Microsoft 365 License Audit
If you think you’re paying Microsoft more than you should, you're probably right.
If you don't think you're paying Microsoft more than you should, you're probably wrong.
Microsoft 365 licensing has always been a hyper-complex web of overlapping features. It's always felt overly complex, almost on purpose. But that isn't the real problem.
Between terminating users, forgotten trials, and feature creep, maintaining a clean tenant is practically impossible.
Every organization I've assessed has waste in their Microsoft 365 environment. Every. Single. One.
For most, they're wasting 20% to 30% of their budget. Mostly on dead accounts or under-utilized licenses, but there are also unassigned licenses that creep costs into your business.
Whether your boss is breathing down your neck, your eyes widened at your bill, or you just want to look like a hero, this guide gives you the exact blueprint to audit your environment, eliminate waste, and protect your budget.
What Is A Microsoft 365 License Audit?
A Microsoft 365 license audit is a comprehensive review of an organization's Microsoft cloud tenant to reconcile purchased licenses against actual user assignment, feature utilization, and contractual compliance. The goal of an audit is twofold: to identify financial waste (such as inactive accounts or unassigned E5 features) and to surface hidden non-compliance risks before a formal vendor review.
How Much Can A Microsoft 365 License Audit Actually Save?
On average, a company saves 22% of their cloud costs by running a Microsoft 365 license audit. I've found that number to stay roughly the same regardless of your business size. That waste comes from:
- Licensed accounts that are disabled.
- Licensed accounts that haven't signed in for over 30 days.
- Accounts with expensive licenses that aren't being used.
- Unassigned licenses.
- Poor license terms that haven't been addressed.
How often should an organization audit its M365 licensing?
It's recommended to run a license audit before renewal, or at least once a year. Some organizations are seasonal and may need to run an audit after a busy season. Other organizations may have high turnover and need an M365 license audit quarterly.
The Internal License Audit
The easiest and fastest way to get your Microsoft 365 house back in order is using Gitbit's free license audit. Hands down, it's the best way to cut your Microsoft 365 costs.
- Go to https://www.gitbit.org.
- Click Get A Free License Audit.
- Sign in to your Microsoft 365 admin account.
- Approve the permissions.
- Review the report.
It really is that easy.
There are internal tools that can be found through the Microsoft 365 admin center as well. But then you need to dig through a handful of reports, sign-on logs, and possibly audit logs to find the same information.
Since IT environments are highly dynamic, employees are constantly joining, leaving, changing roles, and launching different projects, so the Microsoft 365 environment naturally accumulates a massive amount of "license bloat."
If you haven’t strictly audited your environment in the last six months, you are almost certainly paying a monthly "tax" to Microsoft.
To systematically clean up your tenant, you must audit five distinct layers of waste: unassigned licenses, disabled accounts, inactive accounts, and over-licensed accounts.
