Microsoft 365 licensing is built in layers. The base license (E1, E3, E5) provides the foundation. Add-ons extend it — security features, telephony, analytics, project management, diagramming. Each add-on carries a separate monthly per-user charge, layered on top of the base license.
The add-on economy is where organizations consistently overspend. Base license purchases are visible: they show up in procurement conversations, get reviewed at renewal, and appear clearly on Microsoft invoices. Add-ons are often purchased in response to a specific request (“the project team needs Project Online”), provisioned quickly, and then never revisited. The requester moves on, the project ends, and the add-on keeps billing.
A systematic add-on audit consistently surfaces 15 to 30 percent of add-on spend as reclaimable — licenses assigned to users who have not used the add-on in 90+ days or who were provisioned it as a matter of convenience rather than demonstrated need.
Microsoft Project: the most common overspend
Microsoft Project Plan 3 at $30/user/month is the add-on most frequently purchased for a subset of users and then gradually over-provisioned. The pattern is familiar: a specific team needs Project for a major initiative. IT provisions it. The initiative ends. The licenses aren’t revoked because “we might need it again.” The next team asks for it, gets provisioned, and the cycle repeats.
Project utilization is directly measurable through the Microsoft 365 Admin Center’s App Usage reports and through Graph. The relevant metric is active Project users in the last 30 days. In most tenants, the gap between provisioned Project licenses and users who have opened Project in the last 30 days is 40 to 60 percent.
At $30/user/month, a 50-seat Project deployment with 40 percent inactive is $7,200 per year in waste. That is a meaningful number for what is typically a niche productivity tool.
Visio: diagram software with a 20% adoption rate
Visio Plan 2 at $28/user/month is the most extreme underutilization case in the Microsoft 365 add-on portfolio. Visio is specialized diagramming software. It is genuinely valuable for network architects, process designers, and technical documentation teams. It is not a tool most knowledge workers need, and yet it is commonly provisioned broadly when organizations move to Microsoft 365 because “it used to be on the shared software server.”
The Microsoft 365 Admin Center’s Visio usage report will typically show that 70 to 80 percent of provisioned Visio seats have no activity in any given 30-day period. This is not a platform failure — it is a provisioning decision that was never revisited.
The correct license for users who occasionally need to view (not create) Visio diagrams is nothing — Visio files can be viewed in the browser with no license required. Only users who actively create or edit diagrams need the Plan 2 add-on.
Audio Conferencing: the dial-in add-on in a Teams-first world
Audio Conferencing ($4/user/month) adds PSTN dial-in numbers to Teams meetings — the ability for participants to join by phone rather than through the Teams app. When organizations first adopted Teams, this was considered essential because not every meeting participant had reliable internet access or a Teams-capable device.
In most organizations today, the majority of meetings are attended via the Teams app or Teams Rooms hardware. The percentage of participants who actually dial in via PSTN is typically well under 20 percent of meetings, and within that, the participants who dial in are often external parties who don’t need the host organization’s Audio Conferencing license at all — they can dial in from any phone.
The right question for Audio Conferencing is not “should we have it?” but “how many hosts actually run meetings where dial-in occurs?” That is the population that needs the license. Provisioning it for everyone because some executives occasionally have callers who prefer phone is a common pattern and a consistent source of waste.
Microsoft’s Teams admin center and the Call Quality Dashboard provide call log data that makes Audio Conferencing utilization measurable. Users who have never hosted a PSTN-joined meeting are the reclamation population.
Power BI Pro: the analytics license everyone was given
Power BI Pro at $10/user/month is the most widely over-provisioned analytics license in Microsoft’s portfolio. The typical deployment scenario: a data team builds dashboards in Power BI and shares them with the organization. For sharing to work, recipients need Power BI Pro (unless the workspace is on Premium capacity). So IT provisions Pro for everyone who needs to see a report.
Over time, the set of people who were originally given Power BI Pro for a specific report grows stale. The report becomes less relevant, the project ends, the analytics initiative pivots. The Pro licenses stay.
Power BI has a built-in usage report in the Admin Portal that shows active users per month. The contrast between licensed Pro users and users who have actually opened a report in the last 30 days is often striking.
A useful alternative structure: Power BI Premium Per User ($20/month) is appropriate for analysts who create and publish content. Pro ($10/month) is appropriate for active consumers. Viewers who access only embedded reports in other applications may not need a Pro license at all if the workspace is on Premium Per Capacity.
The add-on audit workflow
The structured approach to add-on auditing covers three steps:
Step 1: Inventory. Pull a complete list of add-on license assignments from Microsoft 365 Admin Center > Billing > Licenses. Capture product name, quantity assigned, cost per unit, and total monthly spend. This is the cost baseline.
Step 2: Utilization check. For each add-on, pull the activity report from the Microsoft 365 Admin Center (Usage Reports > specific product) or Graph. Identify users with zero activity in the last 30 and 90 days separately.
Step 3: Reclamation. Route the 90-day inactive list to department managers with a two-week window to confirm need. Remove licenses for non-confirmed users. Establish a “request-on-demand” model for high-cost, low-utilization add-ons like Project and Visio — rather than provisioning broadly, provision only when a specific use case is documented and revoke after the use case is complete.
The recurring cadence matters as much as the one-time audit. Add-ons that are not in a regular review cycle will accumulate waste again within 12 months. The most efficient model is a semi-annual review tied to the Microsoft agreement renewal calendar — build the audit into the process that already happens rather than treating it as a separate program.