Help CenterCost Optimization with Microsoft 365 Licensing: Best Practices
Microsoft 365 offers significant flexibility when it comes to managing licenses, which can help organizations save on costs while ensuring that users have access to the right tools. A key advantage of Microsoft 365 is the ability to mix and match license types based on the varying needs of users, unlike many other platforms that lock you into uniform licensing. Here's how to leverage this flexibility for cost optimization:
1. Monitor Unused Licenses
- Regularly audit your Microsoft 365 licenses to identify inactive or underutilized licenses. Tools like Microsoft 365 Admin Center and third-party solutions can help track user activity across apps like Exchange, OneDrive, and Teams.
- Deactivate or reassign licenses from employees who have left the organization or no longer need access to specific services.
2. Avoid Full-Year Commitments for Uncertain License Quantities
- If you're unsure about the exact number of licenses you need, avoid committing all licenses to a yearly plan. Microsoft 365 offers monthly and annual subscription options:
- Monthly plans offer flexibility for scaling up or down, allowing you to adjust license quantities as staffing needs fluctuate.
- Annual plans are more cost-effective but lock you into a set number of licenses for the contract duration, which means you can’t reduce the number of licenses even if your workforce shrinks.
Recommendation: Keep a portion of your licenses on monthly plans without commitment for flexibility, especially if you have a dynamic workforce.
3. Ensure Mobile-Only Workers Don’t Have Licenses with Desktop Apps
- For employees who work exclusively on mobile devices or tablets, there’s no need to assign them a Microsoft 365 plan that includes desktop Office apps (such as Office 365 E3 or E5).
- Consider assigning mobile-only workers plans like Microsoft 365 Business Basic, which includes access to the web versions of Word, Excel, and PowerPoint but does not include desktop apps.
4. Do Not Assign Intune to Contractors / Users Without Devices (Unless MAM is Needed)
- Microsoft Intune is a mobile device and application management tool. For users or contracts that don’t manage devices (e.g., those working on personal devices), Intune may not be necessary unless you specifically need Mobile Application Management (MAM) to protect company data within specific apps.
- Assess whether the user's role justifies having Intune or if simpler policies (like conditional access) suffice.
5. License Users Based on Their Actual Needs
- Some users, such as those who only need access to business apps like Power BI, Project, or Dynamics 365, may not require collaboration tools such as Exchange, OneDrive, SharePoint, or Teams.
- For these users, consider plans that exclude collaboration tools and focus only on the specific apps they need.
- This is especially useful for contractors or temporary staff who don’t need full access to your organization’s communication and file-sharing systems.
6. Run Office Apps on a Terminal Server with Business Premium
- Common Misconception: Many organizations believe they need Office 365 E3 or Microsoft 365 E3 to run Office applications in a multi-session environment like Remote Desktop Services (RDS) or Terminal Server. This is not the case.
- Business Premium Works Too: Microsoft 365 Business Premium can also be used to run Office apps on a Terminal Server. It includes Office apps with support for shared computer activation (SCA), which is a requirement for running Office on a shared virtual environment.
- Cost Efficiency: Business Premium is cheaper than E3 and includes a wide array of security features, such as Microsoft Defender for Office 365, Intune for device management, and Azure AD Premium P1 for identity protection. This makes it a more attractive option for businesses seeking both productivity and security without paying for the higher E3 license.
Final Thoughts:
By monitoring usage, avoiding unnecessary commitments, and tailoring licenses to user needs, you can significantly reduce your Microsoft 365 licensing costs while maintaining productivity. Implementing these best practices will help your organization optimize its investment in Microsoft 365.