u/Huge-Shower1795

Long story short, I had a client say, "We have more M365 licensed users than employees. Please help us find them."

It took me about a week to find all the waste (first time always takes forever). Now I've run the same steps for a dozen other clients (takes less than an hour now). On average, I've been able to save clients 22% of their budget.

Thought I'd share exactly how I do it.

There are 5 areas of waste in Microsoft 365:

1. Remove licenses from disabled users.
2. Remove licenses from inactive users.
3. Downgrade licenses on over-licensed users.
4. Stop paying for unassigned licenses.
5. Redefine the license terms.

NOTE: I have the steps using the admin center, PowerShell, and a third-party app, but it's too long to re-post in Reddit. Go to Microsoft 365 License Audit to see all the steps.

Find Disabled Users

1. Log in to the Microsoft 365 admin center.
2. Users > Active Users > Export > Continue.
3. Open the spreadsheet.
4. In the Home Ribbon, click Sort & Filter > Filter
5. Click the dropdown in the Licensed column > uncheck Unlicensed > click OK
6. Click the dropdown in the Block credential column > uncheck FALSE > click OK.

Find Inactive Users

NOTE: You need to either have a Microsoft Entra P1 license or use a third-party app to get this data.

1. Open Microsoft Entra Admin Center
2. Users > Manage view > Edit columns.
3. Remove, replace, or add so the only columns you can see are: Display name, User principal name, User type, Identities, Assign licenses, and Last interactive sign-in time. Click Save.
4. Click Download users > Start bulk operation
5. Wait for the success pop-up message to appear, then click the notification bell at the top of the page. Under the notifications menu, click Success!, and then select the [report name].
6. Open the downloaded spreadsheet.
7. Click Sort & Filter > Filter to enable the column filters.
8. Click the drop-down in the assignedLicenses column. Uncheck any empty options, i.e., []. Click OK.
9. Click the drop-down in the signInActivity column. Click Sort A to Z.
10. Any users who have an empty signInActivity or a sign-in that was over 30 days ago can be safely disabled, and the license removed after the data is properly secured.

Find Downgradable Users

1. Review the report located on the website, then click Export.
2. Open the CSV in Excel.
3. Next, download the Microsoft 365 apps spreadsheet by going back to Reports > Usage and clicking View More located under “Active users - Microsoft 365 Apps”
4. Review the report and click Export.
5. You can start by deleting everyone that you’ve already determined hasn’t logged on or is currently disabled.
6. Add the filter by clicking Sort & Filter in the home ribbon > Filter.
7. Add a column for Current Licenses.
8. Copy the licenses from the How To Use The Admin Center To Find Inactive Users spreadsheet you downloaded earlier into the new column. Be sure to align the user names in both spreadsheets.
9. Add a column for Microsoft 365 Apps.
10. Copy the Last Activity Date column from the Pro Plus Usage report you downloaded above in step 7 into the Office 365 app usage spreadsheet you’ve been using. Be sure to align the new data with the appropriate users in the Office 365 app usage report.
11. For each of the following columns, click the drop-down next to the column name and filter out any logins that have happened in the last month.
12. OneDrive Last Activity Date
13. SharePoint Last Activity Date
14. Skype For Business Last Activity Date
15. Yammer Last Activity Date
16. Team’s Last Activity Date
17. Microsoft 365 Apps
18. The users who have not been filtered out are excellent candidates for Exchange Online-only licenses. You may want to double-check their usage of other apps before making any license changes on their accounts.

Find Unassigned Licenses

1. Open the Microsoft 365 admin center.
2. Click Show All > Billing > Licenses.
3. On that webpage, you’ll see a list of all your licenses in your organization, along with a column labeled “Available Licenses”.
4. Any number above 0 in the Available Licenses column is typically safe to remove from your organization with two caveats. Some licenses aren’t assigned to users through the Microsoft 365 admin center.

NOTE: Some licenses are consumed as they are used. For example, additional storage licenses for SharePoint Online may show as available, but removing them will decrease the amount of free space available in SharePoint Online and possibly cause a disruption to SharePoint Online usage.

Redefine The License Terms

Microsoft adjusted its pricing model, charging different rates for the same license based on commitment terms, billing frequency, or sector-specific eligibility.

• The subscription length
• Billing Frequency

1. Go to the Microsoft 365 admin center
2. Click Billing > Licenses > Select the license you want to review.
3. Click ellipsis (…) next to the subscription > Manage subscription settings.
4. You can view the billing settings right on this page.