License optimizations

Overview

License optimizations is a document type in Azure Documenter that identifies potential opportunities to optimize Microsoft 365 licensing. It analyzes license usage patterns and highlights inefficiencies such as unused licenses, overlapping assignments, and licenses held by inactive users.

The License optimizations document analyzes license usage patterns and highlights where licenses can be reclaimed or consolidated. It covers:

• Unused or underutilized licenses — licenses not being actively used
• Redundant or overlapping license assignments — users assigned multiple licenses with duplicate service plans
• Optimization opportunities — concrete actions to reduce license spend

Document structure:

• Summary — an overall assessment of optimization potential. A summary table shows counts for consolidation opportunities, overlapping license combinations, disabled users with licenses, inactive users with licenses, and total users analyzed. Bar charts beneath the table show the user-level percentage breakdown across five categories: consolidation opportunities, overlapping licenses, disabled users with licenses, inactive users with licenses, and users with no issues detected.
• License consolidation opportunities — identifies SKU combinations that could be replaced by a single comprehensive SKU. For each opportunity, the document shows the recommended target SKU, current licenses to replace, total users affected, overlap analysis (unique user count and duplicate license count), potential savings count, business benefit, and a recommended action. The section also includes guidance on how to evaluate and act on each consolidation recommendation before migrating users.
• Users with overlapping license assignments — lists users assigned multiple SKUs with duplicate service plans, where duplicate services are unnecessarily paid for. Each entry shows the SKU combination, the number of affected users, the count of overlapping service plans, the overlapping service plan identifiers (shown as technical plan codes such as FORMS_PLAN_E1 or MCOSTANDARD), and a sample list of affected user accounts.
• Disabled users with active licenses — lists accounts that are disabled in Microsoft Entra ID but still hold active license assignments. Includes a license type summary table (license type and count per SKU) followed by a per-user breakdown showing user principal name, display name, user type, number of licenses, and assigned licenses.
• Inactive users with active licenses — lists users who have not signed in for 30 or more days, or who have never signed in, but still hold active license assignments. These may be abandoned accounts or users who no longer need access. Includes a license type summary table followed by a per-user list showing user principal name, display name, user type, number of licenses, assigned licenses, last sign-in date, and days inactive. Populating the last sign-in and days inactive columns requires the AuditLog.Read.All application permission on the app registration and an Azure AD Premium P1 or P2 license on the tenant.

Prerequisites

The app registration must have the following application permissions configured in Microsoft Entra ID:

• Organization.Read.All — required to retrieve organization-level license and tenant details.
• User.Read.All — required to read user profiles and their assigned licenses.

Configuration

Use the following steps to generate a License optimizations document. Navigate to Azure Documenter to get started.

1. Click New configuration. The Configure your document wizard opens.
2. In Step 1 — Basics, enter a configuration name. Under Choose document type, select License optimizations. Click Next.
3. In Step 2 — Service principal, select the service principal and configure the subscription scope. Ensure the selected subscription has a client with appropriate access to retrieve tenant license data. Click Next.
4. Complete Steps 3–6 (Branding, Publish settings, Schedule, Notifications) as required. Click Next after each step.
5. In Step 7 — Review, confirm your configuration and click Finish.

Once generation is complete, a URL is created for the document, and you can download it using the Download link.

Limitations

• Document generation depends on the Organization.Read.All and User.Read.All Microsoft Entra ID permissions being granted with tenant-wide admin consent; missing consent results in incomplete or failed output.