November 11, 2022

Are you making these three costly mistakes in your Microsoft 365 environment?

Mark Pattie
Modern Work Practice Lead
Almost all enterprises are making these three mistakes when purchasing Microsoft 365 and maintaining their environment:

  1. cautiously purchasing too many licenses
  2. continuing to pay for inactive licenses
  3. buying Microsoft 365 packages with apps that employees don’t (or can’t) use

Microsoft 365 licenses are often a company’s most considerable software expense, so the wastage can be incredibly high (particularly in a high user environment). It’s not all bad however, because it’s easy to rectify with Data#3’s Microsoft 365 Optimiser service – which we’ll get to shortly.

At last count, there were nearly 345 million paid Microsoft Office users, globally*. There’s little doubt that Microsoft’s move into cloud subscriptions has paid off with numbers like these. Of course, the Microsoft 365 product portfolio has grown extensively to include a vast range of apps, tools and functionality beyond their traditional email, word processing and spreadsheet apps. By bundling up business-class email, cloud file storage, and secure communication tools, Microsoft 365 is indispensable for supporting communication and collaboration in today’s enterprise.

Are your Microsoft 365 licenses underutilised or oversized?

Microsoft 365 Enterprise licenses use a tiered structure – starting at E1 for basic business services, through to the E5 bundle, the most comprehensive suite of products and services. With so many options for small, medium and enterprise businesses, it is understandably challenging to get the balance right.

There is a significant disconnect between the entire suite’s products and the usage of those products. It could be that users fall back on the most familiar tools, or maybe it’s the sheer breadth of the solutions that it seems impossible to skill-up in each application. Whatever the reason, many businesses are paying for a full Microsoft 365 subscription but only using a small fraction of the available applications. Some are even paying for cloud solutions from other vendors that duplicate already available Microsoft 365 features. There’s another major issue too, and it’s a big one – an average of 56% of a business’s Microsoft Office 365 licenses are “inactive, underutilised, oversized or unassigned”^.

So, there’s actually two big deals here! When businesses suffer from “office bloat”, they are not only paying for far too many licenses, they are also not optimising their Microsoft 365 usage and wasting a considerable slice of their cloud budget. It’s all money left on the table and opportunities left untapped.

Take back control – and make substantial savings!

This is where Data#3’s Microsoft 365 Optimiser comes in. It’s a managed service from Data#3 that gives customers a better handle on their licensing. The initial review and subsequent ongoing monthly reviews provide a detailed level of visibility into your Microsoft 365 environment, helping uncover opportunities to:

  • drive adoption
  • optimise license usage
  • expose security vulnerabilities, and
  • provide IT with the insights needed to better govern their Microsoft environment and align the types of licenses they purchase with the needs of end users.

Ultimately, this service helps our customers overcome adoption challenges to realise efficiency gains and ROI.

The license optimisation payoff

Typically, in Data#3’s experience, an organisation using our Microsoft 365 Optimiser service achieves around a 600% ROI when comparing the cost of the service with the identified savings. Let’s look at how these savings are achieved through the lens of our customers who have optimised their Microsoft 365 environments with us.

A good chunk of IT’s budget goes on Microsoft 365 licenses, often without IT being aware of all the unused and underused licenses. A lot changes in a business. People move on to new jobs, go on maternity/paternity leave, change roles within an organisation which means their application needs might be different – yet their access and license remains the same. This is why understanding usage is so important – you can eliminate unused licenses, and ensure the licenses you do have are correctly suited to your users.

This has been the exact experience for many Data#3 customers… yet another customer – with over 9,000 employees – found themselves with an out-of-control Microsoft 365 environment. By leveraging the insights that the Microsoft 365 Optimiser service provides we were able to identify $1 million in savings through the right-sizing of licenses and removal of licenses that were not in use.

Looking more widely now, a recent analysis – based on more than five million enterprise workers – reflects this ROI level. For example, they found that based on employee app usage in E5 licenses, 38% could be downsized to E1 licenses. Additionally, on average, businesses that identify inactive licenses and then eliminate or reassign them could lower Microsoft 365 costs by 14% #.

This is all money and time that can be shaved off Microsoft 365 licensing and diverted to securing Microsoft 365, or improving adoption and user experience. There’s plenty more to Microsoft 365 Optimiser; you can dive a little deeper into license optimisation, as well as its chargeback or showback model, and security and productivity advantages in another blog in this series.

Let Data#3 help you better govern your M365 environment 

Contact a Data#3 Microsoft 365 Specialist to learn how much money Data#3’s Microsoft 365 Optimiser can save your company by driving adoption, optimising license usage, exposing security vulnerabilities and providing insights needed to better govern your M365 environment.

Data#3 is Microsoft’s largest Australian business partner with the highest certified level of competency across the Microsoft ecosystem. Our scale and expertise enable our unparalleled support, so our customers can confidently select, deploy, manage and secure Microsoft applications, products, and devices.

Contact A Microsoft 365 Specialist

* Office365 IT Pros (2022), Office 365 Reaches 345 Million Paid Seats [ONLINE]
^ TechRepublic (2020), Office 365: 3 ways your organization is mismanaging licenses [ONLINE]
# CoreView (2020), 50% of Microsoft 365 Users are Not Managed by Default Security Policies, CoreView Research Finds [ONLINE]