Microsoft 365 licensing is genuinely confusing, and that confusion costs Danish businesses money every year. We regularly encounter organisations that are paying for enterprise-grade features they never use, running duplicate tool categories across different licence tiers, or paying for users who left the company six months ago.
This guide covers every pricing tier that matters for a Danish SMB, the most common and expensive mistakes we encounter, and practical strategies to optimise costs without breaking anything.
How Microsoft 365 Licensing Actually Works
Microsoft 365 is sold as a subscription per user per month. Every user in your organisation needs at least one licence, and each licence tier comes with a bundle of products and services. The higher the tier, the broader and more powerful the bundle.
There are two main licence families relevant to Danish SMBs:
- Microsoft 365 Business plans — designed for organisations with up to 300 users
- Microsoft 365 Enterprise plans — no user cap, intended for larger organisations or those with specific compliance needs
Within each family, there are multiple tiers. Understanding which tier gives you what — and crucially, which tier you actually need — is the core of any licensing optimisation exercise.
Microsoft 365 Business Plans: What Each Tier Includes
Microsoft 365 Business Basic (~7 USD/user/month)
The entry-level plan. Includes web and mobile versions of Office apps, Exchange Online (50 GB mailbox), Teams, SharePoint, and OneDrive (1 TB). Does not include desktop Office apps. This plan makes sense for users who work primarily in a browser and don’t need locally installed Word or Excel.
Microsoft 365 Business Standard (~12.50 USD/user/month)
Adds desktop Office apps (Word, Excel, PowerPoint, Outlook, OneNote, Access) and the ability to host webinars in Teams. This is the “typical office worker” plan for most SMBs.
Microsoft 365 Business Premium (~22 USD/user/month)
Adds Microsoft Intune (mobile device management), Microsoft Entra ID P1 (conditional access, group-based licence management), Microsoft Defender for Business, and Azure Information Protection P1. For any organisation that takes security seriously, this is the tier where the investment begins to make sense holistically.
Note: Microsoft’s official plan comparison is a useful starting point, though prices in DKK will vary slightly based on your reseller agreement and currency fluctuation.
Microsoft 365 Enterprise Plans: When Do You Need Them?
Microsoft 365 E3 (~36 USD/user/month)
Includes all core Microsoft 365 services plus compliance features: Microsoft Purview (eDiscovery, audit logs, retention policies), Azure Information Protection P1, and Entra ID P1. The jump from Business Premium to E3 is smaller than it looks — if you need compliance tooling, E3 often makes sense.
Microsoft 365 E5 (~57 USD/user/month)
Adds advanced security and compliance: Microsoft Defender for Endpoint P2, Defender for Office 365 P2, Entra ID P2 (Privileged Identity Management, Identity Protection), Microsoft Sentinel integration, and advanced compliance features including Communication Compliance and Insider Risk Management.
E5 is powerful, but it is expensive — and most organisations that buy it use only a fraction of its capability. We frequently find Danish SMBs running E5 for all users when only 20-30% of the workforce genuinely needs E5 security features.
Add-ons and Standalone Licences
Microsoft sells many features as standalone add-ons rather than requiring you to move to a higher tier:
- Defender for Business (~3 USD/user/month) — can be added to Business Standard if you don’t need full Business Premium
- Microsoft Teams Phone Standard (~8 USD/user/month) — PSTN calling capability
- Exchange Online Plan 1 or 2 — for users who only need email
- Microsoft Entra ID P1 or P2 — sold as standalone licences if you don’t want the full Microsoft 365 suite
Understanding the add-on catalogue is often more valuable than moving everyone to a higher base tier.
The Six Most Common Licensing Mistakes Danish SMBs Make
Mistake 1: Everyone on the Same Plan
“All employees get Business Premium” is a common policy — and one that typically wastes 25-40% of the licence budget.
A Danish distribution company with 150 employees might have:
- 20 knowledge workers who use Word, Excel, and Teams heavily
- 60 warehouse staff who only need Teams for shift scheduling and a company email address
- 15 field sales representatives who need mobile Office apps
- 5 IT administrators who need full security features
Putting all 150 on Business Premium costs approximately 150 × 22 = 3,300 USD/month. The right mix (Basic for warehouse, Business Standard for sales, Business Premium for knowledge workers and admins) would cost closer to 2,100 USD/month — a saving of over 1,200 USD per month, or 14,400 USD per year.
Mistake 2: Ignoring Unlicensed or Ghost Users
According to research by Blissfully (now Vendr), the average organisation has 15-20% of SaaS licences assigned to users who are no longer active. Microsoft 365 is no exception. In an organisation that has grown through hiring and turnover, it is common to find licences assigned to former employees who haven’t had their accounts properly offboarded.
A disciplined offboarding checklist — which removes the Microsoft 365 licence as a mandatory step — pays for itself quickly.
Mistake 3: Buying E5 When Business Premium Would Suffice
E5 is marketed as the “complete” Microsoft security solution. That framing is accurate — but completeness is not always necessary. For a Danish SMB with 50 employees and no specific regulatory exposure beyond GDPR, Business Premium gives you:
- Intune for device management
- Conditional Access via Entra ID P1
- Defender for Business (endpoint protection)
- Microsoft Defender for Office 365 Plan 1 (anti-phishing, safe links)
That is a solid security baseline at 22 USD/user/month versus 57 USD for E5. Unless you specifically need Privileged Identity Management, Communication Compliance, or Defender for Endpoint P2, E5 may be significant overspend for your risk profile.
Mistake 4: Renewing Without Reviewing
Microsoft licences renew annually (or monthly, depending on your agreement). The renewal date is when your reseller typically confirms the quantity. If nobody in the organisation reviews actual usage before renewal, quantities from the previous year carry forward — including all the ghost users and unused high-tier licences.
Make licence review a mandatory step three months before the renewal date. Use the Microsoft 365 admin centre’s usage reports to see actual per-user activity.
Mistake 5: Not Using Microsoft’s Licence Mobility and Mix-and-Match Rights
Many organisations don’t realise they can mix plans within the same tenant. You can have some users on Business Basic, others on Business Standard, and a subset on Business Premium — all in the same Microsoft 365 tenant, managed from the same admin centre.
This “profile-based licensing” approach is one of the most effective cost optimisation strategies, and it requires no technical migration — just a licence change in the admin centre.
Mistake 6: Overlooking the Microsoft Partner Benefit
If you purchase Microsoft 365 through a Microsoft Cloud Solution Provider (CSP) partner, that partner often has access to promotional pricing, volume discounts, and the ability to structure agreements in ways that a direct purchase from Microsoft doesn’t allow.
More importantly, a good CSP partner reviews your licence portfolio proactively — not just at renewal. At inciro, licence reviews are part of how we work with every customer on a Microsoft 365 agreement.
Practical Optimisation Strategies
Step 1: Pull Usage Reports
In the Microsoft 365 admin centre, navigate to Reports → Usage → Microsoft 365 Apps usage. This shows per-user activity across all apps over the past 30, 90, or 180 days. A user who hasn’t opened Word or Outlook in 90 days probably doesn’t need a Business Premium licence.
Microsoft’s documentation on usage reports explains what the reports include and how to interpret them.
Step 2: Define User Profiles
Map your workforce to four or five licence profiles based on actual job function:
- Light user: email and Teams only → Business Basic
- Office worker: email, Teams, desktop Office apps → Business Standard
- Power user with security needs: all of the above plus Intune, Defender → Business Premium
- Administrator / security team: full E3 or E5 depending on compliance requirements
- External / shared room device: Shared Computer Activation or Meeting Room licence
Step 3: Review Add-on Licences
List every add-on licence in your tenant and match it to an active user need. Common add-ons that get forgotten include:
- Teams Phone licences for employees who no longer make PSTN calls
- Power BI Pro licences for users who haven’t opened Power BI in 6+ months
- Project and Visio Plan 2/3 licences
Step 4: Clean Up Disabled Accounts
Run a report of all disabled user accounts that still have active licences. In Entra ID, go to Users → All users → Filter: Account enabled = False. Remove licences from all disabled accounts that are not subject to a legal hold or compliance retention requirement.
What This Means for Your Business
Microsoft 365 licensing is not a set-and-forget decision. The product catalogue changes, your workforce changes, and your security requirements change. An annual review — tied to your renewal date — is the minimum. A twice-yearly review is better for organisations with high turnover or rapid growth.
The savings from a proper review are rarely trivial. In our experience working with Danish SMBs, a structured licensing review typically identifies 15-35% cost reduction without reducing any functionality that users actually use.
At inciro, we conduct licensing reviews as a standalone engagement or as part of a broader Microsoft 365 health assessment. The output is a concrete action plan with a line-by-line recommendation per user group, an implementation schedule, and a projected cost saving.
Book a strategic conversation — we will analyse your current Microsoft 365 licence portfolio and tell you exactly where you are overpaying and what to do about it.