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Home/Microsoft 365 Optimization

Stop Overpaying for Microsoft 365

Get more value from every Microsoft 365 dollar without hurting productivity. List prices rose on 1 July 2026, and Enterprise Agreement discounts have been getting tighter. Rythium pairs its own telemetry analytics with licensing experts. We help enterprise IT leaders remove waste, right-size every license and go into renewals with verified data.

14%Average license waste identified

Microsoft 365 list prices, per user per month
PlanBeforeFrom 1 July 2026
Microsoft 365 E3$36$39
Microsoft 365 E5$57$60
Microsoft 365 F3$8$10
Office 365 E3$23$26

Applied at each customer's next renewal. Actual contract prices vary.

Hidden waste in Microsoft 365

Where your Microsoft 365 budget goes

Microsoft 365 is hard to manage across thousands of users, hybrid environments and plan bundles that keep changing. Without a clear view of usage, spend drifts away from what people actually use. Waste usually hides in four places:

Inactive and orphaned licensesLeavers, contractors, dormant accounts and shared accounts that still cost you money every month.

Tier inflationUsers on E5 or E3 when E3, F3 or a Business plan covers everything they do day to day.

Unused premium add-onsMicrosoft 365 Copilot, Power BI Pro, Visio, Project and security add-ons bought in bulk but barely used. They carry some of the highest per-seat costs and are the hardest to see.

Capability overlapPaying for third-party security, backup, DLP, meeting or storage tools when your subscription already does the same job.

The cost of inaction: the renewal trap

Why waiting costs more than acting

Without governance and accurate usage data, costs keep growing. They peak at Enterprise Agreement (EA) and Cloud Solution Provider (CSP) renewals.

The price change makes right-sizing more valuable

Microsoft announced in December 2025 that commercial list prices for most Microsoft 365 and Office 365 suites would rise on 1 July 2026. The new prices apply at each customer's next renewal. Microsoft 365 E3 moves from $36 to $39 per user per month, and E5 from $57 to $60. F3 goes from $8 to $10, and Office 365 E3 from $23 to $26. That makes every seat you can right-size worth slightly more than before.

In practice, each 1,000 E5 users who only need E3 represent about $252,000 per year in list-price spend. Each 1,000 E3 users who could be on F3 represent about $348,000. At enterprise scale, these gaps add up fast.

What buying one tier too high costs: annual list cost per 1,000 users
Microsoft 365 F3$120K
Microsoft 365 E3$468K
Microsoft 365 E5$720K

E5 to E3 right-sizing: $252K saved per 1,000 users a year

Microsoft list prices from 1 July 2026; actual contract prices vary.

Four ways inaction compounds

Costs that creep upA few unassigned licenses here and some over-provisioned seats there add up across thousands of users, year after year.

Renewal price pressureRenewal proposals are often built on past consumption and growth assumptions. Without verified data, organizations commit to capacity they do not need, just to play it safe. Microsoft has also reduced volume-tier discounts on online services under EAs, so price and discount changes can stack on the same renewal.

Audit and true-up exposureIf you enter a true-up cycle without a clear view of your entitlements, you are open to unplanned financial liability.

Strained IT resourcesYour team spends hours pulling and cleaning spreadsheets instead of working on strategic projects.

Telemetry analytics and expert advice

How Rythium optimizes Microsoft 365

Our Microsoft 365 license optimization service replaces guesswork with data. Rythium's own analytics tools process raw Microsoft 365 telemetry at scale. Our licensing specialists then turn the findings into decisions you can defend.

  1. IngestSecure, read-only import of tenant telemetry
  2. AnalyzeUsage, login and feature activity against entitlements
  3. RationalizeTier right-sizing and third-party overlap
  4. NegotiateAudit-ready renewal pack and negotiating position

Outcome: a verified, defensible number for what your business actually needs to license.

Fast data processingOur tools securely load and read raw tenant telemetry. You get a complete view of how users really work and which features they adopt, in days, not weeks.

Usage and tier analysisWe compare feature usage, sign-in frequency and entitlements with Microsoft's plan matrix, so we can show which plan each user belongs on.

Removing overlapWe map your software stack and find third-party tools you can safely replace with features you already own.

Renewal readinessYou get detailed, audit-ready reports. Your team can go into an EA or CSP/NCE renewal knowing what to commit to and why, and can negotiate from facts.

How we right-size every user

Right-sizing does not mean cutting licenses across the board. We match each user's real behavior to the right plan. That protects productivity where it matters and removes cost where it does not.

User personaTypical usage signalRight-sized fit
Frontline and shift workersMobile and web only; light email and TeamsF1 / F3
Core knowledge workersDesktop apps, Teams, SharePointE3 (or Business plans)
Security and compliance power usersActive use of advanced Defender and Purview featuresE5, or E3 + add-ons
Dormant and departed accountsNo sign-in for 60 to 90+ daysReclaim or remove

Illustrative persona-based right-sizing. Thresholds are agreed with each client during the assessment.

What you receive

Every engagement ends with something your team can act on

Typical deliverables include:

License utilization reportA full view of assigned and actively used licenses, by plan, department, region and add-on.

Right-sizing recommendationsUser-level and group-level recommendations to move, reclaim or retire licenses, with the estimated annual impact.

Overlap and consolidation mapThird-party tools that duplicate features you already own, with a consolidation path rated for risk.

Renewal readiness packAn audit-ready entitlement baseline, scenario models for different commitment levels and talking points for the negotiation.

Executive summaryA short, board-ready summary of savings, risk and recommended actions.

Your renewal roadmap

Start 9 to 12 months before renewal

The best time to start is 9 to 12 months before renewal. That gives you time to reclaim licenses, retire overlapping tools and build a negotiating position backed by data. If you are already inside that window, we can still help. A focused assessment can run in a few weeks.

  1. 12 months beforeBaselineTelemetry ingestion, waste and tier analysis
  2. 9 months beforeRationalizeReclaim licenses, drop overlapping tools
  3. 6 months beforeForecastRight-sized commitment and scenario modeling
  4. 3 months beforeNegotiateAudit-ready pack, term and discount strategy
  5. RenewalCommit with confidenceOnly what you need
How an engagement works

A typical six-week assessment

  1. Weeks 1 to 2DiscoverScope, stakeholders, secure data connection
  2. Weeks 3 to 4AnalyzeTelemetry processing, findings workshop
  3. Weeks 5 to 6RecommendSavings roadmap, renewal strategy
  4. Ongoing, optionalGovernMonitoring, quarterly reviews

What we need from youExported tenant reporting data, a technical contact and a licensing or procurement contact.

What your team avoidsManual data processing, spreadsheet cleanup and a last-minute scramble before renewal.

What you decideEvery recommendation is yours to accept, adjust or reject. We do not change your tenant.

Expected outcomes and realistic ROI

Measurable value for enterprise IT

We aim for lasting, practical cost control, and we do not make unrealistic promises. Outcomes depend on your starting point, but they typically include:

A budget that matches real useOngoing license waste found and removed. The typical range is 10 to 25% of Microsoft 365 spend, based on Rythium engagements.

Faster answersFrom raw data to a report you can act on in 4 to 6 weeks, thanks to partly automated processing.

Stronger renewal negotiationsDecisions backed by data help you limit unnecessary increases and over-commitment.

Better security and complianceMore value from the security and management features you already pay for, with fewer redundant tools to manage.

Fewer surprisesA clear entitlement baseline ahead of any audit or true-up.

Illustrative savings model

Here is how the math can look for a hypothetical 5,000-user organization at list prices. These numbers are for illustration only. Actual savings depend on contract pricing and real usage.

LeverSeats affectedMonthly delta per seatAnnual impact
Reclaim inactive licenses (E3)200$39$93,600
Right-size E5 to E3500$21$126,000
Move frontline users from E3 to F3300$29$104,400
Total illustrative annual savings$324,000

List prices from 1 July 2026. Contract pricing, discounts and Microsoft's billing terms will change the final numbers.

Security and data handling

Your data stays protected

Our analysis uses tenant telemetry, so we treat data protection as part of the service itself.

Telemetry data onlyOur analysis uses reporting data. It does not read mailbox, file or chat content.

Encryption and storageData is encrypted in transit and at rest and stored in Azure.

Retention and deletionData is deleted 90 days after the engagement, or on request.

GovernanceNDA and DPA available on request.

No disruptionThe analysis runs on reporting data and does not affect users, network performance or daily operations.

Why choose Rythium

Independent expertise, backed by technology

Our own processing toolsSpecialized tools turn complex raw data into faster, cleaner and more reliable reports.

Independent advisoryRythium does not resell Microsoft licenses or earn commission on what you buy. Our recommendations aim to lower your total cost of ownership and match licenses to real business demand.

Licensing depthOur specialists know EA, CSP and NCE terms, plan bundles and add-on rules. They turn usage data into commercial decisions.

Minimal disruptionTelemetry analysis is built so that it does not affect user productivity or daily operations.

Who this is for

Frequently asked questions

How long does an assessment take?

A typical assessment takes about six weeks from data connection to final recommendations. If your renewal is close, we can run a focused version.

Will this disrupt our users or our tenant?

No. The analysis is based on reporting data, and we do not change your licenses or configuration. Every recommendation is yours to review and approve.

What data do you need, and is it secure?

We need read-only access to tenant reporting and licensing data. Or you can export the data yourself and send it to us. Data is encrypted in transit and at rest, and deleted 90 days after the engagement or on request.

How is this different from the reports in the Microsoft 365 admin center?

Admin center reports show you what is assigned and active. Rythium turns the raw data into plan-level recommendations, overlap analysis and renewal scenarios. That is the part that normally takes weeks of manual work.

We are an EA customer. Does this still apply?

Yes. EA renewals are where accurate data helps you most. We also support CSP and NCE environments.

Do you sell Microsoft licenses?

No. Rythium is independent, and our recommendations are not tied to or influenced by any license sale.

How do you charge?

We price each case as a fixed-fee assessment, a success-based fee or a hybrid, depending on the scope and the deliverables you need. Contact us for a scoped quote and tell us which you prefer.

Microsoft 365 licensing assessment

Take control of your Microsoft 365 spend

Tell our licensing specialists about your environment and renewal date. We will show you where spend is leaking and what a verified, right-sized baseline could look like.

Sheshagiri Anegondi
Sheshagiri AnegondiManaging Partner, Rythium. Former Vice-President, Oracle Corporation.
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