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Big Changes for Office 365 License Management: Are You Ready or Confused?

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AmyKelly Petruzzella
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Microsoft recently announced changes to their commercial pricing for Microsoft 365 — the first “substantive pricing update” since launching Office 365 a decade ago.

What You Need to Know

The pricing changes announced will go into effect in six months globally with local market adjustments for certain regions. On March 1, 2022, updates to Microsoft’s list pricing will go into effect for the following commercial products:

  • Microsoft 365 Business Basic (from $5 to $6 per user)
  • Microsoft 365 Business Premium (from $20 to $22)
  • Office 365 E1 (from $8 to $10)
  • Office 365 E3 (from $20 to $23)
  • Office 365 E5 (from $35 to $38)
  • Microsoft 365 E3 (from $32 to $36)
  • No changes to pricing for education and consumer products

Since 2017, Office 365 has increased its collaboration and productivity capabilities without increasing its subscription prices. In total, 24 apps have been added since 2017 to Microsoft 365 and Office 365, including Microsoft Teams, Power Apps, Power BI, Power Automate, Stream, Planner, Visio, OneDrive, Yammer, and Whiteboard, and more than 1,400 new features added over the last ten years – many at no additional cost to subscribers.

So, what does this price increase mean for your IT budget and your organization? Will you be expected to squeeze budget from other priorities, projects, and resources next year? Are you prepared to do deep dive reporting on your licenses and draw conclusions as to optimization next steps?

In this blog article, we will identify the key challenges with Office 365 licensing and offer considerations in preparing for license optimization ahead of the new price increases.

Office 365 Licensing Challenges

When it comes to Office 365 license management, organizations face two costly challenges:

  • Over-purchasing: The total number of licenses exceeds the number assigned.
  • Under-utilization: Unused licenses due to poor user adoption.

Over-purchasing consumes cash that could be better spent elsewhere, and under-utilization defeats the purpose of investment, which is to improve user productivity. Tackling these challenges requires effective Office 365 license management that needs to be based on solid data. In turn, a data-driven approach requires the right solution and insight to gather, present and make use of this information.

The most important information for Office 365 administrators is to identify active and inactive users by department or groups within the organization. Active users are easy to list based on the Office 365 user last logon report, say for the last week or the last month. A similar list can be prepared about users who have not logged on. But now comes the difficult part. For users who have not logged on, administrators have no way of finding out if users have not logged on due to vacation, business travel, or having left the company. A process-oriented organization will have mechanisms in place to track down such users automatically and administrators will be informed or determine in advance (or at the right time) about users who are not part of the company anymore. Otherwise, administrator must put measures in place where automatic alerts are sent to line managers about a user not logging in for an extended time as an on-going effort to determine the status of users.

Another difficult situation to handle for administrators is when temporary or contract user are brought in for a certain duration. It is these temporary users who are the most difficult to track down. Such users may leave after some time or may temporarily shift to another team in the same organization. Groups of these users may not exactly report to the same line managers or superiors. In fact, there are scenarios where temporary users sometimes end up enrolling multiple times in the same company and each time a fresh set of logins and licenses are assigned to them. Tracking down such Office 365 user licenses is difficult to deal with unless a proper process and accurate reporting is in place.

Four Office 365 License Management Considerations

Before Microsoft’s new pricing goes into effect, you should immediately begin prioritizing your Office 365 licensing plans and budgets for 2022. A thorough account of your organization’s Microsoft Office 365 licenses may be the difference of hundreds of thousands of dollars, or even millions in cost savings.

As you plan, you should take into consideration the following:

  1. Inactive Licenses
    • Identify inactive users so the licenses can be reclaimed for future use or oftentimes for employees who need add-on licenses like Project, PowerBI, or Visio for one off projects.
  2. Underutilized Licenses
    • It’s likely you have a subset of users who may have an expensive license that they are not leveraging or no longer need.
  3. Overlapping Licenses
    • Users may have add-on licenses that are already included in their license like Power BI Pro and a E5.
  4. Duplicate Licenses
    • No sense in paying for the same thing twice. Easily identify users who have duplicate licenses that can be reassigned.


Microsoft 365 and Office 365 license management are complex, and with upcoming Microsoft price increases it probably will not get any easier. As an IT professional, it is essential to stay on top of and understand the Microsoft licensing pricing changes and get a grasp on how they will affect your organization’s bottom line. It is now more important than ever you stay on top of these Microsoft changes and be ready to identify and report on your license utilization.


Office 365 License Management

Managing Office 365 licenses is no easy task and forecasting for future needs can be exhausting. At ENow, we believe in ‘buy only what you need, and adopt all that you buy’, and our solutions can help you achieve just that.

Efficiently and effectively optimize your Office 365 licenses to make informed licensing decisions with ENow Office 365 License Management reporting, including: customizable trend analysis, real-time licenses user lists, license addition history, and much more. Access your free 14-day trial today! Be the IT hero and drive out any hidden costs.

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