Overview Of Right-Sizing Microsoft 365

Written by John Gruber Published Mar 26, 2026 Updated Mar 26, 2026

Right-sizing is the strategic, proactive process of aligning an organization's user accounts to its actual needs in Microsoft 365. It's when a user has a Microsoft 365 E5 license and all they use is a basic Exchange mailbox so you downgrade their license to an Exchange Online Plan 2 license.

Right-sizing a user's license is critical to getting the most value for your customers from Microsoft 365. Why should your customers pay for a Microsoft 365 E5 if all they need is an Exchange Online Plan 2 license?

That being said there are two main parts of a Microsoft 365 license:

1. The Apps
2. The Management & Security

The apps are much easier to tell when a user is using or losing. As a matter of fact, there are 26 main apps in Microsoft 365 but only 5 main apps that most users use:

1. Exchange mailbox
2. Office apps on Windows or Mac
3. Microsoft Teams
4. Microsoft OneDrive
5. Microsoft SharePoint

If a user loses an app they actively use, they'll immediately know and inform IT which is an easy fix.

The management & security piece is much harder to detect.

1. Office desktop apps
2. OneDrive storage shrinks
3. Exchange mailbox shrinks
4. Exchange archive mailbox
5. Exchange unlimited archiving
6. Advanced Threat Protection
7. Conditional Access Policies
8. Advanced identity governance
9. Automated investigation & response
10. Microsoft Intune
11. Advanced eDiscovery (eDiscovery Premium)
12. Litigation hold capabilities
13. Phone System / Calling Plan capabilities
14. Compliance recording
15. Teams webinar
16. Windows 11 Business
17. Advanced Power BI integration
18. Viva suite features
19. Information Protection add‑ons

Because there are so many pieces, many of which need to be manually checked it's best to sell your customers on right-sizing after you and your team have access to their environment. If you're meeting with a prospective customer inform them of the money you can save them by removing licenses from disabled and user's that haven't logged in up front and explain with admin access you can right-size their users much better.