Microsoft 365 Licensing Best Practices for SMBs:
- Assess Needs: Choose licenses based on user roles.
- Avoid Over-Subscription: Only purchase needed licenses and adjust over time.
- Use Microsoft CSP: Get support from a Cloud Solution Provider.
- Leverage Free Tools: Use included tools like Teams and OneDrive effectively.
- Annual Review: Audit licenses to align with business growth.
Small and medium-sized businesses (SMBs) often face challenges when navigating the complexities of Microsoft 365 licensing.
With various plans and options, choosing the right license to maximize value and productivity while controlling costs can be daunting.
This article will explore best practices for SMBs to maximize Microsoft 365 licensing, offering valuable insights that align with your business’s evolving needs.
Explore Your Business Needs Before Choosing a Microsoft 365 License
Before selecting a Microsoft 365 license, it’s essential to thoroughly assess your organization’s unique requirements.
Identifying specific business needs helps ensure you choose a plan that meets your needs without unnecessary spending.
Consider factors like:
- Number of Employees: Are you a small team of 10, or do you have up to 300 employees? The size of your team will directly impact which Microsoft 365 subscription is the most suitable.
- Productivity Requirements: Do your employees need access to Office applications like Word, Excel, and PowerPoint, or are you primarily interested in cloud services like OneDrive and Microsoft Teams?
- Collaboration Needs: How does your team communicate—do they rely heavily on video calls, document sharing, or instant messaging?
For example, a company with a small remote workforce may benefit from Microsoft 365 Business Standard, which includes collaboration tools like Teams and SharePoint. At the same time, a more security-focused organization might prefer Microsoft 365 Business Premium due to its advanced security features.
Maximize Cost Efficiency by Avoiding Under- or Over-Licensing
Licensing costs can quickly add up if you’re not careful. Many SMBs either over-license by purchasing more features than needed or under-license by opting for a cheaper plan that lacks critical capabilities.
- Over-Licensing Example: If you purchase Microsoft 365 Business Premium but don’t need advanced security features like Intune or Azure Information Protection, you may be paying more than necessary.
- Under-Licensing Example: Microsoft 365 Business Basic may save you money initially. However, if your employees need desktop versions of Office apps, this decision may lead to productivity setbacks and additional future costs.
Best Practice: Regularly assess your users’ needs and track usage through the Microsoft 365 Admin Center to understand what features are utilized and adjust licenses accordingly.
Leverage the Microsoft 365 Admin Center for Better License Management
The Microsoft 365 Admin Center is a powerful tool that helps businesses manage licenses effectively. By using the Admin Center, you can:
- Assign Licenses: Assign licenses based on individual employee roles and responsibilities.
- Monitor Usage: Track how often your employees use various Microsoft 365 services.
- Reassign Licenses: Reallocate licenses when an employee leaves or transitions roles within the company.
Example: If an employee who previously worked on advanced data analysis no longer requires Power BI, you can reassign that specific license to a new team member whose role demands it. This approach helps optimize costs and eliminate waste.
Take Advantage of Bundled Services to Improve Collaboration and Productivity
Microsoft 365 plans offer a wide range of bundled services that, if utilized properly, can significantly improve collaboration and productivity.
Some of these services include:
- Microsoft Teams for chat, calls, and video conferencing
- OneDrive for Business for file storage and sharing
- SharePoint Online for team collaboration and document management
- Exchange Online for business-class email
Instead of purchasing individual services separately, SMBs can save money and improve productivity using the services already included in their chosen Microsoft 365 plan.
Example: An SMB using Microsoft Teams for internal communication and SharePoint for document collaboration can eliminate the need for third-party communication and document management tools, reducing costs and simplifying workflow.
Ensure Compliance with Microsoft’s Licensing Policies
Staying current with Microsoft’s licensing policies is crucial to avoid unexpected costs or compliance issues. Non-compliance can lead to hefty penalties, audits, or disruptions in service.
- Keep Track of License Usage: Regularly review the number of licenses you have purchased versus the number in use.
- Stick to Usage Rights: Make sure your team members understand the limitations of their licenses and how they can use Microsoft 365 applications.
Best Practice: Use the Admin Center to set up alerts and periodic checks to ensure your business complies with Microsoft’s licensing agreements. This way, you can make adjustments before non-compliance becomes an issue.
Optimize Security and Access Controls to Protect Sensitive Data
Many SMBs overlook Microsoft 365’s security features, which can help protect their data and ensure compliance. Properly using these tools can mitigate security risks and prevent unauthorized access to company information.
- Multi-Factor Authentication (MFA): Enforce MFA to add an extra layer of security for accessing company resources.
- Conditional Access Policies: Configure conditional access policies to ensure employees can only access Microsoft 365 apps from approved locations or devices.
- Data Loss Prevention (DLP): Use DLP policies to prevent the inappropriate sharing of sensitive information, such as credit card numbers or customer data.
Example: An SMB in the healthcare sector might use Microsoft 365 Business Premium, which includes DLP and other compliance tools, to ensure they meet industry data protection standards.
Regularly Assess and Adjust Your Licensing as Your Business Grows
As your business evolves, your licensing needs will likely change as well. It is important to conduct periodic assessments of your Microsoft 365 usage and adjust your licenses to match your business’s current requirements.
- Scale Licenses as Needed: If your team grows, add additional licenses and consider if new employees might benefit from a different Microsoft 365 plan.
- Downgrade or Upgrade Plans: You may find that some employees need more advanced capabilities, while others do not require the full feature set they currently have.
Example: A company that starts with a basic Microsoft 365 plan for its initial employees may need to upgrade to Microsoft 365 Business Premium as it expands and requires more robust security features. Conversely, some administrative roles might be downgraded to Microsoft 365 Business Basic if they don’t require advanced apps.
If You Need to Update Your Licensing Strategy
Microsoft 365 licensing can seem complex, but by following these best practices, small and medium-sized businesses can maximize the value they get from their Microsoft 365 investment.
Understanding your business needs, optimizing costs, leveraging bundled services, ensuring compliance, and regularly reassessing your licensing structure are all keys to staying efficient and productive.
Microsoft 365 Licensing Best Practices for SMBs FAQ
What is Microsoft 365 Business Basic?
Microsoft 365 Business Basic provides essential tools like Teams, Exchange, OneDrive, and web-based Office apps.
How can I manage multiple licenses effectively?
Utilize Microsoft’s Admin Center to assign, reassign, or revoke licenses, ensuring each employee has the appropriate tools.
What’s the difference between Business Standard and Business Premium?
Business Standard includes desktop apps, while Business Premium adds advanced security and device management features.
How often should I review my license usage?
Regular reviews, at least every quarter, help you ensure you’re not overpaying for unused licenses.
Can SMBs combine different Microsoft 365 plans?
Yes, businesses can mix and match licenses to fit the specific needs of different employees.
How can I save on Microsoft 365 licensing costs?
Review usage and eliminate unused licenses. Choose annual billing for discounted rates.
Are there any discounts for non-profits using Microsoft 365?
Microsoft offers special discounted plans for non-profit organizations.
Is it necessary to upgrade to Business Premium for security?
Business Premium offers advanced security tools, but SMBs can also use third-party solutions for security.
What happens when a license is unassigned?
Unassigned licenses go back into your pool for reassignment without additional cost.
How can I ensure compliance with Microsoft 365 licensing?
Use the Microsoft Admin Center to track and ensure your licenses meet compliance standards.
Can licenses be reassigned to a new employee?
Yes, unassigned licenses can be easily reassigned to new employees when needed.
How does Microsoft 365 licensing affect remote workers?
Cloud-based licenses allow employees to access tools from any location, supporting flexible work.
What is the best licensing plan for startups?
Depending on app needs and budget, startups should consider Microsoft 365 Business Basic or Standard.
Are volume discounts available for SMBs?
Microsoft offers volume licensing discounts, typically for businesses needing many licenses.
Can I switch plans as my business grows?
Yes, Microsoft allows you to upgrade or downgrade plans as your business evolves, offering flexibility for scaling.
