Find Unused Microsoft 365 Copilot Licenses
How to Identify and Reclaim Unused Microsoft 365 Copilot Licenses
If you’re utilising Microsoft 365 Copilot, it’s essential to know how licensing works to avoid unnecessary costs. With Microsoft 365 Copilot billing per seat annually, you could be paying for licenses that nobody uses. For instance, at an enterprise list price of £30 per user per month based on an annual commitment, each license costs £360. If you’re part of a smaller organisation with 300 or fewer users, the Copilot Business option is priced at £21 per seat. Due to the way licenses are structured, it’s easy to end up paying for unused seats. A recent survey by Gartner revealed that merely 5% of organisations completing their pilot programme proceeded to larger deployments, indicating potential waste in licensing. This guide aims to help you identify those unused licenses using Microsoft tools and provide practical steps for reclaiming them.
Understanding Unused Copilot Licenses
Unused Microsoft 365 Copilot licenses can be categorised into two main types: licenses that were purchased but never assigned, and those assigned to users who aren’t actively using Copilot. Understanding these distinctions is vital for effective license management.
Identifying Unused Licenses
- Log in to the Microsoft 365 admin centre.
- Navigate to Billing > Licenses, where you can view the gap between purchased and assigned licenses.
- Access Reports > Usage > Microsoft 365 Copilot to see user activity.
One critical tip: ensure that user names are visible in reports. By default, Microsoft conceals user data to comply with privacy regulations. To change this, go to Settings > Org Settings > Services and uncheck “Display concealed user, group, and site names in all reports.” Remember, you need to be a Global Administrator, and it can take up to 72 hours for changes to reflect.
Types of Unused Licenses
| Seat State | What it Looks Like | Where to Check | Recommended Action |
|---|---|---|---|
| Purchased but Never Assigned | Purchased count exceeds assigned count | Billing > Licenses | Assign from the waitlist or plan to cut at renewal |
| Assigned but Never Used | No activity recorded | Copilot usage report | Confirm assignment date, consider reclaiming |
| Assigned but Inactive | Last activity older than your defined threshold | Copilot usage report | Notify user and manager, reclaim after grace period |
| Held by Disabled Accounts | Block sign-in in Entra ID | Entra ID users list | Reclaim immediately |
| Barely Used | Activity only in one app | Per-app last activity columns | Provide training, reclaim if no improvement |
Steps to Identify and Reclaim Unused Licenses
Step 1: Compare Purchased and Assigned Seats
Go to the Billing section as described earlier to check how many licenses you’ve purchased versus what has been assigned. This helps you spot unassigned licenses you’re paying for.
Step 2: Check User Activity
In the Reports section, examine the user activity. Focus on the “last activity” date to identify users who may be inactive or using Copilot minimally.
Step 3: Export User Data
Export the user activity table to CSV and sort by “last activity” to filter out users with no recent engagement. This will allow you to categorise users based on their activity effectively.
Automating the Process Using Microsoft Graph or PowerShell
If you frequently perform these tasks, consider automating the process using PowerShell in conjunction with Microsoft Graph APIs. This can streamline your ability to extract both purchased and usage data without manual intervention.
PowerShell Script to Identify Usage
Use the following snippet to check for unused licenses:
Connect-MgGraph -Scopes "Reports.Read.All","Organization.Read.All"
# Retrieve purchased versus assigned seats
Get-MgSubscribedSku | Where-Object SkuPartNumber -like "*Copilot*" | Select-Object SkuPartNumber,@{n='Purchased';e={$_.PrepaidUnits.Enabled}}, ConsumedUnits
Avoiding False Positives
Before reclaiming a license, ensure that you have verified the following:
- The user has held the license longer than your inactivity threshold.
- Check if the account is still enabled in Entra ID.
- Ensure communication has been made with the user and their manager regarding the potential reclaim.
Removing and Reassigning Copilot Licenses
When it’s time to remove a license, check if it was assigned directly or inherited from a group. Reassigning requires different methods depending on how the license was assigned.
Notify Before Reclaiming
Always notify the user and their management about the pending reclamation. Provide a grace period to allow them to respond or justify the license retention.
Understanding Billing Implications
Reclaiming a license itself does not reduce your current bill; it merely frees the seat for future use. Actual invoice reductions occur only during the renewal window when you can adjust your licensing count.
Regular Review Schedule
Establish a routine review schedule to audit Copilot license usage. Monthly checks paired with quarterly in-depth reviews offer a structured approach to identify unused licenses effectively.
Conclusion
Monitoring and managing your Microsoft 365 Copilot licenses is crucial for optimising expenses and ensuring that your organisation is utilising its resources effectively. By following the steps outlined in this guide, you’re on the right track to reclaim unnecessary costs, encourage active usage, and maintain a streamlined licensing environment.
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