Microsoft 365 License Quotas

In multi-department organizations, adopting Microsoft 365 often leads to challenges in license management. Departments can unintentionally exceed their allocated share of licenses, resulting in inefficiencies and internal conflicts. Microsoft's built-in license management tools operate only at the tenant level, allowing administrators unrestricted access to assign or revoke any licenses across the organization. This limitation creates several key issues:

1. Lack of Segmentation: Licenses cannot be divided and assigned to specific groups, departments, or administrators.

2. Overuse and Underuse: One group may consume more licenses than their allocated share, while another may underutilize theirs.

3. Limited Reporting and Billing: Native tools provide minimal functionality for license reporting or implementing chargeback billing to hold departments accountable.

Role of License Quotas

License Quotas serve as an essential tool to enforce departmental control over Microsoft 365 license assignments. By leveraging Administrative Units, organizations can allocate license quotas to departments, ensuring equitable distribution and preventing misuse.

1. Configure Administrative Units (AUs): Set up an AU for each department or business unit within the organization.

2. Define License Quotas: Assign specific quotas to each AU to limit the number of licenses available to that department.

3. Monitor Usage: Regularly review license usage across departments to identify trends of overuse or underuse.

Benefits

• Controlled License Distribution: Prevents departments from exceeding their allocated licenses.

• Enhanced Visibility: Offers insights into how licenses are consumed across different parts of the organization.

• Accountability: Enables chargeback billing and reporting, promoting responsible usage by local IT teams.

By implementing License Quotas with Administrative Units, organizations can optimize their license management, reduce waste, and maintain a balanced license allocation across departments. This approach ensures that every department has access to the resources they need without compromising the organization’s overall license availability.

Microsoft 365 License Quotas Configuration

You can enable license quotas on each Administrative Unit that has AD Users or Microsoft 365 Active Users web query. Here is the step-by-step instruction on how to configure Microsoft 365 license quotas for AD Users web query:

1. In the Cayosoft Administrator console, navigate to the AD Users web query.

2. Expand the Office 365 License Quota section.

3. Select the Enable quota management checkbox.

4. For each license in the list for which you want to enable quota set the license Price and select Behavior:

   • Report assigned license only - selecting this option, you will get the information in the Assigned column on how many licenses are assigned to the users in this Administrative Unit. The Web Portal won't enforce any restrictions on assigning new licenses to users in this Administrative Unit.

   • Report overuse quota - if you select this option, you also need to set the Quota Limit values in the corresponding column. The Microsoft 365 License Quota Report will count how many licenses are assigned within the AD Users web query and if there is any overuse. The Web Portal won't enforce any restrictions on assigning new licenses to users in this Administrative Unit.

   • Report and enforce quota - this option also requires setting a quota limit. In this case, Web Portal will prevent assigning new licenses to users if the number of assigned licenses reached the quota limit. Also, you will see the number of assigned/overused licenses in the Microsoft 365 License Quota Report. You can also specify the custom message in the Enforcement message column. The message will appear on New User > Assign License form in the Web Portal when trying to assign a new license above the quota limit number.

   • Licensing quota notification contacts - that is the list of contacts that will receive the Microsoft 365 License Quota Report. If you want to specify several emails, you can separate them by ";".

5. After you configure Microsoft 365 License Quota section for all required web queries in all Administrative Units, you need to run the rule Analytics collection | Quota Information. This rule counts the number of assigned licenses per web query in all Administrative Units, where the Microsoft 365 License Quota section is configured. You can see the summary information across all Administrative Units in the Cayosoft Administrator Console, and the Microsoft 365 License Quotas.

6. To determine which Administrative Units are over quota, licensing costs per Administrative Units, and other quota consumption details, you can create and schedule the reporting rule the Microsoft 365 License Quota Report. For more information, please read Office 365 License Quota report rule article.

7. To send the alert when the number of available licenses drops below the specified Alert Threshold in comparison to the quota limit, you need to create and schedule the alerting rule Microsoft 365 License Usage Approaching Quota Limit. For more information, please read Office 365 License Usage Approaching Quota Limit rule article.

NOTE: The Analytics collection | Quota Information rule must be run each time after license quota configuration changes. Both license quota reports are using the data collected by this rule.

NOTE: In case of replication, Office 365 license quotas can be configured only on Publisher.

Microsoft 365 License Quotas Usage

Web Portal web actions

1. When the Microsoft 365 License Quotas are configured, in the Cayosoft Administrator Console, run the Analytics collection | Quota Information rule. For details see the Configuration section above.

2. Connect to the Web Portal.

3. Click the AD Users web query in the Admin Unit where Micro soft 365 quotas are configured.

4. Find a user that is in the scope of this Web Query and select it.

5. Click the Microsoft 365 License web action for this user.

6. On the Assign License form, you can see that the number of Microsoft Stream and Office 365 E3 Developer licenses are limited to 6:

When all licenses that are defined in the quota limit are assigned, the information about it will be displayed in red color on the form and the license can't be selected:

When creating a new user in a web query where MS 365 license quotas are defined you will also see quotas information when assigning MS 365 license to a user.

Microsoft 365 License Quotas dashboard

To manage configured Microsoft 365 license quotas from the Web Portal, navigate to Dashboards > Microsoft 365 License Quotas. If you are not a Global Admin, you must be delegated permission to access this dashboard. You will see the list of all Virtual Admin Units and web queries with an indication of whether the quotas are configured and for which licenses. You can select a certain web query and perform Edit License Quota web action to enable\disable quota management for this web query and define the quota limits.

Delegation of license quotas for a certain admin unit

To limit editing quotas to certain delegated admins and certain Virtual Admin Units, you must add the Edit License Quota web action to user web queries in corresponding Virtual Admin Units. So, anyone who is delegated to this web query and web action will be able to edit the quota for this specific Virtual Admin Unit/web query. You don't have to search or select a user to click the web action, it is always available.