Optimizing Office 365 License Management

Cost Savings Opportunities for Office 365
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Optimizing Office 365 License Management

Cost Savings Opportunities – Office 365 License Management


This blog entry is a continuation of our series on cost savings opportunities for Office 365. This topic covers the opportunities to Optimize License Management for companies that want to take complete control over their license distribution. The free admin center provided by Microsoft to help organizations administer their Office 365 environment is sorely lacking any useful licensing management capabilities. For example, if an organization wants to reconcile their license distribution and validate their billing compared with what is being utilized, there are no reports in the admin center to help them. The following subsections will help explain the opportunities to ensure efficient Office 365 license management and reduce unnecessary costs.

Reclaim Inactive and Unassigned Licenses

There are different reasons why accounts become inactive, but the most common is when interns, employees or consultants leave the company. If HR processes are not tightly linked to the corporate directory and Office 365, then those user accounts will remain intact, and so will the assigned licenses, even though the accounts are disabled. By accurately tracking accounts and identifying inactive users, those registered licenses can be reclaimed and assigned to new employees as needed, or refunded to save costs.

In addition, most organizations are oversubscribed for the number of Office 365 licenses they require. That is just the nature of a broad estimation process during the initial rollout and migration to Office 365. However, a few months after the transition there should be a regular monthly, or at least quarterly, activity for administrators to repurpose or return unnecessary licenses. By accurately tracking unassigned licenses an organization can effectively reduce their associated license costs by engaging a viable inventory management model which requires minimal overhead of excess licenses since new ones can be acquired instantly.
An example report from 4ward365 is shown below. It lists both unassigned licenses and also inactive licenses that can be processed for refunds.
Example Report Showing Unused Licenses and Inactive Exchange Users
Office 365 license management 4ward365

Reassign Licenses by Functional Requirements

Enterprise organizations perform an initial purchase agreement for different Office 365 license types from Microsoft when they are planning their migration. During this early assessment, they try to match the expected business needs of their user community. However, those initial guestimates are often proven wrong. It is only over time that organizations identify that some users do not require the advanced functionality of certain Office 365 workloads and they never will. By tracking the specific user activities of all accounts, especially after adoption campaigns have been completed, a clearer picture takes shape for the type of licenses needed for each business unit and for each individual job role.

By continually tracking license assignments and mapping that with the actual user activity in the Office 365 environment, an optimized management team can retrofit their licensing estimates based on real metrics. With this detailed information, the appropriate license types can be assigned to the users that have the business need for the corresponding workload functionality provided in Office 365.

Summary of Savings

The admin center for Office 365 does NOT provide the level of details needed to do effective Office 365 license management. Unless an organization writes their own PowerShell scripts to continually extract the information they need to scrutinize and assess their license distribution, and inactive accounts, they will not be able to optimize their Office 365 license management effectively. Today 4ward365 is the only all-in-one management solution for Office 365 that can help organizations take control over their license management. And a bonus for multi-national organizations, the 4ward365 interface is easily configurable in multiple languages to accommodate different admin teams from around the world.

If you are interested in finding out more about our 4ward365 solution and how it can help you reduce the costs associated with your Office 365 deployment, please visit our overview page online, or sign-up for a free trial at http://www.4ward365.com/free-trial 
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Carl Baumann

With more than 19 years of experience assisting business’ transition to Microsoft solutions, Carl has become a trusted advisor to Microsoft’s worldwide customers and partner ecosystem. He has assisted numerous Fortune 500 companies implement highly successful Office 365 business transformation projects.