Are you paying for Microsoft 365 licences you don't need?

Microsoft 365 is usually one of the biggest software costs for a growing business, and one of the least reviewed. Licences get bought in a hurry when someone joins, nobody removes them when someone leaves, and the plan chosen three years ago rarely matches how the team works today.

The result tends to go one of two ways: paying for features nobody uses, or saving money on licences that leave the business exposed to security risks. Here's how to find the right balance.

The three business plans in plain English

Microsoft's business plans (for organisations up to 300 users) build on each other:

• Business Basic: email, Teams, SharePoint and OneDrive, with the web and mobile versions of Word, Excel and PowerPoint. No desktop Office apps.
• Business Standard: everything in Basic, plus the full desktop apps.
• Business Premium: everything in Standard, plus the security and device-management tools most small businesses actually need: Intune (manage and wipe laptops and phones), Defender for Business (endpoint protection), Conditional Access and advanced email protection.

Licences can be mixed. Not everyone needs the same plan.

Step 1: Remove licences nobody is using

In the Microsoft 365 admin centre, go to Billing › Licences and compare assigned licences with your current staff list. Look for:

• leavers who still have a licence assigned
• shared mailboxes using a paid licence (shared mailboxes under 50 GB don't need one)
• unassigned licences you're still paying for

This is the quickest saving, and it's often the biggest.

Step 2: Match plans to roles

Ask a simple question about each role: does this person need the desktop apps, and do they handle sensitive data or company devices?

• Front-line or occasional users who mainly use email and Teams on a phone or browser may be fine on Basic.
• Office-based staff who live in Excel and Word usually need Standard or Premium.
• Anyone with access to customer data, finance systems or admin rights should have Premium-level security protecting their account and device.

Step 3: Don't save money on security

Business Premium costs more than Standard, but it includes protections that would otherwise mean buying separate tools: device management, endpoint protection and access policies that stop a stolen password turning into a breach. For most SMEs, Premium for staff with sensitive access is cheaper than the alternatives, and far cheaper than an incident.

Step 4: Check your commitment terms

Microsoft offers monthly and annual commitments, with different pricing and different flexibility. Annual terms can cost less but are harder to reduce mid-term. If your headcount changes often, a mix can work: annual for core staff, monthly for seasonal or contract roles.

Step 5: Decide about Copilot deliberately

Microsoft 365 Copilot is a paid add-on. It can save real time on drafting, summarising meetings and analysing spreadsheets, but only if people are trained and your file permissions are tidy (Copilot can surface anything a user has access to). Start with a small pilot group, measure the impact, then decide.

Step 6: Review it every quarter

Set a recurring reminder to review licences against your staff list, especially after leavers, role changes and the end of a contract term.

Need help?

Our Microsoft 365 & Copilot team can review your tenant, recommend the right licence mix, tighten security and handle the changes for you, with one UK point of contact for licences, billing and support.