Microsoft 365
You’re paying for Microsoft 365 seats nobody uses — how Australian SMBs find the waste in 20 minutes
8 September 2026
Most Australian SMBs I talk to are convinced their Microsoft bill is “just what it costs.” Then we open Billing → Licenses and find seats for people who left last year, Premium on accounts that never open Excel, and a pile of purchased-but-unassigned licences earning nothing.
I help SMBs get their money’s worth from Microsoft without a vendor pitch. Here’s the 20-minute waste find I actually run. Paths match Microsoft Learn as of writing. AUD list prices move — re-check microsoft.com/en-au before you quote a number to your board. Not legal advice.
The quiet cost: seats that outlive people
Licence waste is rarely one dramatic mistake. It’s incomplete offboarding, inactive accounts still licensed, the wrong SKU for the role, the same person licensed twice (direct + group), and seats you bought “just in case” that never got assigned.
Microsoft’s own usage reports exist specifically so you can see who barely touches a service and might not need an M365 licence. There isn’t a single “unused licences” button — you assemble the picture from a few admin screens.
Why Australian SMBs over-license
- Someone left; the account stayed
- A project bought Premium for everyone; only three people used it
- Shared mailboxes and guests get confused with paid seats
- Nobody owns a monthly licence hygiene habit
That’s fixable in a short sitting if you stay disciplined about false positives.
What you can see in 20 minutes
| Minutes | Step | Do |
|---|---|---|
| 0–3 | Seat inventory | Billing → Licenses — assigned vs available per product |
| 3–5 | Privacy gate (optional) | If policy allows: Settings → Org settings → Services → Reports — clear conceal user names (Global Admin; this is audited) |
| 5–10 | Workload inactivity | Reports → Usage → Microsoft 365 apps → Active users → 90 or 180 days → Export CSV |
| 10–13 | Desktop waste | Same report area → Activations → Export; flag never-activated |
| 13–17 | Sign-in staleness | entra.microsoft.com → Entra ID → Users → add Last interactive sign-in time → filter roughly ≤ 90 days |
| 17–19 | Who holds seats | Users → Active users → Licenses and apps; check group vs direct assign and Errors & issues |
| 19–20 | Rough dollar figure | Candidate seats × AU list $/user/month × 12 = indicative annual waste (not your invoice) |
Usage reports often lag 24–72 hours. The Entra last-sign-in tile can lag about a day. Graph signInActivity needs Entra ID P1/P2 — don’t assume every SMB tenant has the fancy inactive-users automation.
Turn the shortlist into dollars (carefully)
Public AU list prices (GST excl., paid yearly, ~2026-09-08 snippets — re-verify at publish):
- Business Basic — about AU$9.00 / user / month
- Business Standard — about AU$18.70 (pages sometimes show other figures; treat as volatile)
- Business Premium — about AU$32.90 / user / month
Example framing only: five unused Standard seats × $18.70 × 12 ≈ AU$1,122/year excl. GST at public list. Partner/CSP pricing and annual commitments can mean unassigning today doesn’t cut the bill until the next renewal window. Unassigning a user is not the same as reducing seat count on Your products — do both when you mean to stop paying.
Don’t reclaim these yet
- Seasonal staff or people on leave
- Shared mailboxes (they can sit unlicensed up to the normal shared limit — convert before you strip a user who still needs the mailbox)
- Guest accounts (usually no paid seat)
- Accounts with mail forwarding you still need
- Hybrid identities (delete in on-prem AD too, or you’ll recreate the mess)
Sign-in staleness ≠ “never uses Outlook.” Cross-check the usage export before you yank Premium off your quiet bookkeeper.
Safe clean-up order
- Block sign-in
- Preserve — convert to shared mailbox before unassign if the email address must live
- Unassign the licence
- Reduce seats on Your products (watch CSP / annual commitment rules)
- Delete the account only when that’s actually appropriate
Rushing straight to delete is how you lose mail you still needed for a dispute or a customer thread.
When a Licence & Waste Review beats DIY
If you’ve got more than a handful of SKUs, nested groups, or a CSP contract you don’t fully understand, a fixed-scope review is usually cheaper than guessing. That’s one of the engagements I run for Australian SMBs: what you’re paying for, what you actually use, and a plain-English list of seats to reclaim — without a 60-page report.
Twenty minutes gets you the shortlist. The point is to stop funding ghost seats every month.