Smarter Microsoft 365 spend starts here: Your guide to drive business value

Microsoft kicked off 2025 with a 16% revenue surge in Q1 alone. A major driver behind that growth? Microsoft 365.

Once a simple productivity suite, Microsoft 365 (M365) has evolved into a full-scale, cloud-powered, strategic platform millions use worldwide. While Office 365 (O365) remains focused on core collaboration apps like Word, Excel, and Outlook, Microsoft 365 layers in an assortment of comprehensive services like device and identity management, advanced cybersecurity, and AI-powered tools.

Organizations continue to embrace these tools to boost collaboration, productivity, and security — but they also face the challenges of navigating licensing complexities and controlling costs.

Understanding the hidden costs of Microsoft 365

Even the most tech-savvy organizations sometimes struggle to track their Microsoft licenses. When IT teams are in the thick of it, they may see applications go untouched, users get over-assigned, and new features roll out faster than they can keep up with. Staying current and cost-efficient is no easy task.

With so many licensing options — ranging from all-in-one SKUs like M365 E3/E5 to customizable, à la carte bundles — it’s easy to lose sight of what the best choice is for your organization. Without a clear understanding of entitlements and utilization, organizations often miss out on powerful tools they already have access to while overspending on products they may not need.

That’s why it’s critical to stay current on the feature sets included within each component of M365, define a deployment roadmap, and focus on optimizing costs.

A smarter path forward: Steps to optimize your M365 environment

To unlock the value of Microsoft 365, organizations should begin by asking themselves three essential questions: What do we have? How are we using it? Where do we want to go?

Assess your current state — What do we have?

Before you optimize your licensing position, it’s important to get a clear picture of what your current licenses offer — and what’s changed since they were first assigned. That means closely examining your licensing setup to identify what’s already been deployed (and what hasn’t) across both your Microsoft and non-Microsoft environments.

This step can uncover surprising inefficiencies, such as assigned licenses that were never activated, tools deployed but never adopted, and licenses that overlap with third-party applications that offer similar functionalities.

Understand real usage — How are we using it?

Just because you own a license doesn’t mean it’s being used or delivering value. Measuring adoption and usage can help your team better understand which M365 features are embraced or underutilized across your organization. By tracking utilization, adoption trends, and user engagement, you’ll get key insights to help you eliminate licenses or features that aren’t providing value.

This step can uncover areas to cut wasteful spending by reharvesting licenses back into your tenant or downgrading them to a lower-level product suite that better fits the needs of each respective user.

Define future needs — Where do you want to go?

Cost optimization isn’t just about trimming excess — it’s about investing in the tools and licenses that power your business now and in the future. As you map out upcoming initiatives, consider how newer technologies, workforce shifts, and platform integrations may affect your teams’ needs.

To stay ahead, it’s important to understand the distinct requirements of your user groups and establish a clear one-to-five-year deployment roadmap. This approach lets you match the right licensing mix to each profile, identify what’s already being used, and anticipate future demands.

When you align your Microsoft 365 strategy with broader business goals, you build a tech ecosystem that’s flexible and tailored for growth.

Rightsize your licensing model

After evaluating your current landscape and future needs, it’s time to rightsize. This involves reassigning unused licenses, upgrading or downgrading licenses based on projected needs, evaluating alternative licensing bundles and buying programs, and consolidating agreements.

Rightsizing is about ensuring your spend matches exactly what you need today, and what you plan to use in the next one to five years.

Establish financial governance

Now that you’ve optimized your M365 environment, the final step is ensuring your investment stays on track. This starts with identifying who’s responsible for tracking Microsoft spend. From there, it’s all about putting the right processes in place to monitor, adapt, and refine how you invest.

Your organization can avoid unexpected overages by reviewing licensing usage regularly and setting clear team budgets. This cultivates a data-driven approach to making IT investment decisions.

Take control of your Microsoft investment with SHI

If you’ve struggled with the licensing complexities of Microsoft 365, you’re not alone. It’s time to take back control.

SHI’s Microsoft experts work with your organization to determine opportunities to upgrade, downgrade, or rightsize your licenses, ensuring every dollar spent supports productivity, security, and growth.

Here’s how we make it happen:

• Leverage SHI’s Optimized License Position (OLP) service: Our software asset management (SAM) team delivers a single, reliable view of entitlements and software deployments to identify risks and areas of exposure. This allows you to optimize your licenses better and mitigate compliance risks.
• Utilize SHI’s Microsoft and Software Advisory Group (MSAG): MSAG guides organizations in getting the most value from their Microsoft licensing spend. This includes analyzing usage, negotiating solutions, and aligning licenses with organizational priorities.
• Measure usage and adoption with SHI’s 365 Insights tool: Our tool uncovers underutilized features, measures usage and adoption, and highlights areas where training is needed. It also supports continuous platform adoptions.
• Implement SHI’s FinOps framework: FinOps helps organizations better leverage their cloud financial management to realize peak value from cloud spending and create a culture of accountability. It allows organizations to control cloud spending, forecast budgetary needs, and increase value based on key performance indicators (KPIs).

Let’s make your Microsoft investment work smarter. Contact us today to get started.