Managing Microsoft licensing costs effectively is a challenge for almost every organisation, as many businesses of all sizes are likely paying significantly more for their licenses than they need to be.
Why Microsoft licensing costs can be confusing
Entire books have been devoted to Microsoft licensing, and the industry analyst firm Directions on Microsoft even holds a “boot camp” to help customers better understand Microsoft’s licensing schemes. This complexity is intentional, as it allows for a highly granular approach to software access, but it also makes it incredibly easy for costs to spiral out of control if you aren’t paying close attention.
New features are constantly being added, and are offered in various other bundles, under different names and levels. For example, a feature that was once an add-on might now be included in a core bundle, or vice versa.
The plans are named based on Microsoft’s intended market such as Consumer, Business and Enterprise. Microsoft know that not everyone is the same within a given market, so they have different levels within each market, with varying features. From a basic productivity suite to high-end data analytics and security tools, the breadth of choice is immense.
Plans range from a Microsoft 365 Business Basic for $6.90 per user per month through to a Microsoft 365 (Enterprise) E5 plan at $78.30 per user per month. To effectively manage Microsoft licensing costs, you need to understand where your users actually sit in this hierarchy. Without a clear audit of your requirements, you could be paying for an “Enterprise” solution when a “Business” plan would suffice.
Microsoft 365 Licensing should match user requirements
If you are licensing all of your users in the same way, it’s probably time for a change. The first step to lowering your Microsoft licensing costs is to consider how the employees in your organisation vary in their technology requirements. Not every staff member requires a full desktop suite or advanced security analytics.
It can be very tempting to go for the ‘all you can eat’ plan and just buy these licences for your entire staff. The assumption is that whatever feature you need will be included at the highest bundle level. But, here’s the challenge…
Imagine in scenario 1, you have a team of 20 staff members. If you had them all on Microsoft 365 E5 ($78.30/month/user), you’d be paying over $1,500 each month. Amongst other things, they’d be able to use Power Apps and advanced analytics capability—features that are fantastic, but only if they are being utilised.
In scenario 2, you realise your staff don’t need anything more than what is already included in the Microsoft 365 Business Premium plan at $27.50/user/month. These licences allow your staff to work collaboratively, efficiently and securely, and that is enough for their specific roles. You’d then be paying $550 every month, which represents a saving of over $11,000 per year, an excess of money that you could reinvest in other parts of your business and significantly reduce your Microsoft licensing costs.
As a Microsoft Gold Partner, our team makes it a priority to stay on top of the technology evolution and understand the minutiae of Microsoft licensing so that we can make the best recommendation for our clients. We look beyond the price tag to see the actual business value being delivered.
If you are considering a Cloud migration, a Microsoft product upgrade or simply want to save money on your subscriptions, talk to us today. Taking the time to perform a simple audit of your Microsoft licensing costs now can lead to massive long-term dividends for your IT budget.
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