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How to Work Microsoft Licensing to Beat Your IT Budget

Microsoft Licensing for Office 365 radically changes the way businesses license software and with the right advice, can lead to big savings. This opportunity was created when Microsoft changed its model from licensing machines to licensing users. While licensing software might not seem like the most scintillating of subjects, it pays to be up to speed. There are quite a lot of licensing options and companies can mix and match license types to keep costs under control.

How to Work Microsoft Licensing to Beat Your IT Budget

Microsoft Licensing Options with Office 365

To simplify licensing, Microsoft created a range of pre-packaged plans with different products and services included in each. Thus, IT managers can select an appropriate suite of products depending on the needs of their users.

Plans are available for small business, enterprise, education, government and non-profit and each sector plan has its own pricing.

The two biggest wins with Microsoft’s licensing options for Office 365 are cost control and flexibility. Licenses are attached to users and each user is licensed for up to five devices. Let’s look at licensing options in more detail and explore how mixing and matching license types can help you beat your IT budget.

Office 365 Small Business Microsoft Licensing

small business office 365 licenseThere are three small business plans: Office 365 Business Essentials, Office 365 Business, and Office 365 Business Premium. Small business plans are restricted to 300 users per plan and range in price from £3.80 per user per month to £9.40 per user per month. These prices assume an annual commitment.

The Business Essentials plan includes email and other services but web-only versions of Office applications. Office 365 Business includes Office applications but no email. Business Premium includes both email and Office applications.

Office 365 Enterprise Microsoft Licensing

microsoft licensing for enterpriseThere are four enterprise plans: Enterprise E1, ProPlus, Enterprise E3 and Enterprise E5. Enterprise plans have no user restrictions and range in price from £6 per user per month to £30.80 per user per month. Again, these prices assume an annual commitment.

Enterprise E1 is the entry-level Office license offering the same basic features as Small Business Essentials. ProPlus offers a slightly enhanced version of Small Business, still with no email. E3 offers an enhanced version of the Small Business Premium service with double the email storage (100 GB) and security and compliance tools such as legal hold, data loss prevention and more. Enterprise E5 offers everything in the E3 package, with enhanced security, analytics and voice capabilities.

Microsoft Licensing Options for Other Organisations

Microsoft offers extremely friendly licensing options for education, government and non-profit companies. These are detailed on the Office 365 website.

Why Would I Need Help With Licensing Office 365?

Microsoft’s licensing for Office 365 is simple and easy to manage, but not straightforward to set up. There are seven different licensing packages and they can be mixed and matched to create unique, bespoke licensing solutions. Mixing and matching license types is the key to beating your IT budget, so it pays to have expert assistance.

You can find the full detail on the Office 365 website

How Does Mixing and Matching Work in Practice?

Small Business licenses are lower cost than Enterprise licenses but come with reduced functionality. Because you can deploy 300 users of each Small Business plan before needing to deploy users on an Enterprise plan, a needs analysis is a good starting point.

The majority of our customers use a mix of Small Business and Enterprise plans. Each customer is different, but they generally choose their mix based on cost, required features and the number of users they need to license.

Let’s look at a very simplified example. ABCD Co Ltd is a 200-person company. ABCD Co has an R&D team of 30 which has higher security and data requirements than the rest of the company. It also has a dispersed team of 25 home workers who need email but can use the online version of Office applications. All users require email.

mix and match o365 license

ABCD Co’s licensing set up might look like this:

  • 30 R&D users with Enterprise E5 licenses
  • 25 home users with Small Business Essentials
  • 145 users with Small Business Premium

Standalone Licenses

Day-to-day applications are included in the licensing plans, but more specialised applications can be licensed individually. Microsoft also offers add-on plans to enhance Office 365 products

Standalone licenses include; Visio, Project and Power BI Pro. Add-on plans include; Phone System and Audio Conferencing which are add-ons to Skype for Business, Exchange Online Advanced Threat Protection, Microsoft Intune and Enterprise Mobility and Security (E3 &E5).

Here’s How You Make the Biggest Savings

Creating a highly bespoke licensing plan for Office 365 isn’t as simple as it sounds and licensing is just part of the picture. Typically, while designing licensing plans, we’re also rationalising other cloud-services, moving services into the cloud and creating new capabilities. Microsoft licensing plans are simple, but not straightforward to set up, so it helps to have an expert on hand. Licensing isn’t exciting but it’s the key to keeping a lid on budgets and enabling collaboration and productivity in your organisation.


Find Out More

See our selection of our short video case studies featuring a few of our Office 365 and Azure clients. Good Microsoft licensing structuring is an important part of every migration or set up we complete.

If you would like to know more or talk to us about how Microsoft Office 365 might help your company, get in touch with us today.


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