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The O365 License Lifecycle Spectrum

28 Aug 2020 by Nigel Williams

O365 License Lifecycle Spectrum featured image

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Our work with Microsoft Office 365 customers brings us into contact with a variety of approaches to managing the license lifecycle. We’ve combined the approaches of several organizations at different stages in their license management journey in a short narrative to describe each end of what we refer to as the License Lifecycle Spectrum – the difference between state-of-the-art and unimproved Microsoft license management practice.  

We’ve focused on five points of comparison: license and purchasing strategy; user requirements; license utilization; license adoption; and billing. The contrast between each end of the spectrum is very marked.  That isn’t surprising as we’ve deliberately combined the practices of several organizations who really understand Office 365 license management while doing the same for organizations that have yet to get to grips with it.

The reality for most organizations is of course more nuanced, but the contrast between these very different states clearly demonstrates the business advantages of mastering the license lifecycle. 

Enterprise A – Leading 

Our strategy is to purchase only what we need, when we need it, and to use everything we buy. We profile our users and make use of the advantages that cloud licensing provides to keep our licensing fast and lean.  

“Our user profiles enable us to implement license tiering across the user base. The top tier is users with the highest functionalitysecurity and compliance needs. The lowest tier is the frontline users, who need to consume data and collaborate rather than author. In between, we have a number of tiers that are based on business purpose and typical work practices. 

“Understanding the differences in how users consume information, how they collaborate, and if (and how) they author is really critical to determining the user profiles. Our default tiering scheme works well but we have the data to downgrade users if we see a lower cost license would be more suitable. 

We have good visibility into our subscriptions, license assignment, license utilization, and license activity with a dashboard that we can drill down into if needed. We can do this without worrying about tracking and managing all the data sources and we retain the data for a year, so we have a good trend line.

Example dashboard within our Office 365 reporting software

Example dashboard from Nova’s License Lifecycle Management functoin

“We keep a close track of our high-value licenses and our utilization of them is high as a result. For base licenses and high-value licenses we are currently tracking at 97-98% utilization and we work on the basis that this is pretty much the practical maximum.  

“We understand user adoption of each workload pretty well. We capture a baseline data set for each workload using workload specific metrics and if need to run an adoption campaign we can deliver one that includes ‘why to’ and ‘how to’ content to get the adoption rate up. Educating the users on the technology they have works much better if it’s based on their needs so the user’s response to our adoption drives has been pretty positive.  

“We have a business unit view of the data, so it is straightforward for us to provide Line of Business billing because we have the data in the format we need. Ensuring the business units know what they are paying for helps us engage with them to ensure our purchasing and utilization are both tracking well. 

O365 License utilization

Quadrotech customer analysis based on 1.54 million E3 users

Enterprise B – Lagging 

We are working to essentially the same licensing model as we did on-prem, which relies on a fairly substantial license pool due to our procurement cycles, which can be quite long.   Our licensing is essentially one size fits all as we don’t have a process for determining user requirements or enough visibility into license utilization to act on.   We know we need to update our strategy; we just haven’t got to it yet. 

We accept that our one size fits all license policy for the vast majority of users isn’t completely efficient and there is probably a fair amount of scope for license downgrades, but as yet we haven’t determined how to capture our users needs in a way that maps to the licenses or to automate the capture of the data we need, so right now most users just get an E3. 

We have a full picture of the licenses we’ve purchased but only a partial picture of how they are used.  We’ve struggled to get a consistent and current view and pulling the data and making it usable is fairly manual and time-consuming.  The data we collect only goes back a couple of quarters, so don’t have a really useful trend line for the data we have. 

We haven’t had a specific focus on workload adoption at this point Exchange is a given and everyone is using Teams much more than last year, but we don’t have much of a sense of how OneDrive, SharePoint and the other workloads are being used. 

We’ve been asked for Line Business billing and scoped it, but its just too much work to assemble and present the data properly. 

Mastering O365 License Management

While these contrasting pictures are constructed from multiple organizations it’s clear that there are significant differences in Microsoft license management practice.  

The good news is that the technology to support a leaner and more agile license management practice exists today and the ROI is compelling. License Lifecycle Management is just one of the features of our Nova Office 365 Management Software.

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To learn more about Nova and how you can immediately identify significant cost savings with effective license management, please contact our specialist team to arrange a demo