How do you know if a large company overpays for Microsoft 365 licenses, and how do you govern them?

• Accounts of people who have left. Microsoft does not release a license by itself when a person is blocked or offboarded. If nobody removes it, you keep paying.
• Licenses not reassigned. A released license is not lost: it can go to a new user instead of buying another. Reassigning before buying is the simplest lever.
• Inactive users. Licensed accounts that never sign in or use the services.
• Plans above what is used. An E5 assigned to someone who needs only what E3 already includes.
• Duplicated add-ons. Features already in the user's plan, bought a second time. Microsoft documents conflicts between overlapping plans and the fix, which includes removing the redundant license.
• Shared mailboxes. According to Microsoft, they can store up to 50 GB without their own license.

• Assignments. The licenses page of the Microsoft 365 admin center shows assigned and unassigned seats.
• Usage reports. Per service (email, OneDrive, Teams, Office apps and others) over 7, 30, 90 and 180 days.
• Last sign-in. Microsoft Entra ID stores, per user, the last interactive and non-interactive sign-in. To detect inactivity, use the last successful sign-in property.

Last sign-in is not enough on its own: a service account or shared mailbox may never sign in and still be legitimate. With thousands of accounts, those cases are handled by rule.

According to Microsoft, E3 gives access to the core Microsoft 365 products and features. E5 includes everything in E3 and adds advanced security, voice and data analysis tools, including the Microsoft Defender and Microsoft Purview suites.

Microsoft's official plan comparison table (aka.ms/M365EnterprisePlans) lists, among others, these features as included in E5 and available as add-ons on E3:

The add-on suites for E3 are Microsoft Defender Suite and Microsoft Purview Suite, formerly called E5 Security and E5 Compliance, and they require E3 as a base. Two reviews follow:

• E5 for people who do not use those features. E3 may be enough.
• E3 plus add-ons versus full E5. Depending on how many users need each feature, the combination may fit better.

F3 is the frontline plan. Business plans are, according to Microsoft, meant for up to 300 users; above that, Enterprise applies.

If you buy through an Enterprise Agreement (EA) or through a Cloud Solution Provider (CSP) under the NCE model, the windows differ.

EA. Microsoft states that the subscription option lets you increase or decrease quantities every year. The review must be done before the anniversary: adding is easy at any time; reducing happens only in that window.

CSP/NCE. Microsoft gives a full refund if you cancel within the first 24 hours and a prorated refund up to seven days. After that, there is no refund. Changing term or billing frequency mid-term does not reopen that window and blocks reductions until renewal. A monthly term commits you for one month; an annual term, for a year. Choosing the right term per profile is part of the review.

You also cannot remove licenses that are assigned: release them first.

Yes, with judgment. A cheaper plan can leave out security or compliance features you need, and that creates a risk that costs more than the license. Removing the license from a shared mailbox under litigation hold can break a legal requirement. The review starts from the functions your company requires and only then looks for the tightest plan.

An annual review ages fast: joiners, leavers and role changes happen all year and in several countries at once. A continuous model includes:

• Group-based licensing. When someone leaves the group, the license is released.
• An offboarding process that always releases the license for reassignment.
• A calendar per contract. EA anniversaries and CSP renewals in one view.

GovLic is S4's service for governing Microsoft 365 licenses, built for large corporations. Its main trait is independence: S4 does not sell Microsoft licenses and gains nothing if you buy more. It looks only after the client's benefit, which a reseller or CSP partner cannot offer, because it sells what it reviews.

It works with read-only access to licensing data. The analysis is optimized with AI and backs each proposed adjustment with the rule that justifies it. Nothing changes without your approval: you or your IT team apply the changes. The work moves in phases:

1. Purchased but unassigned licenses. Dropped at renewal.
2. Oversized or underused licenses. Adjusted to real usage.
3. In-depth, tailored study. It starts from Microsoft's standard reports and completes them with information specific to your organization.
4. Ongoing readjustment service, monthly or weekly, instead of waiting for the annual renewal.

The savings phases (1 to 3) are charged on success, comparing cost before and after. The ongoing service is contracted separately and has its own cost. More at GovLic.

The financial result has no fixed figure. It depends on:

• the number of users and licenses, and the share of inactive or unassigned accounts;
• the plans assigned versus real job profiles;
• the security and compliance features you must keep;
• the contract type (EA or CSP), its dates, and who manages it;
• how many of the proposed adjustments you decide to apply.

In GovLic's savings phases, S4 charges a success-based commission on the savings achieved, with a calculation method agreed in writing before starting. If there are no savings, there is no charge. The ongoing service is a separate contract. GovLic is intended for organizations with more than 300 users, ideally several thousand, already on Enterprise plans.