Photo by Greta Schölderle Möller on Unsplash
Avoid Over-Licensing in Microsoft 365: Smart Tips to Save Costs
Microsoft 365 is a popular choice for businesses because it has many useful tools that help teams work efficiently. However, some companies waste money by buying extra licenses that they do not use. This issue is called over-licensing and can lead to wasted expenses over time.
The good news is that it can be fixed with easy changes, such as keeping track of how much you use and changing your plans. These steps help you save money and keep things running well. This article explains over-licensing in simple terms, why it happens, and how to fix it without disturbing your team's work.
What is Over-Licensing?
Over-licensing means buying more software licenses than your team uses. This can happen if you buy extra subscriptions, keep licenses for former employees, or choose plans with features you don't need. This means spending money on tools that your team does not use, which causes unnecessary costs. For new users, this might look small at the beginning, but these extra costs can grow over time.
While it may seem safer to have more licenses, this can lead to higher costs over time.
Why Does Over-Licensing Happen?
There are a few common reasons why companies find themselves in this situation:
Lack of License Auditing: Without regular checks, businesses may overlook unused accounts or expired needs.
Overestimating Growth: Many organizations buy licenses in anticipation of rapid growth that doesn’t materialize.
Defaulting to Premium Plans: Some teams purchase expensive plans without assessing whether lower-tier subscriptions can meet their needs.
Inconsistent Offboarding: When employees leave, their licenses are sometimes left active rather than being reassigned or canceled.
Signs You Might Be Over-Licensed
Here are some common red flags indicating that your company might be overpaying:
Unassigned or inactive licenses in your Microsoft 365 admin portal.
A significant number of employees use only the basic features of premium subscriptions.
Lack of clear oversight on who holds which license and why.
How to Avoid Over-Licensing in Microsoft 365
Conduct Regular License Reviews: Schedule regular checks of your Microsoft 365 subscriptions. Review user activity to identify inactive accounts and unused licenses.
Use Microsoft 365 Admin Tools: Microsoft 365 provides reports that show detailed license usage. Use these tools to monitor patterns and make informed adjustments.
Audit User Needs: Engage with departments to understand their actual software requirements. In many cases, users only need basic features and can function well with a more affordable plan.
Automate Off-boarding Processes: When an employee leaves, make sure their license is removed or reassigned. Set up simple automatic steps to avoid paying for unused accounts.
Use Shared Licenses: For part-time or occasional users, consider shared accounts or special licenses designed for simple access. This can save money without affecting work.
Consider Third-Party License Management Tools: If your organization is large, consider using external tools designed to optimize license usage and provide more in-depth insights.
Example: Smart Licensing in Action
Let’s say, a small business purchases 100 licenses but only 60 of its employees need them. The remaining 40 licenses are not used. By tracking usage and switching to a plan with just the number of active users, the company saves money without any disruption.
Benefits of Proper License Management
Cost Savings: By eliminating unused licenses, businesses can reinvest the savings into other projects.
Better Budget Allocation: Avoiding over-licensing helps ensure your tech budget is spent on necessary tools rather than wasted subscriptions.
Improved Efficiency: Regular audits help identify workflow issues and ensure employees have the right tools for their roles.
Final Thoughts
Avoiding over-licensing in Microsoft 365 requires ongoing attention, but the payoff is worth it. By conducting regular audits, automating processes, and selecting the right plans, you can keep your expenses in check without sacrificing efficiency.
Taking small but consistent steps to review your licensing strategy can lead to significant savings over time. Remember, optimizing software costs doesn’t mean compromising on tools—it’s about ensuring you pay only for what you use.
Follow Umesh Pandit