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If the title of this blog got your attention, then you might be one of countless IT Leaders struggling to understand the ever-changing landscape of Microsoft licensing.  The combination of the growing number of businesses fully migrating to Microsoft 365, the gradual retirement of legacy licensing programs (Open License), and more rigid qualification requirements for Enterprise Agreements (EA) make flexible, monthly consumption of Microsoft seem like an intuitive approach. Whether billed through Microsoft directly or through a CSP (Cloud Solutions Provider), clients can use and pay only for what they need. 

While monthly consumption models are marketed for their flexibility, it isn’t always easy to maintain and maximize value.

As a person on a lot of calls, I see some consistencies when it comes to clients and their M365 licensing:

  1. Every client I encounter is overspending—overprovisioned on license counts.
  2. Most users in the M365 tenant are not maximizing the value of the products available and either need to be educated on using the products or moved to a less expensive, simplified plan.
  3. Most SMB clients are not aware of alternative plans that include next-generation products and, in some cases, can be provisioned at the same cost as their existing, inferior plan.

Whether you are billed by Microsoft directly or billed through a CSP partner, it’s important to consider these four things to understand better your Microsoft licensing in 2021:

1. Don’t try to understand it yourself.

m365 licensing

One of the bigger time killers for IT pros in the SMB space is self-educating on Microsoft licensing and the differences between products.  Microsoft currently has 16 plans in the M365 space, all with similar names, yet all priced differently and serving different use cases.

 Working with a partner immersed in the world of Microsoft saves time, prevents headaches, and usually lowers your spending significantly. Ask as many questions as you want. A good CSP partner will have license experts on hand for quick response. 

2. Assess and optimize quarterly.

Optimizing Microsoft 365 quarterly

To prevent what I call “license sprawl,” I strongly suggest working with a CSP partner that is standardized on engaging with clients quarterly for the sole purpose of licensing recommendations.  These quarterly evaluations are the best approach to leveraging the benefit of cost savings in a flexible monthly program. It is also an excellent opportunity to leverage free value-added services.

A good CSP partner will provide education, reporting, and analytics above and beyond what is available in the M365 Admin Center. 

3. Plan for the future.

M356 Licensing

My favorite thing about discussing license optimization with clients is uncovering potential business transformation opportunities that lie ahead.  MicroAge is focused heavily on the compulsory security products (MFA, Conditional Access, Self-service password reset, Single Signon) included in Azure Active Directory P1 and P2 plans along with device management and zero-touch deployment for windows devices available in Microsoft Endpoint Manager (Intune and Autopilot)

 If you want a roadmap to a “cloud-first” strategy for your business, it starts with an informative license discussion. 

4. Stress test your CSP.

In most cases, a CSP provider is also your MSP (Managed Services Provider).  If you take my previous three points to heart, then it is imperative to ensure the CSP teams are certified and accessible. This is essential not only for license expertise but also the technical expertise to deploy and support the products that your Microsoft licensing will unlock.

 If you are interested in Microsoft Endpoint Manager (formerly Intune), your CSP can get you the licenses, but can they support it? The best thing you can do for your business is pushing your CSP/MSP for maximum value.

2020 taught us a lot.  The number one reason MicroAge is onboarding new CSP clients at an accelerated rate this year is that they realized their current CSP/MSP failed to support them during a challenging time.  A more basic item of consideration is license provisioning. If it takes your CSP longer than 24 hours to get a license provisioned or removed from your tenant, there is a problem. 


Whenever I interact with CIOs and other IT leaders, the most challenging questions I receive usually start with “Why?”. “Why are we doing it this way, is there another way?  Explain it to me.” And for any capable CSP and Managed Services Provider, the question should be easy to answer. 

Rick Trujillo is the MicroAge cloud business director, heading up our cloud initiatives and partnering with IT leaders to maintain their momentum and competitive edge. Rick has more than three decades of experience in technology and is dedicated to supporting organizations in driving their cloud-first approach while maximizing performance and value. 

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Our cloud services experts are here to support education and end-to-end services so you can get the most out of your Microsoft 365 environment. MicroAge is a Gold Microsoft partner—ready to optimize, architect, implement, and train your workforce in your Microsoft 365 and Teams environment—so you can maximize functionality and productivity.

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