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How to Optimize Your Office 365 License Types

Migrating to Office 365 isn’t as smooth as we’d like it to be. Usually, large and enterprise organizations estimate how many users will need licenses. Then, they’ll estimate what tier of licenses they’ll need. Finally, they’ll sign an agreement and make a purchase based on those estimates.

But estimates & expectations rarely match reality. First, most larger businesses overestimate the number of seats they need, contributing to overspending. Second, they overestimate the functionality that users will need from their Office 365 license types.

So, after a few months, the actual needs of the organization become clear. That is, if they perform an audit and analysis of user needs and behavior. Here’s what those analyses typically find.

Optimizing office 365 license types with hypershift

You can’t manage what you can’t measure

Let’s be clear: no business will find out where they overspend on Office 365 licenses if they don’t measure usage. And, unless they have a dedicated staff or expertise to measure that usage, they may be out of luck.

Fortunately, there are several vendors who have that capability. Even a partial overview of license cost optimization can reveal overall usage activities, and number of seats needed vs purchased. And as a bonus, we can typically security vulnerabilities during this process too.

understanding license options

Non-enterprise businesses often opt for business level plans, which are relatively cheap and include a basic suite of productivity features, applications, and services.

Enterprise-level businesses use enterprise plans with advanced, comprehensive suites of productivity features, applications, services, and storage. These plans also will enable some forms of compliance framework and added security.

Both business and enterprise plans feature several tiers of Office 365 license types. The higher the tier, the more bells and whistles—and a higher cost, to boot. Often, larger businesses and enterprises overestimate what users need. They err on the side of caution, meaning that many users have access to a host of applications and services that they’ll never use.

By auditing user behavior, organizations can see exactly which license types and tiers each user needs. Simply measuring this behavior and adjusting licenses to fit can save thousands of dollars per month.

What to Expect from an Office 365 License Audit

There are a few things that you should look for in an audit of your Office 365 license types:

  1. License usage and service adoption. This should show you
    1. How many seats your organization pays for
    2. A breakdown of seats by license type
    3. Any additional services included
    4. Usage statistics for all license types
  2. OneDrive storage consumption. Office 365 cloud storage can reduce infrastructure cost, providing further savings and higher efficiency.
  3. MS Exchange usage. Getting the most out of your email system is key. For example, do you have enough or too many extra user accounts, enough or too much storage?  How much SPAM do you receive
  4. Security insights. A close analysis of Office 365 licenses can reveal vulnerabilities. For example, it might show where multi-factor authentication is needed, or if there are any old passwords that need to be updated.
  5. Licensing tier comparisons. This is the big breakdown showing which users actually need higher license tiers and which don’t. Typically, there are many opportunities for savings here.
  6. An overview of findings and recommendations. Simply seeing graphs, numbers, and licenses can be confusing. A brief breakdown of findings and recommendations puts all the technical stuff into plain English so you can understand what you’re looking at.

This kind of audit almost always turns up a few areas for savings and improvement. Furthermore, larger enterprises may be able to save hundreds of thousands per year on their Office 365 spend alone!

Next Steps for Office 365 License Analysis

Hypershift is a consulting organization focused on SaaS, subscription software, and cloud technologies. We help organizations navigate their shift toward subscription software models. Our mission is to ensure best-in-class security, support, and management to optimize enterprise-level cloud strategies.

We’re happy to provide a free rapid license assessment of your current Microsoft agreement. We offer a partial overview of your Office 365 usage and patterns, cost optimization recommendations, and security vulnerabilities. You can use this assessment to cut wasted spend and evaluate a licensing renewal.

Get your free Office 365 audit and rapid license assessment here. We’ll give you a complimentary Echo Flex for your time.