A company's IT costs rarely grow in one big step. A license is added for a new employee, a subscription for an app someone asked for, one more cloud space for files. After a few years nobody can say exactly what is paid for every month and which of it is still in use.
The good news is that the biggest unnecessary costs are usually found quickly and removed without risk. Below is where to look, how to do the review in one afternoon, and where you should not cut costs.
In short:
- Companies most often overpay for licenses of people who no longer work there and for services that duplicate each other.
- Old physical servers with low load can often be consolidated onto one.
- The review starts with a list: licenses, subscriptions, equipment and servers.
- Backups, protection, updates and two-factor sign-in are not the place to save.
Where the extra money goes
| Where | What is paid for unnecessarily | What to check |
|---|---|---|
| Microsoft 365 licenses | Accounts of former employees, a higher plan than needed, paid licenses for shared mailboxes | The list of licenses against the list of employees |
| Duplicate services | Two or three cloud file stores, two video meeting apps, a separate app for something your plan already includes | What exactly the plan you pay for includes |
| Software subscriptions | Apps nobody opens, automatic renewals, subscriptions on employees' personal cards | Invoices and bank statements for the last 12 months |
| Servers | Several old physical servers with low load, each with its own power, warranty and license | The load on each server and when its warranty ends |
| Cloud machines | Test or old virtual machines that are still running and still billed | Which machines are actually used |
| Equipment | Repairs of old computers that cost more than they are worth | The age and warranty of each computer |
| Downtime | Hours without work during an outage - the most expensive IT cost, and it never appears on an invoice | How often something stops and for how long |
Microsoft 365 licenses
This is where there is most often money to recover, because licenses are paid per user, every month.
- Former employees. The account stays active "just in case" and the license keeps being paid. The mailbox of a former employee can be converted into a shared mailbox: the emails stay available to colleagues and the license is freed. Shared mailboxes up to 50 GB do not need a license.
- A higher plan than needed. Not every employee needs the desktop apps or the top plan. Different people can be on different plans.
- Shared mailboxes with a paid license. Addresses such as office@ or info@ are often created as regular users and paid for.
- Monthly or annual commitment. A monthly commitment costs more than an annual one. For a stable number of employees the annual term usually works out cheaper, and the monthly term is useful only for temporary staff.
More on managing licenses in Microsoft 365 support for business.
Servers
Many companies have one server for each task: for the accounting software, for files, for email, for the cameras. Each was bought in a different year, each uses power and each needs maintenance.
When the load is low, these systems can run as virtual machines on one newer server. You then pay for one machine instead of several, and backup and recovery become easier. When this is worth it is covered in server virtualization for business.
Sometimes it is cheaper to move some systems to the cloud, sometimes the opposite. It depends on how much data you have, how often you use it and what downtime costs you. A comparison is in on-premise vs cloud infrastructure.
Equipment
Repairing a seven-year-old computer is rarely a good deal. Instead of replacing everything at once when something breaks, it is cheaper to have a schedule: which computers are replaced this year and which next year. For some workstations, refurbished brand-name computers with a warranty and a Windows license are a sensible choice.
An inventory of the equipment with the age and warranty of each device is the first step. See also managing company devices and what to do with computers on Windows 10.
The review in one afternoon
- Licenses. Export the list of users and licenses from the Microsoft 365 admin center and compare it with the list of employees.
- Subscriptions. Go through the invoices and bank statements for the last 12 months and write down every recurring amount for software and services.
- Equipment. Make a list of the computers, servers and network equipment with the year of purchase and the warranty.
- Servers and cloud. Write down what runs on each server and how loaded it is, and which cloud machines are being paid for.
- Decision. For each line: remove, consolidate or keep. A license or service is removed only after checking that the data is preserved.
Where you should not cut costs
Some costs look unnecessary until something happens. Do not remove:
- Backups and the check that recovery works. See backing up company data.
- Protection of the computers (antivirus or EDR) and updates.
- Two-factor sign-in for email and the cloud.
- The backup internet line, if work stops without internet. See internet connectivity with redundancy.
One ransomware attack or one lost day without data costs more than years of these expenses. More in ransomware protection for business.
How we do it
When we take over a new company, we first review the licenses, subscriptions, equipment and servers. That way it is clear from the start what is being paid for unnecessarily and what is risky.
After that, our clients see in the client portal an inventory of the supported equipment, its condition, the tickets and the invoices. So reviewing costs is not a one-off exercise but something that is visible every month. See what your IT provider should show you every month.
We work mainly on a monthly subscription per computer, so the cost of support is predictable. What it includes and what the price depends on is in how much an external IT department costs.
Frequently asked questions
How much can a company save on IT costs?
It depends on when the last review was done. The money for unused licenses and duplicate services comes back fastest, because they can be removed straight away and without risk.
Which Microsoft 365 licenses are most often paid for unnecessarily?
Licenses of former employees, paid licenses on shared mailboxes such as office@, and higher plans for people who only use email and files.
Is the cloud cheaper than our own server?
Not always. The cloud saves the purchase and maintenance of hardware, but it is paid every month. With a lot of data and constant use, your own server sometimes works out cheaper. The decision depends on the specific systems.
Should we replace all old computers at once?
No. It is cheaper to have a replacement schedule by year, according to the age and role of each computer. Only the ones that cannot run securely are replaced at once.
How often should we do this review?
At least once a year and with every bigger change: new employees, people leaving, an office move or a change of provider.
Let's talk about your needs and we will offer you the best solution and price.
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