IT budgets are tightening while AI spend is rising, and licensing changes from major vendors are adding pressure. Use this checklist to find practical cost savings opportunities across Microsoft, cloud, security operations, and infrastructure before 2026 renewals and mid-year pricing shifts hit.
IT Budgets are tightening, as evidenced by our recent poll, where 37% of IT leaders said their budgets were “down significantly.” Yet AI spending is rising, as evidenced by KPMG’s CEO outlook, which showed 69 percent of CEOs plan to allocate 10–20 percent of their budgets to AI over the next 12 months. Microsoft’s licensing/pricing changes are coming mid‑year, and Broadcom continues to tighten its licensing plans.
We therefore present a list to assess where your organization may have untapped efficiencies.
Not every organization will be able to take advantage of every idea below, but each has real savings opportunities across many customer environments.
1. Enable Free Microsoft 365 Copilot Chat
Potential Savings — $$
The Opportunity
Microsoft 365 Copilot Chat is included at no additional cost with most Microsoft 365 plans (E1–E5, F‑licenses). Many orgs aren’t using it.
Why It’s Worth Considering
– Reduces shadow AI use (as people leak off to ChatGPT, Claude, Gemini, DeepSeek, etc.)
– Keeps organizational data inside your tenant
– Provides basic GenAI value without the $30/user Copilot license
Who This Applies To
Any organization with Microsoft 365 licensing (especially mid‑market orgs) that cannot fund Copilot licenses for 100% of associates.
How To Check for Savings Potential
– Review whether employees are using unsanctioned AI tools
– Validate whether use cases justify upgrading to paid Copilot for a subset of users
2. Turn on Free Defender for Cloud
Potential Savings — $ ($$$$ if it helps avoid a breach)
The Opportunity
Defender for Cloud includes a free tier offering core cloud‑security‑posture capabilities that many orgs pay third parties for. This is not just for resources in Azure, but servers, databases, etc., in any cloud (including on-premises).
Why It’s Worth Considering
– MDC provides continuous Cloud Security Posture Management (and assessments of misconfigurations)
– For every system under watch, provide security recommendations and baseline benchmarking
– Inventory and visibility across Azure, on‑prem, and multi‑cloud (via Arc)
Who This Applies To
Organizations using Azure, hybrid cloud, or running multiple security tools with overlapping functionality.
How To Check for Savings Potential
– Evaluate whether you’re already using what the free Defender tier already provides
– Review secure score and recommendations– many high‑impact items require no paid add‑ons
3. Evaluate Security Operations; MSSP or DIY
Potential Savings — $$ ($$$$ if it helps avoid a breach)
The Opportunity
DIY 24×7 security operations are expensive and difficult to staff. Many mid‑market teams rely on individuals “checking alerts when they can,” which increases risk.
Why It’s Worth Considering
– MSSPs provide 24×7 coverage for a predictable monthly cost
– Internal teams often split time between operations, projects, and security
– Consolidating onto Defender + Sentinel usually lowers total spend
Who This Applies To
Organizations with lean IT teams, no dedicated SecOps team, or those struggling with alert fatigue or incident response speed.
How To Check for Savings Potential
– Identify how many FTE hours are spent managing security tools
– Evaluate cost of 24×7 coverage (internal vs. outsourced)
– Assess whether current tooling is fully implemented or partially deployed
4. Apply FinOps Best Practices To Azure Spend
Potential Savings — $$ (10–30% common)
The Opportunity
Most organizations overspend on Azure due to idle resources, incorrect sizing, and a lack of policy guardrails.
Why It’s Worth Considering
– Azure anomalies can produce surprise bills
– Right‑sizing can quickly reduce monthly OpEx
– Reserved instances and savings plans produce predictable cost reductions
Who This Applies To
Any org with meaningful IaaS/PaaS usage — especially those without monthly cost reviews.
How To Check for Savings Potential
– Look for stale VMs, orphaned disks, unused snapshots
– Review CPU and memory utilization for right‑sizing opportunities
– Check for resources without owners or expiration dates
– Evaluate whether budgets/alerts are configured
– Review whether you have reservations or are paying as you go rates across the board
5. Optimize Teams Phone Costs
Potential Savings — $
(Often hidden and overlooked)
The Opportunity
– Teams Phone orgs using Calling Plans can combine Shared Calling Plans with Pay‑As‑You‑Go calling
– Auto attendants with dial‑by‑name find multiple people sharing a single # / calling plan
– Eliminating unused phone numbers and lines
Why It’s Worth Considering
Many users make fewer than 200 outbound minutes/month — meaning they don’t need a dedicated calling plan.
Who This Applies To
Any organization using Teams Phone or moving to Teams from legacy PBX/VoIP systems.
How To Check for Savings Potential
– Count users who rarely place outbound calls
– Assess whether desk phones are still required
– Review calling plans ($6–$12/month vs. $3 PAYG + usage)
6. Reevaluate VMware Licensing and Consider AHV or Azure
Potential Savings — $$$$
The Opportunity
VMware renewals have increased dramatically (2×–5×+). Alternatives like Nutanix AHV or Azure migrations often reduce both licensing and operational overhead.
Why It’s Worth Considering
– VMware pricing volatility is continuing
– Cloud options eliminate refresh cycles
– AHV provides simpler operations without VMware licensing
Who This Applies To
Orgs facing VMware renewals in the next 12–18 months.
How To Check for Savings Potential
– Evaluate renewal quotes (compare 1×/2×/5× scenarios)
– Assess consolidation potential (rack space, power, cooling)
– Review workloads that can move to PaaS/SaaS instead of VMs
– Request a TCO model comparing VMware Renewal to AHV Migration, Azure Native, or Azure VMware Solution (BYO License)
7. Optimize Your Microsoft Stack, Licensing, and Tools — While Preparing for Pricing Changes
Potential Savings — $ to $$
The Opportunity
Organizations routinely overspend by (1) running overlapping security, compliance, and management tools, (2) carrying the wrong Microsoft 365 license mix, (3) keeping under‑utilized or redundant software, and (4) being surprised by upcoming Microsoft pricing changes. Evaluating these areas together yields some of the largest savings opportunities.
Why it’s worth considering
- Consolidating onto Microsoft’s native capabilities reduces vendor sprawl and simplifies operations
- E5 can cost less than E3 plus multiple add‑ons
- Frontline (F‑licenses) can lower costs for light‑usage workers
- Removing low‑use and duplicate tools eliminates silent recurring costs
- Preparing for mid‑year Microsoft pricing changes avoids budget shocks
Who This Applies To
- Organizations running E3 with multiple security/compliance add‑ons
- Organizations using third‑party MFA, DLP, EDR/AV, CASB, SIEM, or MDM tools similar to what Microsoft provides
- Environments with “tool creep,” credit‑card SaaS purchases, or multiple owners with overlapping budgets
- Companies without a license or tool audit in the last 12–18 months
- Organizations approaching renewal cycles or CSP realignment
How To Check for Savings Potential
- Review the full Microsoft suite — Defender, Purview, Entra, Intune, Teams Phone — what you already own but haven’t enabled, and map overlap with current paid tools
- Inventory third‑party tools; flag those with <30% adoption or unclear business outcomes
- Compare cost models:
– Current (E3 + add‑ons + third‑party tools)
– Consolidated E5 (with removal of overlapping tools) - Validate frontline workers who may downshift to F‑licenses
- Model the impact of July’s Microsoft pricing updates and consider locking in CSP pricing early
Final Thoughts
This checklist reflects a few common and practical optimization opportunities. Even adopting one or two items can free up budget for AI, modernization, or staffing needs.
Optimize Microsoft spend before pricing changes hit
Our Licensing Optimization engagement helps organizations right-size Microsoft 365 licenses, eliminate tool overlap, and prepare for upcoming pricing changes, without disrupting operations.
