How To Optimize Microsoft 365

Looking for smart ways to cut costs in 2025 and beyond? Take a look at what some software as a service (SaaS) experts are starting to call “license waste” — that’s any underused, oversized, inactive, oversized, or unassigned licenses you’ve been paying for. 

In this blog, I’ll offer some pro tips on how to make sure your Microsoft 365 licenses are actually giving you the ROI you’re paying for. But first, I think it’s helpful to understand how big of a problem license waste truly is. 

Just How Underutilized Is Microsoft 365? 

Microsoft 365 is an extraordinarily powerful platform, and there are many reasons it remains such a popular cloud computing tool. However, subscription management has proven to be a challenge for many businesses. 

And if you’re thinking this is just a small business issue, it’s not. 

Here are a few recent stats: 

• 56% of enterprise licenses are either inactive, underutilized, oversized, or unassigned
• The typical business could cut Microsoft 365 costs by 14% by eliminating or reassigning inactive licenses

Considering the fact that the average organization spends $144 on Microsoft 365 per user annually, let’s do some math. 

If we believe the stats — that organizations are overspending by 14% — that means a typical organization with 100 employees is wasting $2,016 every year. It gets worse. For an enterprise-scale organization of 1,000 employees that is overspending by 56%, we’re looking at numbers closer to $80,640 of waste.

If you could save thousands of dollars in a few clicks, and do it in a way that your employees wouldn’t even notice, you’d do it, right? Great! In this next section, I’ll explain how to do just that.  

Optimizing Microsoft 365 

Here are the areas where I see organizations often spending more than they need to, and how to get more out of the licenses you have. 

Licensing

Ideally, you should review your Microsoft 365 licenses at least quarterly to make sure they’re aligned with your current business needs and identify any potential savings. 

Network performance

Identify Microsoft 365 network traffic as trusted traffic and allow it to bypass proxies and packet inspection devices. You can also allow local branch egress of Microsoft 365 network traffic to the internet.

Add-Ins

Review the add-ins used in your environment and remove any that are no longer needed. While you’re at it, make sure you're using the most recent version of each.

User profiles

Determine the baseline set of features that all of your users actually need. Then, identify which users will need additional features. 

If you’re curious about the features that are currently going unused, Microsoft has built-in reporting tools in the reports dashboard. 

Here’s how to get there: 

1. In the admin center, go to Reports
2. Click on the Usage page
3. Select View More from the At-a-Glance activity card for each app

Productivity

Quite a few organizations end up purchasing additional tools for collaboration that essentially serve the same purpose as an app that’s already included with their Microsoft license. 

SharePoint is an excellent document management tool, and if you’re already purchasing Microsoft 365, you should at least consider using OneDrive for secure file storage and sharing. Microsoft Teams is also an incredibly robust collaboration tool. Having a separate instant messaging tool like Slack is unnecessary, and generally speaking, having too many online tools can make the onboarding process more complicated than it needs to be for IT staff and new employees alike.

Automation

If you’re hoping to add automation to your organization, Microsoft has an app for that! If you haven’t played around with Power Automate yet, try it before you consider purchasing an additional tool. 

Power Automate can help you: 

• Create automated flows — no coding required 
• Automate repetitive tasks across multiple apps
• Reduce manual errors and increase productivity

Power Automate also has pre-built templates for common business processes to make it easy to get started. 

Delivery Optimization

If you haven’t yet updated your network for the cloud, adding a significant amount of cloud computing tools at once can overwhelm your network. But before you add yet another big-ticket item to your budget, Microsoft has a built-in tool that might help.  

You can use Delivery Optimization to set maximum download bandwidths, limit background download bandwidth, and more.

Training

One of the biggest reasons Microsoft licenses are underutilized? A lack of training. That’s not unique to Microsoft 365. In fact, less than 1 in 10 businesses have properly trained their staff on how to use the new cloud tools they adopted after the pandemic. 

Proper training takes time. But if you find during your Microsoft 365 optimization process that your tools are right-sized and aligned with your goals, but your employees are still not using your tech stack to its potential, it might be worth it going forward. You might also try working with a Microsoft expert who specializes in providing a simplified end-user experience. 

Additional Help Optimizing and Securing Microsoft 365

At Marco, we offer our clients an easier way to manage their Microsoft subscriptions, and the process starts with a free Microsoft assessment — no strings attached. 

However, if you already know you need help securing your Microsoft environment and optimizing your tech stack, but you don’t need fully managed IT, we’ve developed a right-sized IT solution called ACE365. It’s a great fit for small to mid-sized businesses that rely on Microsoft 365 for the bulk of their critical workflows. Click the link to see if it might make sense for your organization.