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A Practical Guide to Spotting Licence Waste before your Next Renewal

Microsoft 365 is central to how many organisations communicate, collaborate and protect their data. But as teams change, people move roles and new services are added, licence estates can become more complicated than anyone intended. The result is often a gap between what the business is paying for and what employees genuinely need. 

Your renewal is the ideal point to stop, review the estate and make sure your licences still support the organisation. Here are seven warning signs that your Microsoft 365 spend may be higher than it needs to be. 

1. Former employees and inactive accounts have still paid licences

When someone leaves, their access may be blocked quickly, but the associated licence is not always reclaimed at the same time. The same issue can affect old contractor accounts, test users and project accounts that are no longer required. 

A regular reconciliation between Microsoft 365 users and your current employee and contractor records can reveal licences that are still assigned without a clear business need. The important point is not simply to delete accounts. Data retention, legal and operational requirements should be checked first, then the licence can be removed or reassigned through a controlled process. 

2. Everyone is assigned the same licence

A single licence tier for every employee is easy to administer, but it may not reflect how different people actually work. A desk-based power user, a frontline worker, a temporary contractor and a shared device user are unlikely to need exactly the same services. 

Role-based licence profiles can make the estate easier to justify. Start with what each group needs for email, collaboration, security, device management, analytics and compliance. Then match the licence to the requirement rather than defaulting every user to the highest common tier.

3. You are paying for premium features that are not being used

Higher-tier Microsoft 365 plans can include advanced security, compliance, analytics and communications capabilities. Those capabilities may be valuable, but only when they are relevant, configured and adopted. 

If premium licences were purchased for a project, security initiative or future plan that never progressed, the expected value may not have materialised. Review actual service usage and speak with the teams responsible for the relevant features. A licence should be retained because it supports a current requirement or an agreed roadmap, not simply because it was included in the previous renewal. 

4. Standalone add-ons have accumulated over time

Add-ons are often introduced to solve a specific need quickly. Over time, organisations can build up separate licences for products such as analytics, telephony, project tools, conferencing or security without revisiting the overall mix. 

Create a clear inventory of base licences and add-ons, including the user, owner, purpose and renewal date for each. This makes it easier to identify duplicate assignments, licences attached to the wrong users, and capabilities that may now be available through a different package.

5. You are paying twice for overlapping technology

Microsoft 365 may provide capabilities that overlap with separate tools already used across security, device management, communication, file sharing or compliance. That does not automatically mean the third-party product should be removed. In some cases, overlap is deliberate and supports a valid technical or risk requirement. 

The warning sign is when nobody can clearly explain why both products are retained. Map the capabilities side by side, involve the technical and security owners, and assess whether consolidation is practical. Decisions should be based on requirements, configuration and operational impact rather than feature names alone.

6. Licence reviews only happen when the renewal quote arrives

If the first serious review begins when the renewal deadline is close, there may be limited time to validate usage, consult stakeholders and agree changes. This can lead to a simple repeat of last year’s quantities and licence mix. 

Treat licence management as an ongoing process. Set ownership, review changes in headcount and roles, monitor new add-ons, and begin formal renewal planning early enough to make evidence-based decisions. A renewal should confirm the right future position, not merely reproduce the current one. 

7. There is no clear Microsoft roadmap

Cost optimisation is not only about removing licences. It is also about understanding what the organisation plans to do next. Projects involving Copilot, Teams Phone, Intune, Power BI, security or data governance can materially change future licence requirements. 

Without a roadmap, organisations may buy too early, renew services that no longer fit, or miss value from capabilities they already own. Bring IT, security, finance, procurement and business stakeholders together to connect licensing decisions with the next 12 to 24 months of planned change.

What should you do before renewal?

Start with a structured review of users, licence assignments, service usage, add-ons, security capabilities, contract terms and future plans. The goal is not to cut licences indiscriminately. It is to make sure every licence has a clear purpose, an appropriate owner and a measurable connection to the needs of the business.

Ready to review your Microsoft 365 renewal?

Download Viatel Technology Group’s 15-Point Microsoft 365 Renewal & Optimisation Checklist to identify potential waste, risk and missed value across your environment.

Speak to our Microsoft experts about a Microsoft 365 licence review.

About Viatel Technology Group

Viatel helps organisations review, manage and optimise their Microsoft environment, aligning licensing decisions with security, productivity and long-term technology plans. Discover more information and resources on our Microsoft Licencing Solution and other Microsoft Solutions.