Developing a Microsoft Licensing Strategy Step-by-Step
Microsoft’s licensing strategy requires structure.
Without it, cost and risk grow.
This guide provides a clear step-by-step framework.
For more insights, read our ultimate guide, Microsoft Licensing Strategy & Optimization.
Step 1 – Assessing the Current Microsoft Licensing Landscape
Start with a complete licensing assessment. Identify every agreement and license in use. This provides a baseline for strategy.
Checklist:
- ✔ Identify all agreements.
- ✔ List active licenses.
- ✔ Capture contract terms.
- ✔ Document renewal dates.
- ✔ Identify licensing models.
Expert Insight: Strategy starts with knowing what you already own.
Step 2 – Mapping License Usage to Business Needs
Analyze current license usage. Match each license to actual business requirements. Find users with too many or too few licenses.
Checklist:
- ✔ Review active users.
- ✔ Identify usage patterns.
- ✔ Separate power users.
- ✔ Identify low usage roles.
- ✔ Highlight misalignment.
Expert Insight: Licenses must follow actual business use.
Step 3 – Defining Business and IT Objectives
Outline key business and IT goals. Align the licensing plan to these objectives. Plan licenses to support future initiatives.
Checklist:
- ✔ Workforce plans.
- ✔ Security priorities.
- ✔ Cloud adoption goals.
- ✔ Cost control targets.
- ✔ Flexibility needs.
Expert Insight: Licensing strategy must reflect future direction.
Avoid these Common Microsoft licensing mistakes.
Step 4 – Choosing the Right Licensing Models
Evaluate all available licensing models. Select the model best suited to your organization. Consider each model’s required commitment and flexibility.
Checklist:
- ✔ EA versus CSP.
- ✔ Subscription versus perpetual.
- ✔ User versus device licensing.
- ✔ Consumption exposure.
- ✔ Commitment tolerance.
Expert Insight: The model determines long-term risk.
Read about Adapting Your Licensing Strategy for Cloud Services.
Step 5 – Rightsizing License Tiers and Products
Adjust license levels to actual needs. Avoid assigning premium licenses by default. Provide higher tiers only as needed.
Checklist:
- ✔ Review SKU assignments.
- ✔ Downgrade where possible.
- ✔ Avoid blanket upgrades.
- ✔ Separate security needs.
- ✔ Control exceptions.
Expert Insight: Over-licensing erodes strategic value.
Step 6 – Planning for Growth and Change
Prepare for organizational changes. Build scenarios for growth or reduction. Ensure licenses can adapt with minimal cost.
Checklist:
- ✔ Workforce growth scenarios.
- ✔ Mergers or divestments.
- ✔ Remote work shifts.
- ✔ Application changes.
- ✔ Security evolution.
Expert Insight: Strategy must handle change without panic.
Step 7 – Aligning Licensing With Budget Strategy
Connect licensing plans to the budget. Target predictable and efficient spending. Prevent cost surprises through planning.
Checklist:
- ✔ Predictable spend targets.
- ✔ Cost smoothing.
- ✔ Multi-year planning.
- ✔ Avoiding surprise costs.
- ✔ Linking licenses to value.
Expert Insight: Budget alignment prevents reactive decisions.
Step 8 – Building Governance Into the Strategy
Implement clear licensing governance. Define roles and processes for oversight. Enforce rules to keep licensing on track.
Checklist:
- ✔ Define ownership.
- ✔ Set review cycles.
- ✔ Control procurement.
- ✔ Track changes.
- ✔ Report outcomes.
Expert Insight: Strategy fails without governance.
Step 9 – Preparing for Renewals and Negotiations
Plan early for agreement renewals. Gather accurate usage data. Define clear requirements for the next term. Set specific goals for the negotiation. Approach the renewal with a solid strategy.
Checklist:
- ✔ Clean usage data.
- ✔ Clear requirements.
- ✔ Timing awareness.
- ✔ Internal alignment.
- ✔ Negotiation objectives.
Expert Insight: Preparation drives better negotiation outcomes.
Step 10 – Embedding the Strategy Into Daily Operations
Integrate the strategy into daily work. Update procedures to align with it. Train staff on the new processes. Use tools to automate compliance tracking.
Checklist:
- ✔ Update processes.
- ✔ Train teams.
- ✔ Integrate tools.
- ✔ Monitor compliance.
- ✔ Review regularly.
Expert Insight: A strategy only works when used daily.
Step 11 – Measuring and Adjusting the Strategy Over Time
Monitor the strategy’s performance. Measure cost savings and risk reduction. Refine the strategy to meet changing conditions.
Checklist:
- ✔ Track savings.
- ✔ Track risk reduction.
- ✔ Review assumptions.
- ✔ Adjust for change.
- ✔ Improve maturity.
Expert Insight: Licensing strategy is never static.
6 Expert Takeaways
- Strategy starts with visibility.
- Usage must drive decisions.
- Future planning matters.
- Governance sustains results.
- Budget alignment reduces stress.
- Preparation improves negotiations.
Read about our Microsoft Optimization Services.
