Microsoft 365 Managed Services: Optimize Licensing & Lower Costs

Are You Paying Too Much for Microsoft 365?

Microsoft licensing is more complicated than you would think. Decoding the different plans, tiers, and fine print can feel like a 1,000 piece puzzle, especially when you are managing licensing for hundreds or thousands of users.

Many growing companies overspend on Microsoft 365 licensing or miss out on better options simply because the system isn’t built for clarity. This often leads to unused seats, wrong tiers, and overlapping plans.

Maybe you’re paying for enterprise-level features that a small team doesn’t need, or you’ve been locked into a multi-year contract without realizing there were cheaper, more flexible alternatives.

With Microsoft 365 becoming an indispensable tool for businesses to drive growth and scalability, spending more on licenses than necessary becomes a business problem, not a technical issue.

Microsoft 365 managed services can help you navigate these challenges, ensuring your Microsoft 365 investment is maximized by optimizing costs, compliance, and performance.

What Are Microsoft 365 Managed Services?

In the IT industry, managed services enable you to outsource system management and business administration tasks to a managed service provider (MSP) that specializes in customizing cloud solutions to meet your specific requirements. Working with a managed service provider provides your organization with access to a comprehensive range of IT services and support.

When you choose Microsoft 365 managed services, you get the support of a dedicated team of experts to manage your needs. That includes license management, security configurations, updates, admin tasks, and more. Your users receive the support they need, and your IT team can stay focused on their key business priorities while enhancing governance and driving ROI.

Here are some top reasons organizations adopt managed services for Microsoft 365:

• License management
• Support on demand
• Security Scale
• End-to-end Service Delivery
• Reduce Downtime (Disaster Recovery)
• Microsoft 365 deployment
• Regular Updates and Maintenance
• Training and Adoption
• Advanced Analytics and Insights
• 24/7 Monitoring and Support

The Cost Problem with Microsoft Licensing

At Plow Networks, we’ve worked with clients across industries to help them identify hidden costs and optimize their Microsoft 365 investments. Through our experience, here are five common ways companies are wasting money:

1. Over-licensing (more seats than users): Many organizations purchase more licenses than they currently need to “prepare for future demand,” but this often results in a significant portion of licenses sitting idle, especially premium licenses. These unused licenses become a financial burden, draining resources over time. Some studies indicated that over 56% of Microsoft 365 licenses are either inactive, unassigned, or underused.  

2. Underutilized premium licenses: A common misstep that organizations make is assigning premium licenses, such as E3 or E5, to every employee, regardless of their actual needs. This blanket approach results in paying for capabilities that many employees never utilize.

3. Overlapping subscriptions: Many organizations inadvertently pay for third-party tools that provide functionalities already included in their Microsoft 365 subscriptions, such as file storage or business intelligence tools. This duplication of services results in unnecessary spending.

4. Not downgrading after project completions: Temporary projects often require elevated access or additional services, leading to the assignment of higher-tier licenses. However, once these projects are completed, organizations often forget to reassess and downgrade those licenses. This oversight causes ongoing costs for features that are no longer necessary, quietly inflating the Microsoft 365 bill.

5. Lack of visibility: Without insights into how licenses and add-ons are being used—or worse, left unused—organizations risk overspending on services that no longer provide value.

How Microsoft License Optimization Works

At Plow Networks, license optimization isn’t a one-time cleanup—it’s a strategic, ongoing process. Our approach is designed to help you eliminate waste, reduce costs, and stay compliant, all while ensuring your users have exactly what they need to stay productive.

• Audit existing licenses: We start with a thorough audit of your existing licensing, focusing on identifying over-provisioning and underutilization. This involves examining license assignments, usage patterns, and comparing them with current business needs.
  
• Identify unused or unnecessary licenses: We help you identify unused licenses and reveal where downgrades or add-ons can save costs without jeopardizing productivity.
  
• Recommend lower-cost plans where applicable: Unless a user specifically requires a higher level of access, we can assign them to a lower license tier, and your organization will only pay for what is necessary. By assigning users to lower license tiers, you can more effectively manage your budget and ensure that resources are utilized efficiently.
  
• Monitor usage over time: It may sound simple, but one key method to optimize and reduce Microsoft 365 license costs is to understand how licenses are being utilized. Monitoring, alerting, and communicating how licenses are being used may uncover new ways to minimize costs. This shouldn’t be a one-time approach, but rather a continuous monitoring process over time.
  
• Stay compliant while reducing costs: We review your entire licensing setup to ensure you’re not left vulnerable. Licenses incorrectly assigned could expose excessive access to critical data, creating both compliance and security vulnerabilities.

Case Study: Plow Networks helped a 300-user company save $43,200 annually by optimizing current users and uncovering defunct and unused licenses. This license optimization wasn’t about cutting features, but rightsizing the environment.

Benefits of Microsoft 365 Managed Services Beyond Cost Savings

• Improved security and compliance

Protecting your data is essential for any business, and Microsoft 365 managed services are a great solution. With automated backups, two-factor authentication, and advanced encryption measures in place, you can rest assured that your information is safe from malicious attacks or human error.

• Regular updates and patching

Microsoft 365 evolves constantly. Managed support ensures your software remains up to date with the latest features and security patches. This ensures that it always utilizes and leverages the most secure and efficient versions of Microsoft Technologies for improved utilization and adaptation.

• Faster issue resolution

Technical issues can happen anytime. Managed support offers round-the-clock help from professionals who specialize in Microsoft Technologies. Whether email downtime or Teams not working, you get fast solutions without long delays.

• Less burden on internal IT

In-house IT teams often juggle multiple responsibilities, from routine maintenance to strategic initiatives. Adding Microsoft 365 management to this mix can stretch resources thin. The time-intensive nature of Microsoft 365 management can divert attention from core business objectives, hindering growth and competitiveness in the long run.

• Strategic alignment with Microsoft roadmap

Managed Service Providers help organizations align the Microsoft 365 roadmap with business goals by providing strategic guidance, managing rollouts, and driving user adoption. They also ensure secure configuration, update governance, and optimize the environment as new features are introduced.

Why Work with Plow Networks?

When it comes to managing Microsoft 365, the right partner can make all the difference. Plow Networks stands out by combining deep Microsoft expertise with a business-first approach that keeps your organization’s needs front and center.

• Microsoft expertise and partnership

As a Microsoft Tier 1 Provider, Plow Networks brings specialized knowledge and insights into the Microsoft ecosystem. This relationship ensures you’re not only compliant but also positioned to take full advantage of Microsoft 365’s capabilities.

• Business-first approach → aligning licenses to actual needs

Rather than a one-size-fits-all model, Plow Networks focuses on aligning licenses to the actual needs of your teams. That means identifying underutilized licenses, rightsizing where appropriate, and ensuring every dollar spent supports business goals.

• Use of proprietary tools/processes for license optimization

Plow Networks uses a proprietary optimization tool to identify opportunities for cost savings—insights that go beyond what’s visible in standard dashboards. Our tool allows for more precise, data-driven recommendations tailored to your environment.

• Ongoing advisory, not one-time audit

Instead of offering a one-time audit, Plow Networks provides continuous advisory support, especially at the time of renewal. This ensures that as your organization evolves—through growth, restructuring, or new strategic priorities—your Microsoft 365 environment evolves with it.

Want to explore how much you could save on Microsoft 365 licensing? Contact Plow Networks for a licensing optimization consultation.