License recommendations

Overview

The Licenses tab in Optimization looks at each purchased license instead of each person. For every license, it shows the seats you bought but did not assign, the seats held by people who do not use them, and the people who could move to a cheaper license. You can raise the changes as tasks.

Tenant Manager cannot change how many seats you purchased. For an overbought license, a task goes to your IT team, who change the subscription in the Microsoft 365 admin center.

Business value

The tab shows where you pay for seats nobody uses, and how much you would save by acting. You can reclaim seats from inactive holders before you buy more, and cut the purchase when seats stay unused.

Prerequisites

Before you use the tab, connect the tenant and let it finish its first sync. See Connect a Microsoft 365 tenant.

Required permissions

You need Read on Optimization to view the tab. You need Manage on Optimization to add recommendations to tasks, ignore them, and restore them. The Owner and Contributor roles have both. The Reader role has Read only. For details, see Roles and permissions in Tenant Manager.

Dependencies

Last sync: the tab shows the licenses, assignments, and users that the last sync read.
Seat prices: savings need a seat price, from the tenant's billing account or from a custom price in the Global price catalog.

How it works

Select the tenant in the tree view, expand License management, select Optimization, and then select the Licenses tab. The rules behind each recommendation are in Recommendations and savings. This article shows how to read and use the tab.

Tiles and filters

Four tiles sit above the grid.

Tile	What it shows
Recommendations	The licenses where seats can be reduced, reclaimed, or swapped. Trial licenses and licenses with nothing to change are not listed.
Unused seats	The seats you pay for that are not assigned to anyone.
Seats to reclaim	The seats assigned directly to users who are disabled, inactive, or have never signed in.
Annual savings	The estimated yearly saving if every suggestion were taken, which is the monthly saving times 12. It counts only licenses with a known price.

The filter pills cut the list.

Filter	Licenses it lists
All	Every license with a recommendation.
Overbought	Paid licenses with more seats purchased than assigned.
Fully used	Paid licenses where every seat is assigned and at least one holder could be reclaimed.
Swap license	Licenses that have people who could move to a cheaper license. See Swap license recommendations.
Ignored	Licenses whose recommendation you ignored.

Columns

These columns are shown by default. You can add the others in Column options.

Column	What it shows
License	The license name. This column is always shown.
Purchased, Assigned, and Unassigned	The seats you bought, the seats assigned, and the seats left.
To reclaim	The people who hold the license directly and are disabled, inactive past the Inactive line, or never signed in. Removing it frees their seats.
Reason	Why the license is listed.
Monthly savings	The unused seats at the seat price, plus the removals and swaps that are not yet requested. A dash means no price is known.
Ignored until	Shown on the Ignored filter.
Recommendation	The recommended change in a sentence, for example reducing the subscription by a number of unused seats, removing the license from people, or moving people to a cheaper license.

The columns hidden by default are Type, Suggested action, SKU, Status, and Confidence. Type shows Trial or Paid. Status shows the state Microsoft reports, such as Active, Grace period, Suspended, Locked out, or Deleted. Confidence applies to overbought licenses only. It is High when at least half of the purchased seats are unused, Medium when at least a fifth are unused, and Low otherwise. Rows are sorted by the biggest known saving, then by unused seats, then by holders, and then by swaps.

Purchase changes and licenses that are not listed

For an overbought license, the recommended change is Reduce the purchase. The popup shows a meter of the seats assigned out of the seats bought. Because Tenant Manager cannot change a purchase, adding it to tasks creates a task with the status Ready to notify. That task cannot be approved. You use Trigger notification to alert your IT team, and then Mark as done once they make the change. See License tasks.

Trial licenses are never listed, because a trial has no purchase to change. A license that is licensed to the tenant rather than to people is also skipped, because unassigned seats are expected there.

Steps

The steps below cover the common tasks on the Licenses tab. You start in Optimization for the tenant, with the Licenses tab open. For ignoring, restoring, and the settings, see Optimization overview.

Review a license recommendation

This procedure shows the figures behind a recommendation before you act.

Select a filter pill, for example Overbought.
Select a row to open the recommendation popup.
Read the summary card and the Details. The facts include the type, the seats, the confidence, and the status. Select Explain if you want an explanation in plain words.
Use the arrows in the header to step to the next license.

Reduce an overbought purchase

This procedure raises a task for your IT team to reduce the subscription by the unused seats.

Select the Add to tasks icon on an overbought row. You can also select the row, tick Reduce the purchase in Changes to raise, and select the footer button.
Read the confirmation. It says that Tenant Manager cannot change a purchase.
Select Continue.
In Tasks, check the new task, and select Actions > Trigger notification to alert your IT team.
When the change is made in the Microsoft 365 admin center, select Actions > Mark as done.

Reclaim seats from holders

This procedure removes the license from the people who do not use it, before you buy more seats.

Select the row, and open the popup.
In Changes to raise, tick the Remove changes for the holders you want.
Select Add n changes to Tasks, and then Continue.

The requests appear in Tasks with the status Awaiting approval. Changes to raise can also include a Swap for each person who uses little of the license and could move to a cheaper one. Each swap needs a free seat of the cheaper license. See Swap license recommendations.

Permission behavior

What you can do on the tab depends on your role.

Without Manage on Optimization, Add to tasks, Ignore, Restore, and Actions are disabled. Hover over one to see "You are not authorized to perform this operation".
A purchase change that is already waiting in Tasks shows a banner, "Already requested", with a View in Tasks link.
You cannot approve a purchase change, whatever your role. Your IT team makes it in the Microsoft 365 admin center.
Explain needs the Use AI agents permission and the account's AI agents switch. Without them, the button is hidden. On private hosting, it also needs an OpenAI connection. For how explanations work, see Optimization overview.

Example scenario

Chiara Romano, a module owner at Lamna Healthcare, suspects the company bought more seats than it uses. She opens Optimization for Lamna Healthcare Milan, selects the Licenses tab, and then the Overbought filter. The first row is a license with a High confidence, because most of its seats are unassigned.

She selects Add to tasks and enters a ticket number in the note. In Tasks, she selects the new task and chooses Trigger notification, so the IT team can reduce the subscription. When they confirm the change, she selects Mark as done.

Limitations

Tenant Manager cannot change a purchase. It can only raise a task for your IT team.
Trial licenses are not listed and are left out of every seat and cost figure.
Licenses that are licensed to the tenant instead of to people are skipped.
Recommendations come from the last sync. They are not live.
The savings include only licenses with a known price.

Troubleshooting

A purchase change was skipped and says that it already has a purchase change waiting under Tasks.
Cause: an open task already covers the license.
Fix: finish or decline that task in Tasks, and then raise the request again.
A purchase change was skipped and says that there are no unused seats to reduce.
Cause: the seats were assigned after the page loaded, or the license has none unassigned.
Fix: reload the page and check the Unassigned column.
Monthly savings shows a dash.
Cause: no price is known for the license.
Fix: set a custom price in the Global price catalog, or connect a billing account that Tenant Manager can read.
The popup shows "Already requested" with a link to Tasks.
Cause: a purchase task for the license is open.
Fix: select View in Tasks, and finish the task there.
A license you expected is missing.
Cause: the license is a trial, is licensed to the tenant rather than to people, or has nothing to change.
Fix: none is needed. These licenses are not listed.

FAQs

Can Tenant Manager reduce my seat count?
No. It raises a task for your IT team, who change the subscription in the Microsoft 365 admin center. Mark the task as done once the change is made.
Why is a fully used license listed?
A license is listed under Fully used when every seat is assigned and at least one holder could be reclaimed. Reclaiming a seat frees it before you buy another.
Why are trial licenses not listed?
A trial has no purchase to change, and it is left out of every seat and cost figure.