Are You Overpaying for Microsoft 365 Licences?

Most South African businesses are overpaying for Microsoft 365 by 15-30% because nobody has audited who actually needs what. Ex-staff still hold licences, everyone is on Business Premium when half the team only needs Business Basic, and shared mailboxes have been converted to full user licences. A one-hour audit usually pays for itself many times over.

Why do Microsoft 365 licence costs quietly balloon?

Microsoft 365 licensing looks simple when you sign up. Ten staff, ten licences, done. But businesses grow in messy ways — someone leaves and their licence stays live "just in case", a bookkeeper needs shared access to an inbox so IT spins up a full user, a new hire gets Business Premium because that's what the last person had.

A year later you're paying for licences nobody uses, and everyone is on the same expensive plan whether they need the security features or not. The rand-dollar exchange rate means every unused seat hurts more than it used to.

We see this constantly when onboarding new clients. A firm of 22 people paying for 31 licences. An accounting practice on Business Premium across the board when the two admin staff only ever open Outlook and Excel. It adds up fast.

What is the difference between Business Basic, Standard and Premium?

Here's the plain-English version of the three plans most SMBs sit on:

The honest answer for most professional services firms handling client data: your fee earners and directors should be on Business Premium (the security features are worth it), and truly light users — reception, part-time bookkeeper, warehouse staff who only check email on a phone — can often sit on Basic.

Mixing plans is completely fine. You don't have to standardise everyone on the most expensive tier.

How do you audit your current Microsoft 365 licences?

You don't need special tools to start. Log into the Microsoft 365 admin centre and pull two reports:

1. Active users list — every licensed account, when they last signed in, and what licence they hold.
2. Licence assignment report — how many licences you're paying for versus how many are actually assigned.

Then work through this checklist:

• Ex-staff still licensed? If someone left three months ago and their licence is still active, you're burning money. Convert their mailbox to a shared mailbox (free, up to 50GB) and remove the licence.
• Anyone not signed in for 60+ days? Investigate. It's either a dormant account, a service account that shouldn't have a licence, or someone who genuinely doesn't use the tools.
• Shared mailboxes with full licences? A shared mailbox does not need a user licence unless it exceeds 50GB or needs to send from itself in specific ways. This is one of the most common mistakes.
• Business Premium on the wrong people? If a staff member never touches sensitive data and only uses email, Premium is overkill.
• Duplicate licences? Some businesses end up with users assigned two overlapping plans after a migration. It happens.

The first pass usually surfaces obvious savings. The second pass — matching plans to actual usage — is where the real optimisation sits.

What about security if you downgrade some users?

This is the trap. Cost-cutting on licences without thinking about security is how businesses end up with a compromised account on the one user who wasn't protected.

Business Premium includes Microsoft Defender, conditional access policies, multi-factor authentication enforcement, and device management through Intune. If you drop a user to Basic or Standard, you lose those protections for that account.

The rule we apply: anyone who handles client data, financial data, or has access to sensitive SharePoint sites stays on Premium. That usually means directors, fee earners, finance, HR and IT admins. Light-touch users can safely sit on cheaper plans provided you still enforce MFA (which is free) and have baseline cyber security services covering the whole tenant.

Don't strip security to save R150 a month on a user who could get phished tomorrow. The maths doesn't work.

When should you consider add-ons instead of upgrading the plan?

Sometimes you only need one feature from a higher tier. Microsoft sells many capabilities as standalone add-ons — Exchange Online archiving, Defender for Office 365, Intune, Power BI, Teams Phone.

Examples:

• Need call handling for reception but not the whole voice system? A Teams Phone add-on may be cheaper than moving everyone up. We cover this properly in our VoIP and business telephony work.
• Need MFA and conditional access but not full Premium? Entra ID P1 as an add-on is often the sweet spot.
• Need bigger mailboxes? Exchange Online Plan 2 upgrade beats moving to a full E-series licence.

This is where good Microsoft 365 management earns its keep — matching the licence stack to what the business actually does, not what looks tidy on a spreadsheet.

Key facts

• MiBOT Support runs Microsoft 365 for professional services firms across Gauteng and beyond as part of our managed IT support.
• We're ISO/IEC 27001:2022 certified, so security posture is baked into how we structure licences — not an afterthought.
• Shared mailboxes up to 50GB do not require a paid user licence.
• Ex-staff mailboxes can be converted to shared mailboxes and preserved without ongoing licence cost.

Frequently asked questions

How often should we audit our Microsoft 365 licences? At least twice a year, and always after any staff changes or an annual renewal. Businesses that grow or lose staff quickly should look monthly. It's a 30-minute job once someone knows what they're doing.

Can we mix and match plans across the team? Yes, and you should. There is no rule that everyone must be on the same plan. Match the licence to the role — fee earners and finance on Premium, light users on Basic or Standard.

What happens to a user's data if we remove their licence? The mailbox becomes inactive after 30 days unless you convert it to a shared mailbox first. OneDrive data has a retention window (typically 30 days by default) before deletion. Always offboard properly rather than just unassigning a licence.

Will Microsoft tell us if we're overpaying? No. Microsoft is a great platform but the billing model rewards inaction. Your provider, or someone inside your business, needs to own this.

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If licence bloat has been quietly climbing every year and nobody has looked properly, that's a great place to start a conversation. Feel free to book a free consultation and we'll walk through your tenant with you — no obligation, plain English, and you keep whatever we find.

Last reviewed: August 2026