Smarter Office 365 Licensing: Stop Over-Purchasing

In this article we’ll detail how you can show your worth as a partner and save your customers money by facilitating an increase in user productivity and maximizing their return on Office 365 licensing through a methodological approach to effective license management. The first part of this two-part series will focus on how to stop the over-purchasing of Office 365 licenses. Part two will cover Office 365 license adoption.

Now, more than ever, is the time for service providers to offer greater value by demonstrating ways that customers can reduce costs during an uncertain economy. License lifecycle management (LLM) for Microsoft Office 365 licensing is one of these opportunities where system integrators and MSPs can elevate themselves and become more than “just” a service provider. With the right tools, you can create big wins for customers using your knowledge and expertise around competent licensing strategies that can save organizations thousands, or even hundreds of thousands, of dollars.

License over-purchasing includes both the volume of surplus/unused licenses at any given time, but also the purchase of excessive and under-utilized licenses.

Start with a New Perspective

The first phase in this LLM process is to work with your customers to stop over-purchasing through a more effective license strategy that is underpinned by a data-driven approach. This will require collaboration among procurement, IT and business operations. The stakeholders on this team will need to wipe any preconceived notions from their minds around the outdated “license pool” approach and start with a fresh perspective. The goal is to optimize licensing to match the needs of users today. Forget the “what-ifs” and hypotheticals.

Understand Your Current Office 365 Licensing Situation

Next, a license inventory and analysis must be performed to understand the current usage and subscriptions better. The main goal from this analysis is to identify any unassigned licenses (over-licensing) as well as license under-utilization–a scenario where particular workloads are under-utilized or not utilized at all in the users’ base license, which means their license can be downgraded.

For instance, many Office 365 E3 and E5 licenses are typically under-utilized, with many of the users taking advantage of only three out of the five workloads, and many only using one or two workloads. Specific ways that these licenses can be downgraded include:

Identify User Needs and Build Functional Licensing Profiles

Depending on how far you are from a renewal, the above examples are a great way to retrofit organizations’ licenses to better match the needs of their workforces. But in order to really get in front of the issue and prevent widespread under-utilization, you first must build out functional profiles for user roles to ensure that licenses purchased correlate to the actual needs of the users.

Determining usage like how much authoring Office 365 users do is helpful to understand what type of license they need. If they are just reading documents but not authoring or editing, then having those users access the applications via their browsers is the cheaper license option vs. one that provides the desktop version of the applications.

Help Your Customers Right-size Their Office 365 Licensing

Once your customers are able to monitor license utilization and have captured user functional requirements with your help, they’ll be better prepared to right-size purchasing based on that information. This will transform the purchasing process from the antiquated on-premise “license pool” strategy to a more flexible model that not only saves them money but better fits the needs of the organization and its users.

To learn more about how our Office 365 license management solution, Nova, can help potentially save your customers many thousands of dollars a year on licensing, please contact us today. Visit our website for more Office 365 License Lifecycle Management resources.

Nigel Williams has spent 30 years in the IT industry in roles spanning Sales, Pre-Sales, Alliances and Marketing. He has worked in diverse company environments from startups to large corporations, with a focus on data and information management. His broad experience enables him to understand the needs of Sales, Technical and Marketing teams, and bring them together to grow and transform the business they work in.

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