The three kinds of licence waste, the signal that tells them apart, and the seven-day rule that decides whether a finding ever becomes money.
Reclaiming Microsoft 365 licences means removing or downgrading seats that are paid for but not used. Three things are usually confused under one heading: licences assigned to nobody, licences on dormant accounts, and licences on active people who use nothing that justifies their tier. They need different evidence and they carry different amounts of money — and none of them turns into a saving unless the change lands inside the window where the quantity can still be reduced.
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They look identical on an invoice. They need completely different evidence.
Purchased, sitting in the tenant, assigned to nobody. The only one that needs no evidence beyond the licence count itself — and the only one nobody argues about.
A licence on an account nobody uses: a leaver whose account was disabled but never unlicensed, a service account, a contractor whose project ended. Needs sign-in and workload evidence over a defined window.
The expensive one, and the one that gets missed. A person signs in every day, uses Outlook and Teams, and holds an E5. They are active by every simple measure. What they are not is an E5 user.
The easiest signal to collect is the one that hides the expensive category.
| Signal | What it tells you | What it misses |
|---|---|---|
| Last sign-in | Whether the account is alive | Everything about which services are used. An active sign-in proves nothing about an E5 entitlement. |
| Per-workload activity | Whether Exchange, Teams, SharePoint, OneDrive are actually used | The premium components. Someone can use all four and still touch nothing that E5 adds over E3. |
| Per-service-plan usage | Whether the components you are paying extra for are used at all | Nothing relevant to the decision — this is the level a tier change has to be argued at. |
A reclaim report built on sign-in alone finds the cheap category and declares victory. The seats worth the most are held by people who are unmistakably active — and who have never opened a single component their tier is priced for.
Under the New Commerce Experience a subscription quantity can only be reduced within seven days of a purchase, a renewal or a mid-term addition. Outside that window the seat count is fixed until the term ends. This single rule reorders the whole exercise: the work is not to discover waste, it is to have the evidence finished and signed off before a renewal date that is known months in advance. An estate audited two weeks after renewal has found exactly the same waste and can act on none of it for a year.
Per-user, per-service evidence — ready before your renewal date, not after it.