In the first, second and third parts of this series the experts and MVPs, Sigi Jagott, Paul Robichaux and Ben Marshall discuss the need for effective Office 365 license management, trends and strategies. In the final part, they deliberate the challenges you may experience.  

Ben: Paul, you probably see a lot of variation with the use of, say, email or Teams. It’s getting broader by the second and the feature set lists are getting longer by the second. It’s just tough for somebody who doesn’t do licensing and doesn’t make a living at buying this technology, it’s tough for them to keep up with it. Have you seen a lot of confusion on what aligns functionally to the licensing, Paul? 

Paul: Absolutely. So, part of the problem, as you say, email is table stakes, right? Microsoft internally used to describe email as ‘a gateway drug to the cloud’. Everybody starts off using email and so talking about email licensing.  

Who cares, right? Figuring out what specific licenses you need to replace when you’re migrating to the cloud from on-prem, or to enable the capabilities you want, is tricky. Because it does change, as you said, one of the problems with the changing is the time scale. I’m trying to think of the right metaphor for this, but the time scale at which it changes doesn’t necessarily tighten your renewal.  

So, for example, if you renewed your Microsoft 365 SKU’s, say, six months ago, you might have thought, “Oh, well I have to buy this particular SKU so I can get Windows Defender Advanced Threat Protection. Well, oops, now this is different SKU for that”. So, if the last time you looked at what SKU’s/capabilities come with what licenses, that very well may have changed since your last renewal or since last time you did research. 

And it could change again, you know Microsoft is not – I’m reminded of Darth Vader when he says – “I have altered the deal and pray that I don’t alter it further”. They are free to change license allocations or the features that go into specific SKU’s, pretty much anytime they want to, and they do. You really have to watch closely.  

Ben: Yeah, it causes more confusion. One example that I can think of, Paul, in that scenario is we used to relate the E3 SKU’s as the ones that contain the Office Apps. The email was the enterprise features, which is the advanced features in Exchange from back in the day.  

Archiving was a big decision point, you know, am I going to archive with Exchange? Am I going to archive with a third party? Do I already own other third-party archiving? One of the changes recently is that the E1 SKU, which contains – and I apologize for getting in the weeds here – but the Office 365 E1 SKU contains the Exchange Online plan one SKU, and that didn’t used to have archiving. It does now. Now, it’s limited, not like the advanced SKU. 

Sigi: Exactly, but isn’t this a benefit so more features go down to the license SKU’s that are smaller? I think the biggest problem is not that additional features are added, the problem, I think, is that for some features you really need to purchase new SKUs, or higher SKU’s – like an E5 SKU – in order to get the features that you want at that time.  

So, planning here is crucial, correct?  

Ben: Yeah, that has been a gotcha on a couple of the new technologies, namely like what Paul just mentioned in the Advanced Threat Protection, it’s funny what SKU that aligns to. You can buy it by itself, or you can buy M365 E5. And there’s a couple more E5 SKU’s that it comes with, not Enterprise Mobility + Security E5.  

Like I said, these are just examples of how these moving parts work. I will say that the overall benefit of this, and the reason why I do believe that it is beneficial to – not just companies like mine who advise companies – but the end users in the customers themselves. Is that as they get more granular with the functionality and the licensing, it allows me to be more prescriptive with my licensing strategy.  

So, now I can create more user profiles, technical profiles and only buy to those and be very specific. Rather than getting this bloated bundle that I can’t use everything of so.  

Sigi: But how can you identify your user’s behaviour and those kinds of very trick information? In the past when we think about like 10 years ago, we weren’t even were able to identify who’s using public folders, for example, in Exchange. So how do you get to this information? Or what do you recommend for your customers to get to this information?  

Paul: So, it’s a bit of a puzzle, right? Microsoft has a lot of different data sources throughout the service. When I say service, I mean broadly across Microsoft 365. If you feel like organizing a treasure hunt, there’s a lot of information you can get.  

For example, if I want someone who has Power BI licenses, I like to pick on Power BI because this is a great example of a license that procurement thinks, “Oh, hey cool Power BI licenses, let’s buy some”. But knowing whether or not they are in use is tricky because when you assign a license to a user, you can get data about that from the graph, from PowerShell, or from the O365 portal. So, I can see, “Okay, Ben has a license. Sigi has a license”. I have to actually go look at the system, or the service audit log, if I want to see whether you have done specific things with Power BI like open a dashboard, correct?  

But then, if I want to do the same thing for Project or for Vizio – which are also extra cost licenses – you can activate a Visio license or activate a Project subscription and work only on local files that are never synchronized anywhere in your local device. There will be no record of it anywhere in the audit log, so it’s really difficult for me to tell that if you have this license, are you actually using it to do anything or not?  

Their third-party tools do the legwork of knitting together all these individual crumbs of data to give you a picture of who’s doing what and where. But Microsoft is just not assembling that data for you. In part, because they have so many other things to do. In part, because they sort of don’t have any interest in giving you a clear picture of what people are doing, because then maybe you won’t buy those licenses.  

Sigi: Or, you reduce your existing licenses because of the information Microsoft provided. They would be stupid in providing the details for it. 

Ben: Especially from the sales guys position. But I will say this; the money ball of the Microsoft world is adoption. Where it was just license activation, recently they’ve created the APIs that all these other innovators have taken the lead on. They’ve pulled those together and now can create a view into the usage. And this is something that, like I was saying earlier, IT really needed this last component. 

We always wanted to prove the return on investment, right? We always wanted to prove that the decisions we were making were the right ones. If we can see that it’s not having the impact that we thought it would, I need to have the ability to make changes. In the old days, I would never know if those users were being more productive because we provided these licenses for them. and that’s the name of the game. 

So, the best thing that Microsoft did with that treasure hunt the politics went through, is they created these APIs to allow third parties to get in there and provide some really relevant information to make decisions on. Like I said, the money ball thing, if the client is using it, that’s their money ball. They will renew it.  

So, when we talk to users and when we talk to Microsoft, we tell them the focus here is to make sure that it’s 100% adoption. When you hit 100% percent adoption, I can count on that renewal from a Microsoft perspective and everybody’s happy. It might not be the SKU’s they want to push, but as long as the client is using everything that they have.  

This tends to lead to other discussions, you know, this is integrated into that, right? That’s really the key to the understanding of ‘what you did made a difference’ and I can prove it now. I don’t know if any of these steps are more critical or less critical than the other, but they all play a part and making you an IT investment hero, for sure.  

Sigi: Absolutely, that’s very interesting information. So, Ben, where can we find more information about more details on the seven steps that you developed?  

Ben: Yeah, so I’ve been fortunate enough to get connected with a great blog site that even some of my co-workers are active on. It’s called So, you can find the article that goes into more detail called ‘7 steps for effective Office 365 licensing’. It’s out there now, ready to consume and it shows you how to get in contact with me if you have any additional questions.  

About the Author

Siegfried Jagott

Siegfried is a Microsoft MVP for Office Apps and Services. He has great expertise in Office 365 implementations with a special focus on Security, Messaging and Identity for international customers.

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