How I cut our Microsoft 365 bill by 30% without removing a single feature from any use
If you manage Microsoft 365 for a company, there’s a good chance you’re paying for licences nobody’s actually using anymore.
I keep seeing the same pattern:
Someone leaves.
Someone changes role.
A mailbox gets converted.
A project ends.
But the licence count somehow never goes down.
A quick audit can uncover a surprising amount of wasted spend, and honestly, most admins are too busy firefighting to notice it.
Here are 5 things worth checking:
- Inactive users Go to: Microsoft 365 Admin Centre → Reports → Usage → Microsoft 365 Active Users
Set it to 90 days.
If someone has barely touched Exchange, Teams, SharePoint or OneDrive in months, flag the account for review. Don’t instantly remove anything, just investigate.
- Unassigned licences Billing → Licences
This one’s simple but overlooked all the time.
If you’re paying for licences that aren’t assigned to anyone, you’re literally burning money every month.
- Users with the wrong licence tier This is usually where the biggest savings are.
I’ve seen plenty of reception staff, warehouse teams, temporary workers and part-time users sitting on full E3/E5 licences when they only need basic email + Teams access.
In many cases, an F1/F3 licence would do the job perfectly.
That difference adds up fast across an organisation.
- Shared mailboxes Shared mailboxes under 50GB generally don’t need a licence.
Yet I still regularly find full licences assigned to them.
Easy savings.
- Old guest accounts Azure AD → Users → Filter: Guest
You’ll probably find old vendors, contractors or external collaborators from projects that ended years ago.
Cleaning these up helps with both security and licence hygiene.
Quick example:
10 users on E3 licences in the UK can easily cost around £28/user/month.
If those users only need F1 licences at around £2.70/month, that’s over £3k saved annually from one small review.
Also worth checking:
Microsoft’s built-in Licence Optimisation recommendations in the Admin Centre. It’s not perfect, but it does catch a lot.
This isn’t some massive week-long project either.
You can start spotting waste in under 10 minutes.
And when budgets are tight, being the person who quietly saves the company thousands gets noticed.