On a call recently, our client joked that you “practically need a PhD in Licensing these days” to figure out which Microsoft 365 and Office 365 licenses your company needs. If that’s not a perfect premise for a meme and blog post, we’re not sure what is.

We’re proud to have achieved a Solutions Partner for Modern Work designation, which is basically a ‘PhD’ in Microsoft 365, and we are happy to share some of the questions we use to walk our clients through the licensing process. Whether you are just starting with Microsoft 365 or wanting to re-evaluate your existing licenses for opportunities to save money or add new features, these should help.

What if we are a smaller organization, is Office 365 worth the cost?

If your organization is under 300 users, you can qualify for SMB licensing for e.g., Microsoft 365 Business Basic/Standard/Premium or Microsoft 365 Apps for Business. These business plans come with an affordable cost and world class features like the web/mobile/desktop versions of Microsoft 365 apps, 1 TB of cloud storage per user, standard/advanced security and much more for less!

What are the key features we should consider when evaluating the Microsoft 365 licensing options?

There are many features available in Microsoft 365, but it is essential to consider five key features to determine the best licensing option for your business:

1. Capacity/Number of users

2. Amount of storage per user

3. Microsoft 365 apps version (web/mobile/desktop)

4. Standard or Advanced security

5. Phone capabilities

Here is a comparison of all the features available for Enterprise and Small and Medium-sized Businesses (SMB):

Should we procure from Microsoft directly or go through a reseller?

If you're buying from Microsoft directly, you will be paying the list price. However, you can get immediate cost savings and dedicated support by procuring through a Microsoft Cloud Solution Provider (CSP) such as Opkalla.

If I don’t need all of the Microsoft 365 services and applications, can I buy individual licenses?

Yes, you can buy individual licenses. Add-ons and features like Teams Audio Conferencing (free add-on with an Office 365 or Microsoft 365 subscription), Defender for Business (standalone or included with Business Premium), Intune Suite (standalone or add-on to Intune Plan 1 and 2), etc. can be licensed individually. Organizations do not need to buy the comprehensive E5 licenses to get all the applications and features they need.

Do I need to call Microsoft or my CSP every time I need to make a change once I decide on a license?

No, if you purchase directly from Microsoft, you can use the Microsoft 365 admin center to manage your licenses. However, if you purchase licenses through a CSP like Opkalla, you will have a self-service portal and we will train your team on how to navigate the portal, as well as help you to make any changes.

Am I stuck in a long-term contract?

No, if your organization purchases Microsoft 365 through a CSP you have the option of licensing via month-to-month contracts through the New Commerce Experience (NCE). If you value flexibility, this is a good option.

However, it is worth noting that on March 1, 2022, Microsoft 365 went up in price, but this is not directly related to NCE. Organizations that select a monthly contract are now paying on average +15% (depending on the SKU), while organizations on an annual contract are maintaining legacy (pre-NCE) license rates. Here are some examples of price changes for specific commercial products:

Microsoft 365 Business Basic - from $5 to $6
Microsoft 365 Business Premium - from $20 to $22
Microsoft 365 E3 - from $32 to $36

The main drawback with an annual contract is that the number of licenses purchased is locked in as the minimum for the year (organizations can add more, but not size down). If your organization chooses an alternative option beyond a CSP licensing route (for instance an Enterprise Agreement directly with Microsoft) you will be locked into a three-year contract with the ability to “true-up” at the end of each year.

Is Support included in my Microsoft Licensing Agreement?

If you go through a CSP, they will be your point of contact for billing and subscription management, and technical support. They can submit tickets on your behalf to Microsoft Premier Support at no cost, so you will no longer need to contact Microsoft directly.

Be sure to ask this question to your CSP before signing an agreement. For organizations not in the CSP model and procuring directly through Microsoft, you might find yourself spending a lot to get high-level support. That said, working with a CSP will save you both time and money!

Can I mix and match the Microsoft licensing types?

Yes, organizations can mix and match licensing needs based on their user requirements. For instance, a manufacturing facility might only need basic licensing for their floor workers (F1/E1) while one of their corporate users might require E3/E5. Similarly, an organization might be comfortable locking in a cheaper annual NCE license for some devices but need more flexible options for others. A big advantage of the CSP model is the ability to lean on them to determine the most cost-effective licenses for each user.

What happens if a user leaves the organization? Do I have to keep paying for their license?

Not necessarily. Going back to the NCE, the quantity is flexible on a month-to-month contract so you can reduce the licenses within 7 days of the renewal date. However, if you have an annual contract, you’ve locked in a minimum number of licenses so you can’t drop below this number, even if your team downsizes until your contract is up.

What other questions do you have about Microsoft 365 licensing options for your business? We’re happy to help you navigate your options and explore procurement as your trusted advisor and CSP - contact us today.

9 Questions to Help You Navigate 2023 Microsoft 365 Licensing