New Podcast Episode: How to Use AI to Future-Proof Your Business with Ed Morrissey Watch or Listen Now

April 1, 2024

Best Practices for Microsoft Licensing: Getting the Licenses You Need with Improved Cost-Savings

Before renewing your Microsoft 365 Business or Enterprise license, take the time to consider how your business needs may change over the course of the year and the technology solutions that can be implemented to mitigate the previous year’s pain points. Evaluate your plans for the upcoming year: do you expect your organization to grow, or are you expecting to make staffing cuts? These considerations can guide you in selecting the best M365 license for your organization. 

Key Takeaways:

  • Three levels of Microsoft licensing allow you to pay for either an annual subscription by year or month or a month-to-month option for 20% more
  • Mix annual licensing subscriptions with month-to-month subscriptions to prevent a costly build-up of unused licenses
  • Month-to-month subscriptions allow your business to test specific features for a limited period without committing for an entire year
  • The size of your user list can add time to your plan upgrade, as can other factors
  • Microsoft offers plans with and without Microsoft Teams to offer more flexibility in their pricing and service lines
  • Cloud migrations can go more smoothly if you ensure any third-party applications your business uses can integrate with Microsoft products

Microsoft 365 Business or Enterprise licenses must be renewed annually, but numerous variables should be considered before blindly renewing the same license you used the year before. The key to licensing the correct Microsoft bundle comes down to several factors: the number of licenses needed, the services you want and the pain points you want solved.

Depending on the stage your business is in—growing, shrinking, or staying the course—your company’s technological needs may vary wildly. Performing a self-assessment beforehand guides you, ensuring your Microsoft bundle includes sufficient licenses, the specific services you require and is tailored to address your business’s unique pain points. 

Determining Your Number of Microsoft Licenses

The first and most crucial step is to assess the number of licenses you’ll need to cover your workforce. Consider not only your current number of employees but also whether you expect to grow over the year and the type of workers you employ., i.e. contractors or temporary workers. Microsoft offers three licensing subscriptions to choose from:

  • An annual subscription paid annually
  • An annual subscription paid monthly
  • A month-to-month subscription 

Adding additional licenses to a subscription is possible at every level, but you can’t remove purchased licenses from an annual subscription. If you typically employ a workforce with a high turnover, buying licenses in bulk on an annual basis may not be the most cost-effective approach since it may leave you locked into an annual subscription without the ability to shed those extra licenses. A month-to-month subscription offers more flexibility, but that subscription plan costs 20% more.

To increase your fluidity, you can purchase a set amount of annual licenses, that you’re sure will cover your core team, at a lower annual cost. You can then purchase enough month-to-month licenses to cover employees that can be canceled. This is especially useful for businesses that expect to shrink their workforce or often work with temporary employees. If you’re renewing an existing Microsoft license plan, make sure you consider the number of employees you’ll add and shed throughout the year as well when making your decision. 

Assessing Your Microsoft Service Needs

Your pain points should help guide your plan selection. Easier collaboration and increased cybersecurity are at the core of many Microsoft products, but not every plan is equal or addresses the needs your business may have. Microsoft 365 plans for business can come with or without Microsoft Teams for a variety of price points based on what other apps and cloud services you want included in your plan. Adding a remote phone system like Teams allows your team to keep in close contact through audio calls, instant messages and video calls if your business is ready to transition away from a traditional phone system. If your current system works well for you, make sure to select a plan without Teams for more cost savings. You can also use a month-to-month subscription plan to test out features like Teams without committing to it for a year. Should your business prefer your landline over Teams, you can simply cancel the license once your current month is up.

A goal for many businesses amid an increase in the number and severity of hacks and data breaches, including the recently announced AT&T breach, is to improve and update cybersecurity processes and protocols. The Microsoft 365 Business Premium subscription offers advanced identity and access management, protection against viruses and phishing attacks, device and endpoint protection and allows you to classify sensitive information in order to better protect it. 

Your cybersecurity insurance may also impact the type of licensing you may want or need for your business. You should also review your industry-specific regulations to determine the types of licenses your business will need to remain in compliance.

Considering Cloud Migration? Integration is Key

Migrating to the cloud can help increase flexibility, scalability and accessibility, particularly for remote or hybrid workers. Many Microsoft applications, such as Microsoft Intune, Azure and Defender for Business can integrate with numerous third-party applications, but not always. Successful migration requires careful planning and execution to ensure a seamless transition without disruptions to daily operations. By assessing your current infrastructure, identifying any potential integration issues and creating a comprehensive migration plan, you can smoothly transition to the cloud while maximizing the benefits of Microsoft’s cloud-based services.

Complete our calculator below to find out which Microsoft licensing plan is right for you.

Anders Technology guides businesses through Microsoft plan licensing to ensure you have access to the services that align with your goals. Learn more about how our advisors can manage your licensing and renewal needs, and the associated costs, by requesting a meeting below. 

All Insights

Keep up with Anders

Want to keep up with all the latest insights from Anders? Subscribe and receive the information that matters to you.