We didn't want to leave you out of the loop if you missed our recent webinar, Microsoft 365 License Management: How to Optimize in a New Era of Changes. Don't worry; we have you covered with a quick recap of the highlights.
In this session, ENow CEO Jay Gundotra sat down with Ben Marshall, Global Head of Licensing at HP Inc., to explore the factors affecting Microsoft 365 licensing today. They discussed everything from significant macro trends to strategic advice on optimizing licenses to match organization and user needs, along with the impact of Microsoft's latest changes.
Jay and Ben began by discussing key macro factors influencing licensing decisions. Shrinking IT budgets, the lingering impacts of the pandemic, the evolution of security, and the proliferation of overlapping technologies all play a crucial role in the landscape today.
Ben shared how CEOs frequently ask him how to reduce IT budgets. He pointed out that, since the pandemic, many companies have adopted hybrid work models, which demand more flexible licensing strategies. He also mentioned that some businesses tend to over-purchase licenses to avoid potential shortfalls. Jay added that Microsoft's initial push to move everyone to the cloud involved competitive pricing, but as demand increased and the product matured, a natural rise in prices followed.
The conversation shifted to some of the recent changes coming from Microsoft. Ben highlighted a notable development involving a monopoly lawsuit from Slack in the European Economic Area (EEA), which led to Microsoft removing Teams from its core licensing bundle SKUs like E3, ME3, and OE3. This move forced IT departments to rethink their budget allocations, especially with decisions around deploying new offerings like Teams Premium and Copilot.
Another significant shift is the replacement of Microsoft's traditional Enterprise Agreements (EA) with the Microsoft Commerce Agreement (MCA). Ben went on to explain that LSP roles (license service providers) have been decreasing, leaving companies with fewer support options unless they switch to a partner licensing provider. Furthermore, it's unclear if the Microsoft Commerce agreement has the same volume discount structure as previous EA agreements, further complicating the purchasing landscape.
After covering these changes, they switched gears to discuss recommendations for developing an effective strategy for Microsoft 365 Licensing. The first step, Ben advised, is understanding what your end users are doing. Often, companies hold onto licenses that aren't being used, resulting in a wasted investment. He also recommended using tools like maps365.com to understand the components of each license.
By mapping out products to organizational needs, you can create personas based on real usage data and streamline license allocation. Tools like ENow's Microsoft 365 License Optimization help do just that. Jay emphasized that creating user personas can help tailor licenses to specific employee roles and reduce unnecessary spending. For example, organizations can assign lower-tier licenses to frontline workers or employees in specific departments. Creating personas based on data on the actual end-user habits can also help streamline onboarding processes.
To solve the challenges with Microsoft 365 licensing (unassigned licenses, over-purchasing, under-utilization, failing to map out business/functional needs, and project-based purchasing), Jay said starting with a framework is key. That's when they shared the '6 Steps to Effective License Optimization.'
Step One is all about reviewing your license landscape and taking inventory of how many licenses exist and their costs. Then, you must evaluate the license and identify what each user needs. Third, being able to regularly monitor your license, like knowing when they expire or need renewing, is important. Next, organizations should be educating their users on how to use the technology to maximize their investments. With all this information in hand, you can right-size license purchasing to ensure you're optimizing your licenses and budget. Lastly, it's important to adapt to the procurement model and understand the motivations of the procurement team as they could be different from the IT department. Ben stressed knowing how to purchase cloud software is pivotal to getting exactly what you need.
When it comes to the steps, Jay showed the audience how ENow's Microsoft 365 License & Optimization tool can help with the review and evaluation process. He pulled up ENow's Licensed Users Report, which is designed to show organizations their effective licensed position. It shows the different types of licenses a user has and the costs associated with that license. You can also group the license types to see all the users associated with that license.
Jay also mentioned the License Cost report, which is designed to show how much each license costs. It shows what's been assigned, unallocated, and what's inactive. Recently, an additional report was added to include third-party, non-Microsoft software licenses. This product update was the result of ENow's co-innovation with a Client who wanted to see what each user was costing the organization with all the different software systems they had in place. In other words, the License Cost report measures IT cost per employee.
Jay went on to outline how ENow helps with steps three through six. He showed the monitoring tool that manages and monitors Subscriptions & Licenses for Microsoft 365. You can see the different add-on licenses and what's being used, and it can also alert IT departments before the license runs out.
Licensing Optimization and Adoption go together. There may be additional opportunities to improve a user's experience and productivity through the adoption of new workloads and features once you right-size their license for what they need. Like licensing or anything else, to improve something, you need to first measure and understand where you are today. Jay introduced True Adoption, which is an adoption score built by ENow that uses custom user personas and KPIs to measure what 'good adoption' means for your organization.
Q: Do you have any strategies to gauge which products are likely to stick around and not be deprecated? (in reference to Microsoft's general product/feature changes)
A: When Microsoft deprecates a workload or feature, it typically doesn't remove the functionality altogether; we just have to track where it's being moved. When you get to this situation where a product you've adopted is going away, I'd recommend reaching out to your License Provider or ENow. We'll be able to help you find where that functionality is going and then show you how to use it in the new system.
Q: Does ENow's email licensing optimization work in GCC tenants?
A: ENow's License Optimization does support GCC. Each environment has different requirements, and we have Clients across the spectrum, so contact us to walk through your requirements.
Q: With ENow's Microsoft 365 License Management tool, how much in typical savings do you tend to find, and how long does it take to set up?
A: On average, it's around 10%, but it really depends on how effective your existing licensing strategy has been. I've seen millions of dollars of savings, as Ben mentioned in his examples. It really varies. As far as the setup of the Microsoft 365 License Optimization tool is concerned, you must enter your current license cost, as there's no way for us to do that for you. Once you enter it in, data will appear. There are also some rules you might want to add in terms of security features and what you want to keep. We'll talk you through all of that; in general, it's a very quick setup.
Q: What's the difference between ENow's Adoption and License Optimization tool versus Microsoft's built-in tools?
A: Microsoft's not going to provide a toolset that tells you that you shouldn't be paying for this. They've got the Adoption Center that kind of dabbled in this, and if you're a provider, you might have heard of Lighthouse, which is a multi-tenant management tool, but it's still limited when you look at it from an IT department perspective. The tools are there to do the bare minimum, to do what they need to do to manage and get the licenses into the hands of the end users, which again is priority one. However, it's not there to dig in and understand how much you are getting out of your investment.
Ben ended the session with his top takeaways by first saying, "Always be smarter than what you're dealing with." In other words, make sure you fully understand the licensing landscape, Microsoft changes, macro impacts, and micro situations, including what your users are doing and what they need to be productive. The key takeaways are: