“M365 License Cost Savings: Unused Licenses and Where to Cut”
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M365 License Cost Savings: Unused Licenses and Where to Cut

Which licenses are paid for but never assigned, how much they cost per year, and where to start reducing. Generated by AI via Proxuma Power BI MCP server.

Built from: Microsoft Partner Center
How this report was made
1
Autotask PSA
Multiple data sources combined
2
Proxuma Power BI
Pre-built MSP semantic model, 50+ measures
3
AI via MCP
Claude or ChatGPT writes DAX queries, executes them, formats output
4
This Report
KPIs, breakdowns, trends, recommendations
Ready in < 15 min

M365 License Cost Savings: Unused Licenses and Where to Cut

Which licenses are paid for but never assigned, how much they cost per year, and where to start reducing. Generated by AI via Proxuma Power BI MCP server.

The data covers the full scope of Autotask PSA records relevant to this analysis, broken down by the key dimensions your team needs for day-to-day decisions and client reporting.

Who should use this: MSP owners, finance leads, and operations managers tracking profitability

How often: Monthly for financial reviews, quarterly for strategic planning, on-demand for pricing decisions

Time saved
Building financial reports from PSA exports and spreadsheets is a full day of work. This report delivers it in minutes.
Margin visibility
Revenue numbers alone do not tell the story. This report connects revenue to cost for true profitability.
Pricing intelligence
Data-driven evidence for pricing adjustments, contract negotiations, and resource allocation.
Report categoryFinancial & Revenue
Data sourceAutotask PSA · Datto RMM · Datto Backup · Microsoft 365 · SmileBack · HubSpot · IT Glue
RefreshReal-time via Power BI
Generation timeUnder 15 minutes
AI requiredClaude, ChatGPT or Copilot
AudienceMSP owners, finance leads
Where to find this in Proxuma
Power BI › Financial › M365 License Cost Savings: Unused Lic...
What you can measure in this report
Summary Metrics
License Waste Ranking — The Answer
Office 365 E1 Deep Dive — Largest Single Saving
Well-Utilized Licenses — What Is Working
Savings Waterfall — Prioritized from Biggest to Smallest
Analysis
What Should You Do With This Data?
Frequently Asked Questions
EST. ANNUAL SAVINGS
O365 E1 WASTE
SKUS FLAGGED
TOTAL PAID SKUS
AI-Generated Power BI Report
M365 License Cost Savings:
Unused Licenses and Where to Cut

Which licenses are paid for but never assigned, how much they cost per year, and where to start reducing. Generated by AI via Proxuma Power BI MCP server.

Demo Report: This report uses synthetic data to demonstrate AI-generated insights from Proxuma Power BI. The structure, DAX queries, and analysis reflect real MSP data patterns.
1.0 Summary Metrics
EST. ANNUAL SAVINGS
$50,580
Recoverable from 6 over-provisioned SKUs
O365 E1 WASTE
303
76.1% unused — all 398 in WARNING
SKUS FLAGGED
6
30%+ waste rate per SKU
TOTAL PAID SKUS
134
256,186 total · 4,118 consumed
View DAX Query — Summary Metrics
EVALUATE
ROW(
    "TotalPaidSKUs", COUNTROWS(
        FILTER('BI_MicrosoftPartnerCenter_Subscribed_Skus',
            [prepaid_units_enabled] > 0)),
    "TotalLicenses", SUM('BI_MicrosoftPartnerCenter_Subscribed_Skus'[prepaid_units_enabled]),
    "TotalConsumed", SUM('BI_MicrosoftPartnerCenter_Subscribed_Skus'[consumed_units]),
    "TotalAvailable", SUM('BI_MicrosoftPartnerCenter_Subscribed_Skus'[prepaid_units_enabled])
        - SUM('BI_MicrosoftPartnerCenter_Subscribed_Skus'[consumed_units])
)
What are these DAX queries? DAX (Data Analysis Expressions) is the formula language used by Power BI to query data. Each “View DAX Query” section shows the exact query the AI wrote and executed. You can copy any query and run it in Power BI Desktop against your own dataset.
2.0 License Waste Ranking — The Answer

All SKUs with 30%+ waste, ranked by estimated annual cost of unused licenses

MetricValue
Consumed4,217
Active3,255,762
Available3,252,013
Total Estimated Annual Savings $50,580
View DAX Query — License Waste per SKU
EVALUATE ROW("Consumed", SUM('BI_MicrosoftPartnerCenter_Subscribed_Skus'[consumed_units]), "Active", SUM('BI_MicrosoftPartnerCenter_Subscribed_Skus'[active_units]), "Available", SUM('BI_MicrosoftPartnerCenter_Subscribed_Skus'[available_units]))
3.0 Office 365 E1 Deep Dive — Largest Single Saving

All 398 Office 365 E1 licenses are in WARNING state. 303 are unused. This is the single biggest cost recovery opportunity in the tenant.

TOTAL E1 LICENSES
398
All 398 in WARNING state
CONSUMED
95
23.9% utilization rate
ANNUAL WASTE
$18,180
303 seats × $5/mo × 12

The WARNING status on all 398 E1 licenses means Microsoft has flagged this subscription. This typically happens when a subscription is past its renewal date, has a billing issue, or the seat count does not match the agreement. Regardless of the cause, you are paying for 398 seats and using 95.

At $5 per user per month, the 303 unused seats cost $1,515 per month, or $18,180 per year. If these licenses were right-sized to 100 seats (leaving a 5-seat buffer), the annual cost would drop from $23,880 to $6,000.

View DAX Query — Office 365 E1 Detail
EVALUATE
SELECTCOLUMNS(
    FILTER('BI_MicrosoftPartnerCenter_Subscribed_Skus',
        CONTAINSSTRING([display_name], "Office 365 E1")),
    "sku_name", [display_name],
    "total", [prepaid_units_enabled],
    "consumed", [consumed_units],
    "available", [prepaid_units_enabled] - [consumed_units],
    "warning", [prepaid_units_warning],
    "suspended", [prepaid_units_suspended]
)
4.0 Well-Utilized Licenses — What Is Working

SKUs with less than 2% waste. These are correctly sized and need no action.

LicenseTotalConsumedWaste %Status
Microsoft 365 Copilot 13 13 0% Fully utilized
Teams Premium 10 10 0% Fully utilized
Viva Suite 53 53 0% Fully utilized
D365 Team Members 30 30 0% Fully utilized
Microsoft 365 E3 1,176 1,162 1.2% Healthy buffer
Microsoft 365 F3 612 603 1.5% Healthy buffer
View DAX Query — Well-Utilized SKUs
EVALUATE
SELECTCOLUMNS(
    FILTER('BI_MicrosoftPartnerCenter_Subscribed_Skus',
        [prepaid_units_enabled] > 0
        && DIVIDE([prepaid_units_enabled] - [consumed_units],
            [prepaid_units_enabled]) < 0.02),
    "sku_name", [display_name],
    "total", [prepaid_units_enabled],
    "consumed", [consumed_units],
    "waste_pct", DIVIDE([prepaid_units_enabled] - [consumed_units],
        [prepaid_units_enabled])
)
ORDER BY [consumed] DESC
5.0 Savings Waterfall — Prioritized from Biggest to Smallest

Where to focus first. The top two SKUs account for 68% of the total recoverable spend.

Office 365 E1
$18,180/yr
76.1% waste
D365 CE Plan
$16,200/yr
30.0% waste
Entra ID P2
$5,400/yr
36.0% waste
Defender P2
$4,440/yr
37.0% waste
Power BI PPU
$4,200/yr
35.0% waste
Teams EEA
$2,160/yr
36.0% waste
6.0 Analysis

The tenant has 134 paid SKUs covering 256,186 total license seats, of which only 4,118 are consumed. The bulk of that gap comes from a handful of SKUs with high seat counts and low utilization. Six SKUs alone account for an estimated $50,580 in annual waste.

Office 365 E1 is the worst offender. All 398 licenses are in WARNING state, and only 95 are consumed. The 76.1% waste rate at $5 per seat per month means $18,180 is spent every year on licenses nobody uses. The WARNING flag adds urgency: Microsoft may suspend or convert these licenses if the billing issue behind the warning is not resolved.

Dynamics 365 Customer Engagement is the second-largest savings target. At $90 per user per month, even 15 unused seats translate to $16,200 per year. High per-seat costs make D365 a priority: every unused seat costs eighteen times more than an unused E1 seat.

The security and identity SKUs (Entra ID P2 and Defender P2) both sit around 36% waste with 36-37 unused seats each. These licenses are often provisioned in batches of 100 during a security project and never scaled back afterward. A reduction to 70 seats each would save $9,840 combined while keeping a comfortable buffer.

On the positive side, Microsoft 365 Copilot, Teams Premium, Viva Suite, and D365 Team Members are all at 0% waste. M365 E3 and F3 have under 2% waste, which represents a healthy buffer for new hires. These SKUs need no action.

7.0 What Should You Do With This Data?

5 priorities based on the findings above

1

Resolve the Office 365 E1 WARNING state immediately

All 398 E1 licenses are in WARNING. Check the Microsoft 365 admin center for billing alerts, expired payment methods, or subscription mismatches. Once the billing issue is cleared, reduce the seat count from 398 to 100 (95 consumed + 5 buffer). Estimated savings: $17,880 per year.

2

Audit Dynamics 365 CE Plan assignments

Pull the list of 35 assigned users and verify each one still needs a full CE Plan license. Some may have moved to roles that only require a D365 Team Member license ($8/mo vs. $90/mo). Reducing from 50 to 38 seats saves $12,960 per year, and migrating any misassigned users to Team Members saves even more.

3

Right-size Entra ID P2 and Defender P2 to 70 seats each

Both SKUs were likely provisioned at 100 as round numbers during an initial security deployment. Current consumption is 64 and 63 respectively. Reducing to 70 seats each recovers $9,840 per year while maintaining a buffer for growth. Review again at next quarter.

4

Reduce Power BI Premium Per User and Teams EEA to 70 seats each

Power BI PPU has 65 active users out of 100 seats. Teams EEA has 64. Both can drop to 70 without risk, saving $6,360 combined. Set a calendar reminder to reassess in 90 days, especially if new hires are expected.

5

Establish a monthly license review cadence

License waste accumulates silently. Schedule this report to run monthly, ideally the week before any renewal conversations. Track the waste percentage trend over time. A well-managed tenant keeps waste under 5% across all major SKUs. The six fully-utilized SKUs in this report prove it is achievable.

8.0 Frequently Asked Questions
Where does the license data come from?

Proxuma Power BI connects to the Microsoft Partner Center API and pulls the Subscribed SKUs table. This table contains every license SKU in the tenant, including the number of prepaid (enabled) units, consumed units, warning units, and suspended units. The AI then runs DAX queries to calculate waste percentages and estimate costs.

How are the annual savings estimated?

The formula is: (unused seats) x (list price per user per month) x 12. List prices come from Microsoft's public pricing pages (March 2026). Actual savings depend on your agreement type (CSP, EA, NCE) and any negotiated discounts. The estimates here represent the upper bound based on list prices.

What does WARNING state mean for a license?

WARNING in the Microsoft Partner Center means the subscription has a pending issue. This could be an expired payment method, a renewal failure, or a seat count mismatch with the billing agreement. Licenses in WARNING state still function, but Microsoft may disable or suspend them if the issue is not resolved within the grace period.

Can I reduce licenses mid-term on an annual commitment?

It depends on your agreement. CSP monthly subscriptions can be adjusted anytime. Annual NCE commitments are locked for the term but can be reduced at renewal. Enterprise Agreements (EA) may allow true-ups. Check with your Microsoft distributor or licensing partner for your specific terms. Either way, this report gives you the data you need to plan ahead.

Can I run this report against my own tenant?

Yes. Connect Proxuma Power BI to your Microsoft Partner Center account, add an AI tool (Claude, ChatGPT, or Copilot) via MCP, and ask the same question. The AI writes the DAX queries, runs them against your real license data, and produces a report like this in under fifteen minutes.

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