Eliminating Redundant Microsoft Software: Stop Paying Twice for the Same Functionality

Eliminating Redundant Microsoft Software: Stop Paying Twice for the Same Functionality

Introduction – Why Redundancy is a Hidden EA Cost

Enterprise organizations often discover they’re paying twice for the same functionality in their software stack.

Microsoft 365 E5 bundles come loaded with advanced tools and services, yet many companies continue paying for third-party solutions that overlap with those very tools.

This redundancy hides within Enterprise Agreements (EAs) as a stealth cost – money wasted on duplicate capabilities that provide little or no added value. Read our Microsoft EA Optimization Guide.

Why does this happen? In many cases, businesses already invested in best-of-breed security suites, BI platforms, telephony systems, or storage services before upgrading to a Microsoft E5 bundle.

Microsoft’s sales push for the all-inclusive E5 bundle can lead to bundle redundancy – organizations end up licensing the same feature twice, once from Microsoft and once from another vendor.

The result is double-spending without a proportional benefit. Identifying and eliminating these overlaps is a strategic way to reduce costs and simplify your IT stack.

Common Overlaps with Microsoft 365 E5

Microsoft 365 E5 is Microsoft’s top-tier license bundle, and it covers a wide range of enterprise needs – from security to analytics to communications.

Unsurprisingly, these are also areas where companies often have incumbent third-party tools.

Common overlap categories include:

• Security & Threat Protection: The E5 license includes the Microsoft Defender suite (for endpoints, email, identity, etc.), which often duplicates capabilities of third-party security tools like CrowdStrike or McAfee. Paying for both an E5 security feature and an outside endpoint protection platform is a high-risk overlap for double-spending.
• Analytics & BI: Microsoft Power BI Pro is bundled with E5; however, some organizations maintain separate BI software, such as Tableau or Qlik. This means they are effectively paying extra for analytics tools despite already having Power BI included.
• Telephony & Conferencing: E5 comes with Microsoft Teams Phone System and advanced meeting capabilities. If a company continues to use a separate PBX or conferencing solution (e.g. Cisco telephony or Zoom), they are funding two parallel voice/call platforms. This overlap is very costly if left unchecked.
• Cloud Storage & File Sharing: Every E5 user gets OneDrive for Business and SharePoint for file storage. Nevertheless, teams may still incur expenses for third-party cloud storage services like Box or Dropbox. In such cases, you’re maintaining duplicate file repositories with redundant licensing fees.

To visualize these overlaps, consider the following typical redundancy areas within an E5 environment:

High overlap risk indicates a significant potential for duplicate spend – often major budget items, such as security suites or telephony contracts. Medium risk overlaps still present waste, but might impact fewer users or have partial usage of each side.

In all these cases, eliminating one of the two solutions can generate substantial savings. For example, if you’re paying $10 per user per month for a third-party BI tool that replicates Power BI, dropping that tool could save $120 per user annually (money that’s currently being spent twice). Multiply that by hundreds or thousands of users, and the savings quickly reach six or seven figures.

For more preparation, Eliminating Shelfware: How to Cut Unused Microsoft Licenses Before Your Renewal.

Inventory Overlapping Capabilities

The first step is to identify all overlapping capabilities in your IT environment.

A systematic inventory will reveal where you have redundancy between Microsoft E5 and other software licenses:

• Audit Your E5 Feature Usage: Start by reviewing which E5 components are actually deployed and used in your organization. List out the major features of M365 E5 (security modules, voice, analytics, compliance tools, etc.) and check usage logs or ask feature owners if those services are enabled and adopted.
• Map Third-Party Tools to E5 Features: Next, catalog all third-party software and services in use across the same categories. For each external tool, note if there’s an equivalent capability included in your Microsoft 365 suite. For example, if you use Zoom or Cisco for conferencing, that maps to Teams Phone/Meetings in E5; if you have Splunk for cloud app security, that overlaps with Microsoft Defender for Cloud Apps included in E5.
• Spot Duplicate Spend Areas: Identify where you’re paying for two solutions delivering the same outcome. These are your redundancy hot-spots. Common ones to look for are security (third-party endpoint or email security vs. Defender), analytics (third-party BI vs. Power BI), voice and video (external conferencing vs. Teams), storage (Box/Dropbox vs. OneDrive/SharePoint), and compliance tools. Any category where an E5 feature and a third-party tool serve the same purpose is a candidate to streamline.

This inventory provides a clear picture of where duplicate software licenses exist.

It’s important to involve both IT asset management and the operational teams using the tools to ensure you don’t miss shadow IT or department-level subscriptions that duplicate enterprise capabilities.

Rightsize your M365 licenses, E5 vs E3: Right-Sizing Your Microsoft 365 Licensing to Cut Costs.

Strategic Decision Paths

Once you know the overlapping areas, it’s time to make strategic decisions about each redundancy.

There are three primary paths to consider:

• Standardize on Microsoft: In this approach, you fully commit to the Microsoft E5 stack and drop the redundant third-party solutions. If the Microsoft tools meet your requirements (“good enough” in terms of features and security), consolidating on E5 can save money and simplify support. For example, you might phase out CrowdStrike in favor of Microsoft Defender, or retire Cisco phones in favor of Teams calling. This maximizes the ROI of your E5 licenses, since you’ll actually use the features you’re paying for.
• Keep the Third-Party & Downgrade Microsoft: This path makes sense if a particular third-party tool provides unique value or capabilities that Microsoft’s equivalent can’t match for your needs. In that case, you might decide to retain the specialized vendor and adjust your Microsoft licensing to avoid paying for what you’re not using. Practically, this could mean sticking with an E3 license (or E5 without certain add-ons) instead of E5 for some users, or negotiating a custom licensing plan. For instance, if Tableau is mission-critical for advanced analytics beyond what Power BI can do for certain teams, you could keep Tableau and opt those users for a lower Microsoft SKU that doesn’t bundle Power BI.
• Adopt a Mix-and-Match Approach: Many enterprises will use a hybrid licensing strategy to optimize costs. This means not all users get the same Microsoft license. You can assign E5 only to the user groups that will take advantage of all those advanced features (e.g. your IT security team, data analysts, or executives who need the full suite), and provide E3 or even more basic plans to others who don’t. Additionally, you might use E5 in some areas (and eliminate the third-party there) while in other areas stick with a third-party and not rely on E5’s feature. For example, you may standardize on Microsoft for security and storage, but maintain an external telephony system for certain regions – in which case, only those requiring Teams Phone would need E5. This selective approach prevents overpaying for E5 where it’s not used, while still leveraging it where it adds value.

Each decision path should be evaluated for cost impact, user impact, and risk. Regardless of the route you choose for overlap, the goal is to stop paying for two products that do the same thing.

In some cases, that means pulling back on Microsoft licensing; in others, it means saying goodbye to a third-party contract.

Negotiation Leverage Based on Redundancy

Redundancies don’t just inflate costs – they can also be turned into negotiation leverage. Use your overlap findings to drive a better deal with Microsoft (or, conversely, with the third-party vendor if you decide to keep them).

Here’s how:

• Show Microsoft You Have Alternatives: Vendors take note when you have viable options. Make it clear to your Microsoft account team where you are prepared to walk away from E5 features because you already use another solution. For example, “We use Zoom for telephony and have no intention of switching to Teams Phone right now.” By highlighting that an E5 component isn’t needed, you subtly pressure Microsoft to sharpen their pencil – they know you won’t pay extra for a capability you won’t use.
• Extract Discounts or Custom Bundles: Use the overlapping tools as a bargaining chip. If a significant portion of E5’s value is redundant in your environment, push for a higher discount on the E5 licenses or ask for concessions. Microsoft might offer flexible arrangements (like adding other add-ons at no cost, or extended price locks) to keep you on the full bundle. In some cases, enterprises have negotiated customer-specific SKUs or special credits by demonstrating, for instance, “Our E5 has X% overlap with existing tools, so the price needs to reflect that.” Even if Microsoft won’t strip out features à la carte, acknowledging the overlap can lead to better terms.
• Leverage Third-Party Negotiations Too: On the flip side, if you decide to drop Microsoft’s feature in favor of a third-party, you can use the threat of migration as leverage with that vendor. Let’s say you choose to keep Cisco telephony over Teams – Microsoft’s bundle gives you an alternative, so you can go to Cisco and negotiate a lower rate by indicating that you could leave for an included option. One way or another, knowledge of overlap gives you bargaining power to reduce costs.

In negotiations, information is power. By quantifying your overlapping spend, you present a compelling case that “We will not pay twice.” This can either reduce your Microsoft bill or prompt Microsoft to help fund deployment/migration (via incentives), so you’ll adopt their tool and drop the other vendor. Either outcome is a win for your budget.

Trimming Unneeded Bundles

Sometimes the simplest way to eliminate redundancy is to stop buying the all-inclusive bundle when you don’t need it. Microsoft 365 E5 is expensive; if your overlap analysis shows you’re not using a good chunk of its features, consider moving to a lighter plan and adding only what you need.

For example, dropping from E5 to E3 (which omits many of the advanced tools) could immediately cut costs, and you can then purchase à la carte add-ons for any specific E5 feature you truly require. This avoids paying for a “kitchen sink” bundle when only a few extra features were actually valuable to you.

On the other hand, if you do commit to E5’s full capabilities, make sure you trim the third-party fat to justify it. Rationalizing your bundle usage goes both ways. An illustrative example: Company X was on Microsoft E5 but still paying for a separate Cisco conference system.

They realized this redundancy during a mid-term license review. By replacing Cisco telephony with Teams Phone, they consolidated communication platforms. Armed with that decision, they approached Microsoft for a licensing discussion.

Because Company X was going all-in on the Microsoft solution (driving up Microsoft’s product usage), they negotiated a deeper discount on their E5 renewal in return.

The result was significant annual savings and a simplified vendor stack – one less contract to manage and a single ecosystem for employees.

Trimming unneeded bundles and tools is essentially about rationalization.

You’re aligning your spend with actual usage. If you’re not fully leveraging E5, don’t buy it across the board. If you are investing in E5, leverage everything it offers and cut out overlapping services. In both cases, you’ll lower costs and avoid the chaos of tool sprawl.

Case Example – Rationalizing for Savings

Let’s look at a brief real-world scenario that ties all these concepts together. A multinational firm (“Company X”) realized they had Microsoft 365 E5 licenses for all 10,000 employees, yet they were also running a third-party security suite and a legacy PBX phone system.

They were literally paying two sets of bills for endpoint security and for voice calls. After conducting an overlap inventory, Company X’s CIO made a strategic call: standardize on Microsoft for those functions.

They rolled out Microsoft Defender across all endpoints (retiring the separate security vendor) and began migrating offices from the PBX to Teams Phone.

With this plan in hand, Company X approached Microsoft to renegotiate their Enterprise Agreement. They demonstrated how they would be increasing adoption of E5 features (and had the option to drop E5 if pricing wasn’t favorable, since alternatives existed). Microsoft, eager to see full usage of E5, responded with a more aggressive discount and some free support services to help with the transition.

Company X then exited the third-party contracts for security and telephony, avoiding those annual fees entirely. The outcome: over $1M in yearly cost savings and a simplified IT environment with fewer overlapping systems.

The CIO also reported an unexpected benefit – with one integrated suite, their IT team could administer security and communications through a unified set of tools, improving efficiency.

This example highlights the value of rationalizing overlaps, with both immediate budget impact and longer-term operational benefits.

Governance to Prevent Future Redundancy

Eliminating redundant software isn’t a one-time project; it needs to be baked into your IT governance in the future. To prevent duplicate software licenses from creeping back in, consider these governance best practices:

• Pre-Purchase Overlap Check: Establish a policy that, before any new software is purchased, the request must be reviewed for overlap with existing platforms (especially the Microsoft 365 suite). For instance, if a department wants to buy a new collaboration or security tool, IT or procurement should vet whether an equivalent feature already exists in the Microsoft ecosystem you own. This prevents well-meaning managers from unknowingly buying something you’re technically already paying for via E5.
• Renewal Time Assessments: Use contract renewals as trigger points to reassess redundancy. Whenever a major software contract (Microsoft or a third-party vendor) is up for renewal, conduct a quick overlap audit. If you’re renewing Microsoft, check which E5 features went unused because a third-party was doing that job – maybe you decide not to renew that third-party and start using the Microsoft feature (or vice versa). Conversely, if you’re renewing a third-party tool that has parallels in E5, evaluate if you can drop it and activate the Microsoft alternative instead. Regularly scheduling these evaluations (at least annually) ensures you continuously align your spend with your needs.
• Educate Stakeholders: Make sure your IT architects, procurement team, and even business unit leaders are aware of what’s included in your Microsoft bundles. Often, redundancy happens simply because people don’t realize they already have a capability on hand. A bit of internal marketing of the E5 features and training on how to use them can go a long way. Similarly, maintain a central software portfolio catalog that highlights which major functions are covered by enterprise platforms. This transparency and education create natural checks against purchasing duplicate software due to ignorance.
• Centralize Software Governance: Finally, consider having a cross-functional committee or SAM (software asset management) group oversee technology acquisitions with an eye toward standardization. A governance board that reviews new software requests and cloud subscriptions can catch overlaps early. By enforcing architecture standards (e.g. “use the approved corporate tool unless a strong case is made otherwise”), you avoid the proliferation of redundant apps. Good governance will keep your environment streamlined and cost-efficient over the long term.

Checklist – Redundant Software Elimination Actions

Use the following checklist to guide your initiative to eliminate redundant software and stop paying twice:

• Audit your current stack – Inventory all Microsoft 365 E5 features in use and all third-party software tools, identifying where functionalities overlap.
• Identify major overlap categories – Pinpoint the areas of duplication (security, telephony, analytics, storage, etc.) where you maintain two solutions for the same job.
• Choose a strategy for each overlap – Decide whether to standardize on the Microsoft solution, retain the third-party, and adjust Microsoft licensing, or adopt a mixed approach for different user groups.
• Leverage overlaps in negotiations – Don’t go into contract discussions empty-handed. Use your knowledge of redundant spend to negotiate better pricing or terms, whether with Microsoft (for E5 bundles) or with other vendors.
• Eliminate duplicate costs – Take action by canceling or phasing out the unnecessary licenses. This could mean downgrading Microsoft E5 to E3 for some users, or discontinuing an external software subscription that E5 can replace. Ensure you actually execute the removal of one side of each overlap.
• Implement ongoing governance – Put policies in place to avoid future redundancies. Require overlap checks before new purchases, review E5 vs third-party usage at every renewal, and keep stakeholders educated about what’s already included in your enterprise bundles.

By following this checklist, CIOs and IT leaders can systematically root out redundant software licenses and regain control of their IT budgets.

The end goal is a leaner, more cost-effective software portfolio where every tool serves a clear purpose – and you’re never paying two vendors for the same functionality.

Read about our Microsoft EA Negotiation Service.

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