Office 365 licensing

Introduction

The Microsoft 365 Licensing document gives a clear, end-to-end view of how licenses are being used across an organization. It helps administrators understand where licenses are allocated, spot areas of inefficiency, and make confident, data-driven decisions to improve both cost efficiency and overall usage.

Document types

The Office365 licensing document produces detailed output based on the selected analysis type:

• License consumption
• License optimization
• Service plan matrix

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. Without this permission, the document generation will fail to fetch SKU and license allocation data.
• User.Read.All — Required to read user profiles and their assigned licenses. Without this permission, user-level license details, inactive user reports, and overlapping assignment data will not be available.

1. License consumption document

The License consumption document provides a detailed summary of Microsoft 365 licensing SKUs and their associated service plans. It helps organizations understand how licenses are allocated, consumed, and utilized across the tenant.

Key insights

• License allocation across users
• Usage and availability of licenses
• Service plan distribution within each SKU

Document structure

The document includes the following sections:

• Tenant details
  Overview of the organization’s tenant information
• Paid SKUs overview
  Summary of purchased licenses and their usage
• SKU details
  Detailed breakdown of each SKU and its assigned users
• Paid SKUs (Free tier)
  Information on free-tier licenses associated with paid subscriptions
• Trial / Free SKUs
  Details of trial and free licenses in use
• Service plan inventories
  Mapping of SKUs to their respective service plans
• Waste overview
  Identification of underutilized or unused licenses

2. License optimization document

The License optimization document identifies potential cost-saving opportunities by analyzing license usage patterns and highlighting inefficiencies.

Key insights

• Unused or underutilized licenses
• Redundant or overlapping license assignments
• Optimization opportunities for cost reduction

Document structure

The document includes the following sections:

• License consolidation opportunities
  Suggestions to reduce redundant licensing
• Disabled users with active licenses
  Licenses assigned to users who are no longer active
• Inactive users with active licenses
  Users who have not used services but still hold licenses
• Users with overlapping license assignments
  Users assigned multiple licenses with duplicate service plans

3. Service plan matrix document

The Service plan matrix document provides an interactive cross-reference between Microsoft 365 SKUs and their service plans. It helps in understanding service plan distribution and overlaps across different SKUs.

Key insights

• Relationship between SKUs and service plans
• Shared and exclusive service plans
• Overall service plan distribution

Document metrics

The document includes:

• Total SKUs
• Unique service plans
• Average plans per SKU
• Service plans shared across SKUs
• Exclusive service plans
• Total users

Generate a document

1. Click New configuration on the Azure Documenter homepage.
2. Enter a name for the configuration and click Next.
3. Select the required subscriptions and click Next.
   • Ensure the selected subscription has a client with appropriate access to retrieve tenant license consumption and related details.
4. Choose the required Document type and click Next.

5. Configure the publish settings and proceed.

6. Set up notification channels to receive document generation updates.
7. Click Preview document to review the selected report structure and content.
   • This ensures it aligns with your requirements before generation.
8. Click Generate to create the document.

The document can also be generated using the Generate Document option available within any existing configuration.

Once the generation is complete:

• A URL will be generated for accessing the document
• The document can also be downloaded using the Download option