Microsoft 365 licensing, without the waste

Microsoft 365 waste is rarely one big mistake. It is a licence for someone who left in March, a mailbox that could have been shared, and a whole organisation on a tier bought for a feature two people use. None of it is dramatic. All of it renews every month.

Licensing terms and tiers change often enough that specific figures date quickly, so what follows is about where to look rather than what to pay. Check the current details against Microsoft's own pricing before you act on any of it.

Assigned is not the same as used

The first number to pull is not how many licences you bought but how many are assigned to accounts that have signed in recently. The gap between those two figures is usually the single largest saving available, and it is entirely invisible from the invoice.

Leavers are the obvious case. The less obvious one is the account created for a contractor, a shared machine or a project that ended, which nobody thought to remove because nobody was ever responsible for removing it. Sign-in activity reports will show you both.

Before deleting anything, understand what happens to the data attached to an account, because removing a licence and removing a user are different actions with different consequences for the mailbox and files. This is the step where haste causes real damage.

Mailboxes that do not need a person

Addresses like info@, accounts@ or support@ are frequently set up as ordinary user accounts, each consuming a licence, often with a password shared among several people. That is both an avoidable cost and a security problem, since a shared password cannot be tied to an individual and rarely gets changed when someone leaves.

Shared mailboxes exist precisely for this. Several named people access the address using their own credentials, actions are attributable, and the shared mailbox itself does not consume a user licence up to its size limit. Converting a handful of these is usually the easiest saving in the whole exercise.

Paying for a tier to get one feature

Organisations often standardise on a single higher tier because one requirement demanded it, most commonly device management or a specific security control. Everyone gets the expensive licence so that a few people get the capability.

Mixing tiers is allowed. The people who need advanced device management can hold the licence that provides it while everyone else holds something cheaper. The reason organisations avoid mixing is administrative simplicity, which is a legitimate preference, but it should be a decision made deliberately rather than a default nobody revisited.

The commitment you agreed to

Annual commitments are cheaper per seat than monthly, and monthly is more flexible. Neither is correct in general. What causes pain is being on an annual commitment for a headcount that fluctuates, then discovering you cannot reduce seats until renewal.

A workable pattern is annual commitment for your stable core headcount and monthly for the part that moves, accepting a slightly higher unit price on the flexible portion in exchange for actually being able to flex it. Know your renewal date. It is the only day the decision is cheap to change.

A review that takes an afternoon

Export the list of assigned licences. Cross-reference it against sign-in activity and against your actual payroll. List every mailbox that represents a function rather than a person. Identify which of your requirements genuinely force a higher tier and how many people they apply to. Find your renewal date.

That is an afternoon's work and it is usually the difference between a bill you can defend and one you have simply been paying. If you would rather not do it yourself, it is one of the things we do, and we will tell you the number before we touch anything.