Microsoft EA Optimization Helps California Healthcare Group Avoid $1.5M in Shelfware.
Challenge:
A large California-based healthcare group with over 20,000 employees (including medical staff and administrators) engaged Redress Compliance to optimize its Microsoft Enterprise Agreement (EA).
Over the years of growth and change, the organization had accumulated significant “shelfware” licenses paid for but not actively used. Industry studies indicate that 20–50% of enterprise software licenses go unused on average, and this healthcare group suspected a similar level of waste in its Microsoft 365 and Azure subscriptions.
Their goals were clear: identify and eliminate unused licenses, right-size their Microsoft 365 licensing, and avoid spending another large sum on software that wasn’t delivering value.
In particular, the group wanted to avoid approximately $1.5 million in licensing costs that would be wasted on unused software if they renewed the EA as-is.
Approach: Redress Compliance deployed a structured approach to analyze usage, reclaim unused licenses, and renegotiate the EA for maximum savings and efficiency.
- Comprehensive License Audit: The team thoroughly audited the healthcare group’s Microsoft deployments from Office 365 accounts to Azure services. They mapped every license the organization owned to actual user activity and needs. This audit revealed hundreds of inactive or unassigned M365 licenses and several cases of users assigned to high-cost plans (E5) despite only using basic E3-level features. These findings confirmed a substantial shelfware problem, aligning with typical enterprise trends.
- Shelfware Identification: Redress pinpointed exactly where the unused or under-utilized licenses were using the audit data. For example, many shared workstations in clinics were each tied to a separate Office 365 license that was rarely used, and some departments had over-provisioned licenses “just in case” of new hires. Each instance was documented, attaching real cost figures to the waste. (One analysis showed that roughly 25% of the group’s paid licenses were effectively shelfware – users who hadn’t logged in for months, or no one was using premium features.)
- License Optimization Plan: A remediation plan was developed with the shelfware identified. This involved reclaiming or eliminating licenses that were not in use and downgrading license tiers where appropriate. For instance, accounts belonging to former employees or test accounts were removed or reassigned, and dozens of staff who only needed email/Teams were moved from costly E5 subscriptions to more appropriate (and cheaper) E3 or E1 plans. The goal was to ensure every dollar spent on licensing was aligned to actual business needs, with no superfluous extras. As part of this plan, Redress also helped the client establish internal procedures to reuse or cancel licenses when employees leave or roles change, preventing shelfware from creeping back.
- EA Contract Renegotiation: Redress Compliance leveraged the data from the audit to renegotiate the upcoming EA renewal with Microsoft. Armed with clear evidence of under-utilization, the team worked with the client’s IT procurement and Microsoft account reps to right-size the agreement. This meant reducing the total license count in the new EA, adjusting the mix of license types (fewer premium licenses where not needed), and securing terms that provided flexibility for future adjustments. Microsoft’s EA is a 3-year commitment, which can lock organizations into paying for more licenses than they truly need. To address this, the negotiated terms included the ability to make license quantity adjustments at true-up with minimal friction, ensuring the hospital group wouldn’t be stuck overspending if its needs changed. Redress’s experience in Microsoft negotiations was key to obtaining management’s desired cost concessions and protections.
- Governance and Monitoring: Finally, the organization implemented stronger software asset management practices going forward. Redress was guided by setting up quarterly license usage reviews and cross-departmental accountability. The healthcare group’s IT department began generating regular reports for business unit leaders showing license utilization rates and costs. This transparency incentivized teams to hand back licenses they don’t need, maintaining the lean license footprint achieved in the renewal. The group ensured that shelfware stays minimized in the long run by making license management an ongoing process (not just a last-minute activity at EA renewal).
Results: The EA optimization initiative delivered significant financial and operational benefits:
- Cost Savings: The healthcare provider avoided approximately $1.5 million in unnecessary licensing spend by eliminating shelfware and oversubscription. This translated to a double-digit percentage reduction in their Microsoft licensing costs. Essentially, instead of paying for thousands of licenses that were not in use, those funds were saved and reallocated to higher-priority needs. (Analysts estimate companies can save roughly 20–30% by cutting underused licenses. This case fell squarely within that range.)
- Higher License Utilization: Post-optimization, the organization’s Microsoft license utilization rate improved dramatically. Nearly 100% of purchased licenses are now actively used by staff, up from around seventy-five percent before. Removing excess licenses means IT spend is tightly aligned to actual usage, the software footprint is leaner, and clear ROI is delivered.
- Operational Efficiency: The cleanup and new governance processes led to better visibility and control over software assets. The IT team can quickly spot and address unused accounts, preventing waste from accumulating. Departments became more engaged in license management once they saw the direct cost impact. This cultural change toward eliminating waste has made the IT budgeting process more predictable and efficient.
- Compliance and Alignment: Throughout the optimization, the healthcare group maintained full compliance with Microsoft’s licensing terms, removed only genuinely unused licenses, and ensured all active users still have the appropriate licenses. By tailoring licenses to actual user needs, the organization also aligned its IT investments with its operational requirements. The cost savings from this project were subsequently redirected into strategic initiatives (for example, funding a new telemedicine platform and enhanced cybersecurity tools), directly supporting the group’s mission to provide high-quality patient care with modern technology.
Quote from the IT Director: “Redress Compliance’s support was instrumental in uncovering and eliminating our licensing waste. They helped us optimize our Microsoft EA so that we’re now only paying for what we truly use, which freed up budget to invest in patient-care technologies. It felt like we removed a hidden tax on our IT spend. Thanks to their expertise, our Microsoft licensing is finally aligned with our actual needs, and we have a solid process to keep it that way.”
Key Results:
- Savings Achieved: ~$1.5 million in shelfware costs avoided (licenses pared back before renewal).
- License Utilization: Improved to ~99% active use of purchased licenses, up from ~75% before.
- Cost Reduction: Overall, Microsoft licensing spend was reduced by 15–20% without sacrificing the required services.
- Strategic Reinvestment: Dollars saved were redirected to new digital health initiatives, boosting innovation.
- Process Improvement: Established ongoing license monitoring and governance to prevent future overspending.
This case highlights how Redress Compliance helped a healthcare organization turn a bloated EA into a lean, efficient agreement.
By eliminating shelfware and aligning licenses with actual usage, the hospital group achieved substantial cost savings while ensuring its clinicians and staff still had all the Microsoft tools they needed. This is a prime example of driving out hidden costs and maximizing value in enterprise software agreements.
