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How Can I Find Out If I’m Paying for Microsoft 365 Licenses We Don’t Use?
Paying for things you do not use costs your business money. Many companies have Microsoft 365 licenses that are assigned to employees but are not being used, which can become a hidden expense. Finding these unused licenses is a straightforward way to manage your budget better and improve security.
This issue is common in businesses of all sizes. An employee might leave the company, or a role might change, leaving a fully paid license sitting idle. While one unused license might not seem like a big deal, the costs multiply quickly across many users. For a large organization, this can add up to a substantial amount of wasted funds over a year. It is like having subscriptions for services no one is using anymore. Addressing this is a simple step toward financial efficiency.
Why Unused Licenses Are a Problem
The most obvious problem with unused licenses is the financial waste. Each license represents a monthly or annual cost. When they go unused, you are essentially giving money away for nothing in return. Cutting these unnecessary costs frees up your budget for other important business needs.
Beyond the cost, there is a security aspect to consider. An account that is not being used, especially one for a former employee, can be a security risk. If the account is not properly secured or deactivated, it could become a target for unauthorized access. These forgotten accounts are like back doors left open. By regularly identifying and managing unused licenses, you also close potential security gaps, protecting your company’s data. Proper license management is a key part of good digital housekeeping.
Methods to Find Unused Licenses
You have a few ways to identify which Microsoft 365 licenses are not being used. Some methods are built right into Microsoft’s tools, while others use simple automation to get the job done faster.
Microsoft 365 Admin Center
This is the primary control panel for your company’s Microsoft 365 services. It contains usage reports that provide insights into how employees are using the software. You can look at data for specific applications like Outlook, Teams, or OneDrive to see the last time a user was active. This built-in feature allows you to check user activity without needing special technical skills. It provides a clear picture of who is using what they have been assigned.
PowerShell Scripts
For a more automated approach, you can use a tool called PowerShell. PowerShell lets you run commands to manage your Microsoft environment. People have created helpful scripts that automatically check for inactivity. These scripts can quickly scan all your users and create a list based on specific rules you set. For example, a script can find all users who have not logged in for over 90 days. It can also identify accounts that are disabled but still have a costly license assigned to them. Another thing these scripts can do is flag accounts that were created but have never been used at all. This method is very efficient for larger organizations where checking each user manually would be too time-consuming.
What to Do with Unused Licenses
Once you have a list of unused licenses, the next step is to take action. You have several options, depending on the situation.
If the license belongs to a user who is still with the company but does not need that specific software, you can reassign it. You can give the license to a new employee or someone else who needs it. This ensures you are getting value from what you pay for.
If a license is assigned to a former employee or a test account that is no longer needed, you should unassign the license and deactivate the account. Unassigning the license stops the billing for it, providing immediate cost savings. Deactivating the account ensures it cannot be accessed, which is a critical security step. Creating a regular process, perhaps quarterly, to review licenses ensures your company stays efficient and secure over the long term.