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CoreView Microsoft Office 365 Licensing Research Points to Dramatic Savings, Optimization Needs

CoreView did a deep analysis of over 3 million Office 365 seats to find how many licenses are underused, or even unneeded. With this information in hand, enterprises can save money by cancelling unneeded licenses, drive adoption of critical but underused services such as Microsoft Teams, and be fully prepared for an Enterprise Agreement (EA) renewal or annual O365 True-Up.

The research shows that 56% of all Office 365 licenses are not fully utilized, because they are unassigned, unused, over-sized or underutilized.

CoreView’s Microsoft Office 365 License Optimization Report looked at the license status or over 3 million enterprise employees using CoreView, or our free CoreDiscovery solution – which finds license optimization and savings opportunities, as well as vulnerabilities. Data also came from the CoreView Office 365 Health Check, which deeply analyzes enterprises’ O365 tenant.

CoreView defines inactive, underutilized, oversized, or unassigned licenses as:

  • Inactive licenses: Office 365 licenses that have been previously assigned but have not shown any usage activity in the last 30 days.
  • Underutilized and oversized licenses: iicenses containing productivity apps that are not being used by employees because they either do not need them or have not been properly trained how to use them.
  • Unassigned licenses: Licenses that are available to the company but have not been given to new employees or contractors.

In particular, enterprises struggle with managing inactive and unassigned licenses. Here is a breakdown of how Office 365 accounts stack up in terms of inactive or unassigned licenses:

  • Office 365 E1: 37% are inactive and 39% are unassigned
  • Office 365 E3: 12% are inactive and 42% are unassigned
  • Office 365 E5: 23% are inactive and 27% are unassigned

Enterprise Users Struggle with App Adoption

Many enterprises buy licenses larger than end users need, or buy what they think is the right license, only to find core servicers are never used. The answer is to either downsize the license or train users to fully exploit the applications. As a result, 44% of licenses are either underutilized or oversized.

Here are where E3 and E5 licenses stand:

  • Office 365 E3: 16% could be reduced to E1 licenses based on employee app usage
  • Office 365 E5: 38% could be reduced to E1 licenses based on employee app usage

Better Managing of Inactive Licenses Reduces Office 365 Costs by 14%

Inactive O365 licenses are an economic drain as they are paid for but not used. IT, however, usually does not know it has inactive licenses, and if it has an inkling, cannot identify how many inactive licenses they have and where they are.

CoreView data shows that the average business could reduce their total Office 365 costs by 14% if they discovered and better managed inactive licenses by eliminating or reassigning them.

“Businesses that effectively manage their Office 365 environment receive an outsize effect on ROI,” said Michael A. Morrison, chief executive officer at CoreView. “Our data shows that there’s room for improvement when it comes to Office 365 license management, with many organizations purchasing more licenses than necessary, failing to align licenses with actual employee app usage, or not using licenses they’ve already purchased. Organizations with an actionable view into their SaaS environment are able to transform this seemingly mundane task into significant cost savings and productivity boost.”

Improved License Management Would Reduce O365 SaaS Costs by 48%

CoreView research finds that most businesses are not paying enough attention to license management. The average business could reduce their total Office 365 costs by 48% by improving how they purchase and manage their Office 365 licenses.

License Management – Only Pay For What You Actually Use

A major selling point for deploying workloads to the cloud is saving money by paying only for services used. At least that is the idea.

The reality is that IT often pays for workloads, services and licenses they do not use.

IT pros always ask prospective cloud vendors how they measure the usage and charge for their services. With Microsoft Office 365, you simply pay for users through individual licenses. However, Microsoft does not consider whether all your selected users indeed use the services allocated. That is the job of IT. However, tracking licensed application utilization is hard to do, so most of the time customers just pay for the licenses allocated for their selected tier of service — regardless of whether all these licenses are actually used.

Whether paid for licenses are used or not is a huge consideration, and source of immense savings when you downsize to only the licenses you truly need.

Another consideration is Microsoft Office 365 licenses levels, selected service plans, or tiers of use. Again, it is ultimately IT’s responsibility to identify the right plans for your business and individual user needs.

If you want to truly benefit from the SaaS pricing model of Microsoft Office 365, you must:

  • Commit only to the licenses you really need (do not over-commit and carry unused licenses)
  • Assign licenses only to legitimate active users (by identifying inactive users with a license)
  • Identify the right plan for each user and your business

The Solution – Find Inactive Office 365 Licenses and Reallocate Them with Ease

So how do you identify the best plans, and limit the number of inactive users? With CoreView, you easily discover all inactive, oversized and duplicated Office 365 licenses and can cancel or reallocate them without ever leaving the CoreView management platform. This stops overspending, and at the same time identifies departments with low application adoption.

You can get a free CoreView Office 365 Health Check to discover license savings, application usage, and the security state of your Office 365 environment.

Adoption – Maximize Application Use and Office 365 Investment

Driving application adoption is essential to maximizing Office 365 investment.

Key to a successful adoption plan is clustering users based on different service usage and behavior – which helps drive targeted adoption and training campaigns.

Once you have an adoption strategy, it is time to train your users. Experts have found that standard training (classroom and eLearning) are not optimal since users forget 70% of what they learned within 24 hours.

The Solution – Adoption Campaigns and Just in Time Learning (JITL)

CoreView’s CoreAdoption usage insights and adoption campaigns ensures all employees keep pace as things change.

Meanwhile, CoreView’s CoreLearning is a Just in Time Learning (JITL) system with 2,000+ how-to videos lasting from 30 second to 3 minutes. The secret sauce is these videos are context sensitive, and play as the user is working with the application.

Read our Just in Time Learning (JITL) whitepaper to find out more.

Get your O365 user workload usage and security profile FREE with our new CoreDiscovery solution. You can get your free software now at the CoreDiscovery sign up page: https://www.coreview.com/core-discovery-sign-up/


Doug Barney was the founding editor of Redmond Magazine, Redmond Channel Partner, Redmond Developer News and Virtualization Review. Doug also served as Executive Editor of Network World, Editor in Chief of AmigaWorld, and Editor in Chief of Network Computing.