The Microsoft 365 productivity tax and how to reclaim it

Defining the Microsoft 365 Productivity Tax

Over the last few years, businesses have embraced Microsoft 365 (M365) to facilitate remote work, enhance team collaboration and leverage its extensive suite of tools.

However, after the initial enthusiasm and investment in new licenses or tier upgrades, adoption within teams soon evened out. A study from CoreView reflects this concerning trend. Over half of enterprise Microsoft 365 licences are sitting idle, underutilised, oversized, or unassigned. To put it simply, 56% of Microsoft 365 licences go to waste.

This silent “productivity tax” highlights a crucial gap between the myriad features offered by M365 and the actual value businesses derive from them. Often, you pay for a wide range of features (e.g., collaboration tools, content governance and reporting).

Yet your employees barely use them. They stick to the basic functionalities such as email and traditional file sharing. This isn’t due to laziness or indifference. It stems from a lack of awareness about what is available and the confidence to use the comprehensive toolkit that M365 provides.

As a result, your business loses out on valuable, scalable capabilities and countless untapped opportunities. This cascades into inefficiencies that erode the value of your investment in M365 licenses, ultimately fuelling the productivity tax.

It’s evident that simply activating licenses won’t automatically translate into effective workforce enablement. But the clock is ticking. Microsoft announced price increases from 1st July 2026. Thus, the M365 productivity tax is about to become even more expensive.

Now is the perfect time to reassess your licenses by critically evaluating internal usage metrics and unlock the full potential of your investment.

Lurking in Plain Sight: The Financial Drain of Shelfware and Shadow IT

Auvik reports that in 2026, every month 61% of businesses discover new shadow applications being used within their business. Employees often turn to messaging apps that aren’t part of official communication and utilise free (and unapproved) software subscriptions. This has transformed the theoretical concern of a productivity tax into a pressing reality with tangible financial consequences.

For instance, many businesses pay for more expensive M365 licenses (e.g., E3 or E5) while their users hardly utilise even the basic features available (i.e., shelfware) and prefer unapproved applications (i.e., shadow IT). This misalignment can significantly impact your business’s financial health.

Additionally, when you don’t have full visibility into licence utilisation, making informed decisions about your investments or demonstrating a solid return on investment (ROI) becomes nearly impossible.

3 Examples of Underutilised M365 Features Impacting Your Business’s Finances

When your employees lack confidence in the tools available within the Microsoft 365 ecosystem, they often turn to familiar, unapproved alternatives that meet their needs. This behaviour isn’t intended to circumvent official tools; it’s simply about getting the job done. As a result, you might have to deal with:

1. Duplicated Project Management Tools. A team might opt for third-party project management software such as Trello or Asana rather than using the readily available Microsoft Planner. This choice doesn’t just mean extra spending. It creates additional security risks, data inconsistencies and fragmented collaboration.

2. Unapproved Communication Platforms. Some employees may prefer widely recognised applications like Zoom or Slack for video conferencing over Microsoft Teams, resulting in wasted valuable subscription funds.

3. Standalone cloud storage services. Users could select standalone cloud storage platforms such as Dropbox without realising that OneDrive is already included in their M365 package.

These examples are just the tip of the iceberg. Gartner predicts that in 2027, 75% of employees will acquire, modify, or create technology without IT’s knowledge. Such tool duplication leads to significant budgetary bloat, as you end up paying for features and tools you already have. Over time, these less visible expenses accumulate, pulling funds away from innovative IT initiatives and strategic projects.

Microsoft 365 License Optimisation Isn’t Only a Cost-Cutting Exercise

License optimisation is sometimes perceived as a tedious back-office task or an excuse to strip resources from users. In reality, it’s a significant opportunity to:

• Free up vital IT budget for innovation
• Drive cost savings
• Boost efficiency
• Increase security

By adopting this strategic approach, you will establish a streamlined suite of tools that empowers your team to work more effectively. It will allow your business to channel resources into new projects that drive growth and enhance financial stewardship in the long run.

How Poor Adoption Creates Operational Waste

The financial consequences of underutilising Microsoft 365 licenses are only part of the issue. In fact, inadequate platform adoption translates into operational chaos that stifles daily workflows, hampers automation and frustrates employees.

For instance, consider a scenario where your marketing team prepares a campaign presentation. Instead of using SharePoint or OneDrive’s real-time co-authoring features, they constantly edit and exchange different versions of the document via email. This outdated approach can result in several problems, including:

• Poor version control. When multiple employees modify a document, save different versions on their devices and then exchange them via email, critical feedback might be lost or overlooked. They also waste time determining which version is the most recent.
• Siloed data. If important information remains trapped in emails or specific individual devices and tool adoption is inconsistent, it becomes siloed. Thus, other team members or departments may not have access to essential resources, making it difficult to grasp the full context of a project. Collaboration suffers, and innovation grinds to a halt.
• Time drain and productivity loss. When your employees struggle to find information, collaborate effectively, automate routine tasks, or must spend time settling misunderstandings, they can’t focus on more strategic tasks. Manual processes persist, leading to decreased productivity and increased frustration.

Hence, your employees may be tempted to turn to informal channels to get their work done, dangerously bypassing official systems.

Ultimately, even though the Microsoft 365 ecosystem was designed to streamline operations, inadequate user training and support can turn it into a barrier rather than a facilitator. Instead of enhancing efficiency, outdated workflows will slow down operations and affect your overall business performance.

The Hidden Security Risks of Unused Microsoft 365 Features

The same CoreView study we mentioned at the beginning of this article found that 45% of large businesses experienced a breach or a compliance incident in 2025 due to M365 misconfiguration.

This statistic demonstrates that simply owning a comprehensive software license doesn’t automatically protect you against cyber attacks, even if that software comes with a comprehensive security package.

The truth is that unused or improperly configured features within M365 do more than only drain your budget. They open the door to significant security and operational gaps that jeopardise your business’s data integrity and compliance.

For instance, advanced features included in the higher-tier M365 plans, such as Defender for Endpoint, Microsoft Purview for data governance and automated sensitivity labels, are completely ineffective if they are not properly configured and actively used, exposing your business to:

• Credential Theft. Defender for Endpoint provides robust protection against threats. However, if you didn’t set up endpoint protection correctly, your devices will remain exposed to attacks.
• Data leaks and breaches. Microsoft Purview offers a robust range of data security, governance and compliance solutions. When utilised effectively, it can help prevent data breaches by minimising the risk of users inadvertently sharing documents containing sensitive information with unauthorised audiences. Nevertheless, without proper configuration, your sensitive data might slip into the wrong hands.
• Compliance issues. With the introduction of the Network and Information Security Directive (NIS2), failing to set up and use Microsoft Purview’s compliance and data governance features, such as DLP, information protection labels and audit logs, may lead to significant penalties. Regulators are not interested in licences; they want confirmation that you have correctly deployed these capabilities.

Attackers thrive on poorly governed workflows. A mismanaged M365 environment becomes a breeding ground for credential theft and data leakage.

Cyber criminals proved it again in 2025. The attackers exploited many incorrectly configured M365 security controls at several Western Australian government entities to steal $71,000 and sensitive children’s data.

The solution to this problem is straightforward. Proactively manage these risks by ensuring that your M365 security tools are properly implemented. By doing so, you will minimise your exposure to threats and emphasise the importance of effective tool adoption within your user workflows.

The Way Out: Shift Your Strategy from Deployment to True Enablement

Transitioning from a mindset of simply deploying and configuring tools and disengaging to one of true enablement is essential for those IT leaders seeking to drive real productivity across their businesses.

Create an M365 environment that boosts productivity, maintains security and evolves with your business requirements. Encourage your employees to fully leverage the capabilities of M365 rather than merely scratching the surface.

3 Strategies for Cultural Enablement

You can’t force your teams to utilise their licenses, but you can inspire them to embrace M365 and drive adoption. Here are three key strategies you can implement to increase your M365 licences usage.

1. Identify Internal Champions
Find employees who are proficient and enthusiastic about using M365 tools. They will act as advocates within their teams, leading by example and showing colleagues how to utilise the features available effectively. For instance, users who master Microsoft Teams can run informal workshops or lunch-and-learns to share tips and best practices. It will enhance overall adoption and increase productivity.

2. Provide Contextual Training
Generic training sessions often miss the mark. Tailor training sessions to address the specific workflows and tools used within different departments. It will ensure relevance and effectiveness. For example, your internal champion can set up a specialised session for the finance team on Excel automation and data visualisation. Meanwhile, the marketing department champion might showcase how to leverage SharePoint for collaborative content creation.

3. Communicate the Why
Understanding the purpose behind adopting new features is critical for user buy-in. When users see the real-world benefits of adopting these tools, they will be more inclined to use them. Demonstrate how OneDrive simplifies file storage and collaboration while cutting down email clutter. It will encourage engagement, boost collaboration and reduce operational bloat.

Clearly, user adoption is not a one-time project; it is an ongoing operational strategy that demands commitment and governance. To ensure success, prioritise user experience and enablement, and provide ongoing support and resources.

By empowering your employees to navigate M365 tools effectively, you will foster an agile, innovative and highly productive workforce. That is how you can ensure your M365 investments bring tangible value to your business.

Reclaim Your Investment with a Secure 365 Assessment

To tackle productivity and security challenges of your M365 subscriptions, you don’t need to purchase additional software. All you have to do is reclaim your investment by unlocking the full potential of the tools you already own.

As we have learned, the real issue isn’t M365 itself. It’s how your teams use it. Because when they don’t know what M365 can do, they turn to third-party apps. Costs quietly add up while productivity and security stagnate or decrease.

Acora’s Secure 365 Assessment is an essential first step in your journey toward a unified system that aligns with your teams’ workflows without unnecessary expenses. Our comprehensive assessment provides you with a crystal-clear picture of your teams’ current M365 usage patterns.

By identifying key areas of overlap with redundant third-party applications and pointing out critical security misconfigurations, you will:

• Gain clear usage visibility. Get a detailed snapshot of how your teams are utilising Microsoft 365 tools. It will enable you to pinpoint underused features that can significantly boost productivity and help your teams work smarter, not harder.
• Optimise costs. Identify and eliminate costly third-party applications and subscriptions that add little value. It will lead to achieving immediate financial savings.
• Enhance your security posture. Detect potential vulnerabilities and security gaps that put your sensitive data at risk. By addressing these issues, you will bolster security, maintain compliance and protect your business against potential threats.

By partnering with Acora, you can transform M365 from a frustrating monthly burden into a streamlined, secure and highly efficient modern workplace.

Reclaim your investments. Leverage the power of M365 productivity tools at your fingertips, cut down on waste and truly empower your workforce to thrive. Get in touch now.