Microsoft 365 Optimization

By Alex Geuken. May 18, 2020.

Going into any Cloud solution, SaaS or IaaS, is similar to getting your first mobile phone and contract subscription – no one knows exactly how much the bill will be. Today, we have a similar challenge with cloud; how much am I paying? And more importantly, what am I paying for?  

With Microsoft 365, Microsoft wants you to standardize on E3, just as they wanted you to standardize on Office Pro Plus for all users. 

The Difference between Microsoft 365 and Office Pro Plus licensing for Enterprise customer (EA Agreements) 

When you are on an EA agreement, Microsoft encourages you to purchase Office Pro Plus for either all users, or all computers. This is a standardization they use to ensure Office Pro Plus is licensed for almost all companies. Microsoft has been known to do the same with Core-CAL, Windows and E-CAL. If we are honest, how many employees actually use the Pro Plus functionality in Office and how many could have used Office Standard instead? When moving from On-Premise to the Cloud with Microsoft 365, it’s not really different beyond terminating Exchange On-Premise, to transition to Exchange Online. Microsoft incentivizes you to move all users from Office Pro Plus to suites M3 or E3 – the difference is that the standardization requirement is no longer a concern. Here is your opportunity! 

The Opportunity  

In essence, with Microsoft 365, you are not required by Microsoft to purchase Office Pro Plus for all users/devices anymore. You can now mix and match users between suites F1-E5 licenses. If you are on a perpetual EA and have Office with SA, you can terminate your SA and purchase E1 for most of the users. And your Office 2016 Pro Plus is still capable of being used with the cheaper E1 subscription, so you get more or less an E3 experience, for an E1 price. Microsoft doesn’t want this to happen and discounts the transition with a “from SA” license. This will bite you in the next renewal. If someone needs Exchange archiving or any other component that is only available in the higher Microsoft 365 suites, you can purchase that functionality via a standalone SKU. With a perpetual EA, you have invested in stronger assets, now you have the chance to capitalize on your investment! 

As you can see Microsoft is still using office 2016 Pro Plus, see picture from Microsoft. 

Consider G Suite from Google and why you are moving to a SaaS solution from On- Premise 

If you are considering moving away from your On-Premise Office to Microsoft 365, essentially, you are moving from On-Premise to SaaS applications. Firstly, it is wise to evaluate the different options on the market and the biggest competitor against Microsoft is Google and its G Suite applications. Google enters the market from different angles to Microsoft, which evolves from On-Premise environments – which is where its strength lies. Google is born in the Cloud and has its strength in the Cloud. If you remove your Exchange server but remain on your perpetual EA with SA, and get exchange online, it becomes less costly.  

User Profiling 

To build your Microsoft license user profiles, you should use accurate software usage data. For example, Xensam provides pre-built reports where you can see each different Microsoft 365 component and its usage.  

Example of defining your different users: 

E3: High usage of Excel, Teams and Onenote (need local installation of Office Pro Plus) 

E1: Low usage of Excel, high usage of Word and Powerpoint (Don’t need local installation, Web App is enough) 

F3: Mainly uses Email and Sharepoint 

Managing Microsoft 365 

The biggest difference between traditional EA licensing and modern Microsoft 365 licensing is that before you only needed to know either the total amount of users, or devices, for the annual True-Up. Now things are a little different. With Named User licensing and multiple suites, you must analyze and control your Microsoft users. This can be complex specially in global organizations. A good inventory source for analyzing users is the Active Directory. If the user is not in the AD, but has a Microsoft 365 license, it can be a consultant, part time worker, or ex-employee – commonly known as “Zombie users” Do they still have an active Microsoft 365 license? Compare the AD against the Microsoft 365 portal to learn of all potential “Zombie” users.  

You need following to manage your Microsoft 365 licensing: 

  1. User information (AD or HR system) 
  1. The Microsoft 365 portal with the licensing information 

Compare the data; do you have more licenses than active users? 

To optimize your Microsoft 365 you need following: 

  1. User information (AD or HR system) 
  1. The Microsoft 365 portal with the licensing information 
  1. On-Premise Active Usage data 
  1. Web App Active Usage data 

Now we use this data set to compare and optimize based on your user profiling. This should highlight who can we downgrade from a higher suite (E3-E5) to a lower suite (E1-F1/3), to cut the cost of Microsoft 365? 

Using the power of Active Usage, you can now determine which users should be allocated which license. Here you can save cost. 

Xensam’s four sources of trustworthy data: 

  1. AD connector 
  1. Microsoft 365 connector 
  1. On Premise Active Usage 
  1. Web App Active Usage 

Xensam automates all of this with pre-built Reports

Both the connector to Microsoft 365 and AD is included with Xensam. The intelligent agent will normalize both On-Premise applications and Web apps. Xensam also provides Total Usage and Active Usage. Total Usage shows how much the application has been opened (running in the background), and Active Usage shows how much you have actively worked with the application. For example, if you open Outlook first thing in the morning, and then it is open the entire day until 5PM, this means 8 hours of Total Usage. However, Xensam will also show how much you have actively you have actually used Outlook, which could be 45 minutes or so. Xensam will provide pre-built reports, overview of all Microsoft 365 users, licenses and also Optimization Reports, Usage per Component report, and Double Assignment and Microsoft 365 users, that are not in the AD. 

To see how easy it is to manage and optimize your Microsoft 365 subscription, contact us for a demo by emailing