving target that requires continual fine-tuning to optimise spend and control risk. Having visibility of Office 365 feature utilisation can identify oversized licensing. Using data-driven insights will enable accurate profiling of Office 365 end-user requirements on a continual basis that enables right sizing.

  1. Joiners, Movers & Leavers

Not having an effective joiner, mover and leaver process is a guaranteed way to waste money on unnecessary Office 365 licenses and can create potential security risks. Having the right level of cross-departmental collaboration and automation will stop licensing waste in its tracks and protect company data.

  1. Contractors

When onboarding contractor staff are there controls in place to qualify what level of Office 365 subscription, if any, they require? In many cases, contractor staff will bring their own devices, use their own email and productivity tools with only limited network access. Implement policy and process to profile contractor staff license requirements to prevent unnecessary subscription allocation.

  1. Reservation trap

For organisations that acquire Office 365 via the Microsoft Enterprise Agreement program, taking stock of consumption earlier in the true-up cycle is essential. Failure to identify allowable license reductions at least 30 days before the anniversary of your agreement can result in the rolling over of unnecessary licenses.

In Summary

Microsoft has transformed the way in which organisations acquire and consume licenses for their productivity and collaboration tools. With this transformation comes enhanced licensing controls enforced by Microsoft. However, this does not mitigate the need for investment in software asset management. If anything, organisations need to intensify their efforts to track and review their usage of Microsoft online services like Office 365 and failure to do so will create unnecessary licensing fees, license non-compliance and possible security risks.

Implementing some or all the tips outlined in this blog will provide a foundation for Office 365 cost savings. Remember cost optimisation for Office 365 is not a ‘one and done’ project – it is a continual process that requires a blend of policy, automation, technical and licensing expertise.

With deep expertise in Microsoft licensing, Version 1 is uniquely placed as a broad systems integrator that can support organisations through all the stages of their digital lifecycle. Further information on controlling your O365 and M365 cost is outlined in our webinar or contact us with any questions.

For support on Office 365 cost control, learn more about our Microsoft 365 licensing Health Check Service and take control of your unnecessary expenditure.