Smarter Office 365 Licensing: Stop Over-Purchasing

In this article we’ll detail how you can show your worth as a partner and save your customers money by facilitating an increase in user productivity and maximizing their return on Office 365 licensing through a methodological approach to effective license management. The first part of this two-part series will focus on how to stop the over-purchasing of Office 365 licenses. Part two will cover Office 365 license adoption.

Now, more than ever, is the time for service providers to offer greater value by demonstrating ways that customers can reduce costs during an uncertain economy. License lifecycle management (LLM) for Microsoft Office 365 licensing is one of these opportunities where system integrators and MSPs can elevate themselves and become more than “just” a service provider. With the right tools, you can create big wins for customers using your knowledge and expertise around competent licensing strategies that can save organizations thousands, or even hundreds of thousands, of dollars.

License over-purchasing includes both the volume of surplus/unused licenses at any given time, but also the purchase of excessive and under-utilized licenses.

Start with a New Perspective

The first phase in this LLM process is to work with your customers to stop over-purchasing through a more effective license strategy that is underpinned by a data-driven approach. This will require collaboration among procurement, IT and business operations. The stakeholders on this team will need to wipe any preconceived notions from their minds around the outdated “license pool” approach and start with a fresh perspective. The goal is to optimize licensing to match the needs of users today. Forget the “what-ifs” and hypotheticals.

Understand Your Current Office 365 Licensing Situation

Next, a license inventory and analysis must be performed to understand the current usage and subscriptions better. The main goal from this analysis is to identify any unassigned licenses (over-licensing) as well as license under-utilization–a scenario where particular workloads are under-utilized or not utilized at all in the users’ base license, which means their license can be downgraded.

For instance, many Office 365 E3 and E5 licenses are typically under-utilized, with many of the users taking advantage of only three out of the five workloads, and many only using one or two workloads. Specific ways that these licenses can be downgraded include:

• E3 user that is only using Exchange and who does not require the compliance option could now be downgraded to an Exchange Online plan.
• E3 users using multiple workloads but with small mailboxes and using less than 1 TB of OneDrive storage could be downgraded to an E1.
• An E5 user that uses multiple workloads but does not require Advanced Threat Protection can be downgraded to an E3.

Identify User Needs and Build Functional Licensing Profiles

Depending on how far you are from a renewal, the above examples are a great way to retrofit organizations’ licenses to better match the needs of their workforces. But in order to really get in front of the issue and prevent widespread under-utilization, you first must