How to Maximize Your Customers’ Return on Office 365 Licenses

The disparity between licenses purchased and utilized comes down to the nuanced needs of those involved in the purchasing process.

5 Min Read
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Find out how you can help your customers maximize their return on Office 365 licensing in our upcoming webinar. Help them buy only what they need, when they need it, and adopt everything they buy. (Click here to register.)

This webinar addresses the widespread issue of over-licensed organizations and how to remediate the situation. An analysis of over 3.4 million Office 365 users found about 18% of purchased licenses unassigned, which equates to approximately $150,000 in savings per year for a 10,000-person company when managed properly, and even more when scaled up.

Why the disparity between what is purchased and what is utilized?

It comes down to the nuanced needs of those involved in the purchasing process, from procurement and IT to the business and Microsoft’s license sellers. Each participant in the buying process has very different needs and motivations. Understanding how each is related is key when seeking a solution.

Here’s how the over-licensing tragedy builds:

  1. The first layer is purchasing, where they’re dependent on capital funding that is typically cyclical. Therefore, they purchase in waves to tide the organization over until the next round of funding is available.

  2. Secondly, the IT department is aware that these procurement cycles can result in a lengthy approval process. In order to ensure that there will be enough licenses to go around on-demand, they may request more licenses than are actually needed at the time.

  3. Lastly, purchasing managers are often encouraged to reduce contract costs, which creates a third layer where license sellers are motivated to create discounted, bundled SKUs that can be contradictory to actual business licensing needs.

Now you can see why everyone involved is on the surplus licensing bandwagon, but the licensing gap doesn’t stop there. Turning the initial gap into a gorge are the inconsistencies between licenses assigned and those actively adopted and used. This happens when users are assigned licenses without having a true grasp on actual user needs. Additionally, many organizations simply don’t have the proper tools to monitor active usage and react accordingly to the data, and very few are equipped with the skills required to drive adoption.

In short, it’s a “vicious” cycle resulting in over-licensed organizations, which is like leaving money on the table. So, how can you help organizations make sure there are enough licenses to go around and avoid surplus spending?

Using Data to Manage the License Lifecycle

The solution lies in License Lifecycle Management techniques and using reporting to gain visibility into license allocation and usage across the customers’ businesses. Having this data enables customers to reclaim licenses that have been provisioned in the tenant but are currently unused.

However, the type of reporting needed to obtain this data is not something you’ll easily find with Office 365-native tools. You’ll likely need to seek a third-party solution. One such third-party solution is Quadrotech’s Office 365 Management platform, Nova. By combining reporting and analytics with adoption, delegation and the application of policies, Nova provides a powerful License Lifecyle Management solution. These services make use of many integrated and extensible data sources to enable deeper operational control and visibility of Office 365 while removing a significant load from IT through sophisticated automation–all in one interface.

But gaining increased visibility can prompt more questions about licensing, such as how to increase adoption of specific workloads, how to automate license assignment and, in some cases, how to delegate license assignment to business managers. Quadrotech’s solution addresses each of these issues in the following ways:

  • License Management Optimization provides continuous measurement of license allocation and usage to ensure that licensing spend maximizes value to the organization.

  • License Management Delegation enables automated license allocation to users by policy. It also enables business managers to allocate licenses according the needs of their department.

  • Adoption Continuously assesses the state of adoption by workload and enables the organization to proactively drive user adoption with focused campaigns.

  • Internal Billing Enables accurate billing based on a clear understanding of business user license assignments and ensures the teams being billed understand exactly what they are paying for.

When these issues are identified and broken down, you can see that a third-party tool such as Nova provides operational efficiencies around licensing for more than just one department. For IT, time is saved by automatic license assignment based on role and the associated functional profile. Finance will see increased productivity through the enhanced reporting for internal billing and chargebacks. Across the organization, user productivity and the return on the Office 365 license investment is maximized by increased adoption of workloads and reducing surplus, both of which are measurable. An MSP can drive it all.

With the right data and the right management tools, ensuring that your customers’ Microsoft 365 licenses are not over-purchased in the first place, and then properly utilized and adopted, becomes much easier and results in your organization becoming a trusted advisor to your managed customers. If you can save your customers money, they’re likely to renew with you year over year– and maybe even reinvest their license savings in additional managed services.

Please join us for a webinar on March 25. We’ll discuss in granular detail the ways in which a third-party platform like Nova can provide a powerful License Lifecycle Management solution, creating operational efficiencies and saving your organization and your customers thousands of dollars. All registrants will be sent an on-demand video link once the webinar is complete, so be sure to sign up even if you can’t make the live broadcast.

Nigel Williams has spent 30 years in the IT industry in roles spanning Sales, Pre-Sales, Alliances and Marketing. He has worked in diverse company environments from startups to large corporations, with a focus on data and information management. His broad experience enables him to understand the needs of Sales, Technical and Marketing teams, and bring them together to grow and transform the business they work in.

This guest blog is part of a Channel Futures sponsorship.

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