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M365 Optimization Explained

Everything you need to know about optimizing your M365 environment.

How many businesses use Microsoft 365 for the connected workforce?

Microsoft 365 or Office 365 are used by over a million companies worldwide with more than 731,000 American organizations alone leveraging Microsoft’s leading platform. This M365 surge is expected to continue in the coming years with 77% of professionals reporting higher productivity rates while working remotely and with a changing workforce. Over the next three years, millennials will account for more than 75% of the American workforce, while Baby Boomers are retiring in droves and Zennials are entering the workforce amidst an all-out digital working revolution.

Work from home has introduced a fresh mix of challenges for IT teams across the business enterprise. From obstacles with learning and training on collaboration tools and video conferencing to dragging home-network internet connectivity, empowering a connected workforce is a journey for every organization. And whether you’re exploring Microsoft 365 and Teams or other alternatives, having a unified communications platform is essential to increasing productivity and collaboration. With Microsoft 365 and Teams, more organizations are able to integrate file sharing via SharePoint and shared Excel and Word docs into live meetings and shared Microsoft Teams Groups—keeping your organization fully connected.

How M365 empowers greater business composability?

Having a platform like Microsoft 365 or Office 365 in place is critical to business continuity and business composability, a top priority on Gartner’s 2022 CIO Agenda. Business composability is having a resilient and proactive response to volatility. Business composability empowers organizations to innovate and adapt businesses faster in response to changing market dynamics. Business composability is based on the application of key modularity principles to business assets to achieve the speed and scale necessary to thrive in disruption. Having a fully connected workforce is a critical aspect to sparking meaningful business composability. According to Gartner, business composability requires agility and flexibility, not just efficiency. It’s also known for a low-code or no-code services approach—a strategy that’s a hallmark of Microsoft 365.

How to optimize M365 licensing?

With the rapid proliferation of work from home and the increasing number of businesses fully migrating to M365, along with the retirement of Microsoft legacy licensing programs (Open License) assessing your Microsoft 365 return on investment is a must. Rigid requirements for Microsoft Enterprise Agreements (EA) can make flexible, monthly consumption sound easy. However you slice it, whether purchasing through a Cloud Solutions Provider (CSP) like MicroAge or through Microsoft directly, technology leaders only have to pay for what their organizations actually need. While monthly consumption models are marketed for flexibility, maximizing M365 value is far from simple.

In fact, most IT leaders don’t realize they are overspending on Microsoft 365—overprovisioning M365 license counts. In addition, the bulk of M365 users aren’t harnessing all of the productivity platform’s performance-rich capabilities and need education on harnessing these features for maximum value or should be moved to a more basic and affordable plan. Most small-to-medium business (SMB) technology leaders aren’t cognizant of available alternative M365 plans including cutting-edge technology and additional applications that can be provisioned at the same cost as their existing plan.

There are some proven best practices to optimize your M365 licensing investment to ensure your organization isn’t overpaying.

  1. Don’t try to understand Microsoft 365 licensing alone.

Self-educating on Microsoft licensing and the subtle differences between products and plans is one of the biggest time killers for IT pros harnessing M365 and O365 to keep their workforce connected. And it isn’t tough to see why. Microsoft currently has 16 available M365 plans, all with similar names, and all priced differently to serve vastly different use cases.

Working with a Microsoft Gold-Certified Cloud Solutions Provider like MicroAge can save hours of time and alleviate confusion. Why? CSPs are immersed in the ways of Microsoft and the constant updates and changes. With a good CSP partner, you have license experts ready for quick responses so you can ask as many questions as you want about which M365 and O365 plans meet your unique business needs and goals.

  1. Assess and optimize M365 licensing quarterly.

Prevent “license sprawl” or overbuying M365 and O365 licenses that go unused. Working with a CSP partner to regularly assess and optimize your approach can help you build a better Microsoft 365 ROI. At MicroAge, we recommend partnering with a CSP that is standardized on engaging with your technology leaders each quarter for the main purpose of M365 license assessment and recommendations. These quarterly M365 and O365 license evaluations are a smart approach to leveraging cost savings available. These regular Microsoft 365 license evaluations are also the perfect opportunity to tap into all the free value-added services available to ensure your team members are maximizing the technology investment.

  1. Think ahead with M365 and plan for the future.

In having active and ongoing dialogues with a Microsoft CSP partner, technology leaders can uncover potential for business transformation opportunities ahead. At MicroAge, our deep bench of cloud engineers is focused on the compulsory security products for Microsoft 365 including MFA, Conditional Access, Self-service password reset, and Single Sign-On. These capabilities are all included in Azure Active Directory P1 and P2 plans in addition to device management and zero-touch deployment for windows devices available in Microsoft Endpoint Manager (Intune and Autopilot). Get out of reaction mode and into a cloud-first strategy with an active M365 roadmap for your business and connected workforce—starting with an informative Microsoft 365 license discussion.

  1. Stress-test your Microsoft CSP.

Often, your CSP partner and MSP (Managed Services Provider) are one in the same. To fully optimize your Microsoft 365 investment, it’s imperative to ensure your Microsoft CSP teams are certified and readily available. Having an informed Microsoft CSP that’s accessible is critical for the technical savvy to deploy and support Microsoft 365 products and updates that your M365 licensing unleashes, not just for the Microsoft 365 licensing expertise.

If you’re currently exploring Microsoft Endpoint Manager (formerly known as Intune), your CSP can get you the licenses and needs to have the knowledge and capability to support them. Maximizing your CSP/MSP value is one of the best things you can do to promote greater business composability and resilience.

According to a recent MicroAge study surveying hundreds of IT leaders already leveraging MSPs, while 78% acknowledge the MSP impacts business growth, most are falling short in key areas including cloud strategy.

Whenever you interact with your Microsoft CSP or MSP, the best question you can ask relative to Microsoft licensing for M365 and 0365—or any layer of your cloud-first strategy is “why”. “Why are we doing it this way, is there another way, a smarter way?” Any capable CSP or Managed Services Provider should always have a simple answer.

Navigating the first M365 pricing and consumption changes in years.

Optimizing your Microsoft 365 investment—M365 or O365—is growing increasingly complicated now that the technology giant has rolled out the first major changes to Microsoft licensing pricing and consumption after several years. Let’s face it—Microsoft 365 licensing and optimization is no simple feat, one of the reasons why Microsoft’s partner community is undeniably one of its most valuable additions. For years, the Microsoft Cloud Solutions Provider (CSP) program has evolved into the core model for IT leaders purchasing cloud services. Relationship-focused support and consulting services can help technology leaders with zeroing in on unique requirements and goals to modernize and maximize their business cloud environment—all key traits of a good CSP partner.

Microsoft CSP partners are accountable for staying current on the many and constant changes across the M365 and O365 platforms and other Microsoft technologies. Your Microsoft CSP must be ready to break down and explain everything from Azure to Microsoft licensing in a comprehensive way that helps you make the right decisions.

Microsoft continues pulling the focus in on cloud services management—expanding the ecosystem of products and features available across Microsoft 365, Dynamics 365, and also Power Platform. Microsoft announced some pricing and sourcing adjustments in 2022 that may have altered the way your business consumes and optimizes its M365 environment.

Recent changes to Office 365 and M365 plans and pricing expected to impact businesses in three key areas include:

  1. A price increase for six of the core Office 365 and M365 Plans (went into effect March 1st, 2022)
  2. The New Commerce Experience (NCE)—including pricing adjustments varying by how the client purchases and manages their licensing launched on June 30th, 2022.
  3. Businesses qualifying for Microsoft (EA) Enterprise Agreements with 2,400 seats or fewer that can benefit from additional support and deeper insights can now consider working with a Microsoft CSP partner in the NCE program instead of entering or renewing an EA contract directly with Microsoft.

Microsoft is continually adding features and new products to its M365 (or prior O365) services. The price increases (for the growing Microsoft 365 business use cases and value) may even be overdue with the proliferation of remote work a few years ago. The Microsoft licensing price increase itself is impacting these six core Office 365 and Microsoft 365 plans:

  • Microsoft 365 Business Basic
  • Microsoft 365 Business Premium
  • Office 365 E1
  • Office 365 E3
  • Office 365 E5
  • Microsoft 365 E3

For the most current pricing and plans, visit the Microsoft website.

March 1st, 2022 was the official start date for the pricing increase on these specific  O365 and M365 plans. That didn’t necessarily mean if you owned any of these Microsoft licensing plans that your pricing went up then automatically. If your business pre-payed for Microsoft licensing a year at a time (via annual prepay), the price increase did not go into effect until your annual Microsoft licensing term renewal date.

If your business is on a month-to-month Microsoft license payment plan, behind the scenes you are still technically locked into an annual M365 subscription model. You are not required to stay on the annual subscription basis and can cancel and make license adjustments at any time. However, if you check your Microsoft admin center in the licensing section, you will notice that each monthly plan still shows a future expiration date. Any M365 licensing price increases will not take effect on your monthly plan until the subscription renews.

In addition, if your business provisions or upgrades any of these Microsoft 365 products prior to a new pricing increase, then it would be subject to an automatic price increase, which means your planning and timing, are well, everything.

New Commerce Experience (NCE)

Microsoft’s NCE program is different from the previously mentioned model on price increases, although they stack in some cases. Instead, NCE impacts all Microsoft cloud products for O365, M365, D365, and Power Platform—your business must evaluate its long-term transaction approach. Here are some strategies to explore, taking effect on June 30th, 2022:

  1. Continue month-to-month payments for these Microsoft products at a premium for the flexibility.
    1. A 20% price increase will impact these products.
  1. This premium is in addition to the price increase for the six core O365 and M365 plans.
  1. Businesses can commit to an annual or multi-year agreement for specific Microsoft products instead of paying month to month. If your business signs on for annual or multi-year:
    • Your business is not subject to the 20% price increase
    • Your organization can pay all upfront or has the option of paying off the commitment monthly. Either way, you are responsible for paying the entire commitment, even if you try to cancel early.
    • Your partner for the subscription, either Microsoft Direct or a CSP provider cannot be changed during the commitment term.
    • Your organization is price-locked for the products provisioned during the commitment term.
    • Businesses can increase Microsoft 365 license counts at any time, but cannot reduce license counts until the committed term is up for renewal again.
    • Businesses can upgrade products in the committed Microsoft 365 plan at any time.
    • If your business committed to NCE after June 30th, 2022, it would also have been subject to the price increase for the six O365 and M365 plans detailed above.

If your business is currently purchasing a Microsoft cloud plan, you have a subscription in place for your products already. Whether paying upfront annually or month-to-month, the price increase for the six plans and NCE doesn’t take effect until the subscription renewal date, which was on or after June 30th, 2022 for NCE specifically. February 1, 2023 was the official deadline to fully transition to the NCE program for all Microsoft clients.

Enterprise Agreements

The Microsoft Enterprise Agreement has been promoted and sold as the most cost-effective and value-added program for decades. The Enterprise Agreement includes caveats including a long-term commitment (three years), hefty annual payments, and a general lack of flexibility (with license reductions applied annually).  However, for large organizations, EA is an important option to explore with generous volume discounts.

Starting on June 30th, 2022, the Enterprise agreement for clients 2,400 seats or fewer was price leveled to match the upcoming New Commerce Experience (NCE) changes. That means existing or potential Microsoft EA clients may not have seen the volume pricing benefits they experienced previously.

With these recent updates and regular changes from Microsoft, the relationship and support-focused CSP model with NCE must be carefully evaluated. Organizations using 2,400 seats or fewer can still have an EA. Microsoft’s minimum seat count is 500 seats. However, depending on your organization size, M365 EA pricing might not be as beneficial as the legacy model.

The Microsoft 365 pricing and program changes are challenging both to understand and assess. It is essential to consult a partner that carries Microsoft licensing expertise, gold certifications, forward-thinking services, and the flexibility and ability to explore options with your user benefits in mind.

More on that here in this Video Blog on the Microsoft 365 licensing and pricing changes that are quickly approaching.

Preventing M365 data loss with a third-party backup solution.

Over 3 million businesses are added to Microsoft office monthly. While Microsoft 365 already includes a vast array of best-in-class solutions, a comprehensive backup of your data isn’t one of them. IT leaders can save thousands (or millions) of business dollars by investing in additional layers as an essential part of your Microsoft 365 strategy. Building the right M365 backup approach can protect data from security threats, accidental deletion, and policy gaps. Backing up the Microsoft 365 environment makes quickly restoring individual items or entire applications simple with little to no downtime and maximum recovery flexibility. 80% of IT teams experience preventable Microsoft 365 data loss due to a lack of 3rd party protection. Learn more about cloud backup for your M365 environment on our Cloud Backup Services Explained page.

Protecting your M365 environment and users.

To empower business continuity and a safe, productive remote workforce in a Microsoft 365 environment, your organization must invest in an additional layer of security. The baseline security incorporated into M365 the suite isn’t sufficient to arm your organization against accelerating cybersecurity threats, with attacks spiking 500% in 2020 alone.

Securing your organization’s perimeter with Firewall and Web Security aren’t just good best practices, but necessary basics for any organization. Harnessing email security and continuity can help prevent malware and phishing attacks, and endpoint security is imperative to protecting your organization from evolving malware security threats.

All of this is manageable with the right third-party Microsoft 365 cloud security to promote simple, cloud-based managed, and interconnected functionality with current and capable Cloud Security.

Fueling meaningful collaboration with Microsoft Teams.

Make every hour and meeting count with Microsoft Teams. The leading collaboration platform is used by over 44 million users daily. Microsoft Teams is a secure platform that regularly adds new productivity and collaboration hacks for your connected workforce.

As you probably know already, Microsoft has a reputation for its constant and abundant updates. Don’t get discouraged if the button you click on in Teams every day gets moved. Many of these changes are making room for more innovative products to be incorporated into the application and across the Microsoft 365 suite. Having a CSP to offer deeper insights and comprehensive training on the latest Microsoft Teams capabilities and how they apply to your business is mission-critical to driving endless collaboration and unparalleled productivity.

Leveraging all the M365 capabilities.

After optimizing, backing up, and securing your Microsoft 365 environment, knowing how to navigate it while unleashing all the capabilities for a maximum return on your technology investment is essential.  Absorbing and learning each Microsoft 365 layer and capability can be a time-consuming and even byzantine task in addition to the day-to-day IT responsibilities that keep your business secure and in motion.

That’s why it’s incredibly helpful to bring in Microsoft 365 experts to support your IT leaders and stakeholders with a complete rundown. So you can ensure that no M365 capabilities (that you’re actively paying for) are left behind. Outside expertise can quickly elevate your team’s acumen and approach on the Microsoft 365 platform while saving them hours of self-education and testing that cuts into your user experience, business innovation, and bottom line.

Rediscover Microsoft 365 with the cloud experts.

Connect and secure your workforce with the team members, resources, and information necessary for maximum collaboration and productivity with a trusted Cloud Services Provider (CSP)—all on a powerful, best-in-class Microsoft 365® cloud environment. Our Microsoft Gold-certified cloud engineers at MicroAge optimize and protect your environment. Connect with the cloud experts now—call 800-544-8877.

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