Microsoft's licensing structure for both Microsoft 365 and Azure has grown wide enough — tiers, add-ons, bundled and unbundled features, consumption-based and committed pricing — that most organizations are not intentionally choosing their current spend level so much as accumulating it through incremental decisions made at different times by different people. That accumulation is where the overspend consistently hides.
It's common to find an entire organization licensed at E5 (the highest, most expensive tier) when only a subset of users — those needing advanced security or compliance features — actually require it, while the rest would be fully served by E3.
Add-on licenses purchased for a specific project or team frequently outlive the need but not the billing — nobody's job is to periodically ask whether every add-on is still being used.
Departed employees, duplicate accounts, and service accounts licensed at full user rates rather than a lower-cost tier are a recurring, easy-to-miss source of waste, especially in organizations without a tight offboarding process tied to license reclamation.
Departments purchasing licenses independently, outside a negotiated enterprise agreement, typically pay list price for something that could have been consolidated into better-negotiated volume pricing.
Stable, predictable workloads left on pay-as-you-go pricing instead of reserved capacity or savings-plan commitments routinely cost meaningfully more than the same usage under a committed pricing model.
Storage, virtual machines, and other resources left running after a project ends are a common and often-overlooked cost — cloud spend doesn't stop just because the project that created it did.
Instances sized for peak or worst-case load, running at that size continuously rather than scaling with actual demand, are one of the more straightforward optimization opportunities once actual utilization is measured.
IT teams are generally focused on keeping systems running, not auditing every SKU against actual usage across a sprawling licensing catalog — and the vendor relationship itself has no incentive to flag over-licensing. A structured, independent review comparing actual usage against contracted licensing is the most reliable way to find this, and it's part of the technology reality assessment MALA runs for clients. Talk to an advisor about reviewing your current Microsoft spend.