Qwantro Cloud Knowledge Hub

Navigate the complex world of Microsoft licensing and cloud costs with confidence.

Our Cloud Knowledge Hub explains essential terms in plain English, helping you understand everything from CSP pricing to Azure optimisation.

Whether you're evaluating licence tiers, planning cloud migrations, or simply trying to decode your Microsoft bill, these definitions will help you make informed decisions that save money and avoid costly mistakes.

Contact

A

Active Directory (AD)
Microsoft's on-premises directory service that manages user accounts, computers, and permissions within an organisation. Modern businesses typically integrate AD with cloud services like Azure AD for hybrid identity management.

Add-on Licensing
Additional Microsoft features that can be purchased separately and added to base licences, such as security tools or advanced analytics. This approach often costs less than upgrading to premium licence tiers.

AI Readiness
The process of preparing an organisation's data, security, and user training for AI tools like Microsoft Copilot. Proper AI readiness ensures maximum return on investment and successful adoption.

Annual Commitment vs Monthly Billing
The choice between paying Microsoft licensing costs annually (often with discounts) or monthly for cash flow flexibility. CSP partners like Qwantro offer both options with transparent pricing.

Application Virtualisation
Technology that allows software applications to run in isolated virtual environments rather than being installed directly on devices. This approach can reduce licensing costs and improve security.

Azure AD / Entra ID
Microsoft's cloud-based identity and access management service, now called Microsoft Entra ID. It handles user authentication and authorisation for cloud applications and services.

Azure Cost Allocation
The practice of assigning cloud costs to specific departments, projects, or business units for accurate budgeting and accountability. Proper allocation helps identify cost optimisation opportunities.

Azure Hybrid Benefit
A licensing benefit that allows organisations to use existing Windows Server or SQL Server licences on Azure, reducing cloud costs by up to 40%. Many businesses don't realise they're eligible for this saving.

Azure Reserved Instances
Discounted Azure pricing available when committing to specific resources for one or three years instead of paying on-demand rates. Reserved instances can reduce costs by up to 70% for predictable workloads.

B

Backup & Recovery

Services and policies for protecting and restoring business data in case of loss, corruption, or disaster. Microsoft offers various backup solutions with different licensing requirements and costs.

Baseline Licensing

The minimum set of licences required for an organisation's core operations before adding specialised or premium features. Understanding baseline needs prevents over-licensing.

Billing Flexibility

The ability to adjust payment schedules, licence quantities, and contract terms to match business cash flow and operational needs. CSP partners typically offer more flexibility than direct Microsoft contracts.

Business Premium

Microsoft 365's mid-tier business plan that includes core productivity apps plus basic security and device management features. Often sufficient for small to medium businesses without enterprise requirements.

BYOL (Bring Your Own Licence)

The ability to use existing software licences when moving to cloud services like Azure, potentially reducing costs. Requires careful licence compliance management.

C

CapEx vs OpEx (Cloud)

The financial difference between capital expenditure (buying servers) and operational expenditure (paying for cloud services monthly). Cloud licensing converts IT costs from CapEx to OpEx for better cash flow management.

Chargeback / Showback

Methods for allocating IT costs to business units, either by actually charging departments (chargeback) or showing them their usage costs (showback). Both approaches encourage responsible resource consumption.

Cloud Solution Provider (CSP)

Microsoft partners like Qwantro who sell cloud services with added value, support, and often discounted pricing. CSPs provide an alternative to buying directly from Microsoft.

Compliance Licensing

Licences and features required to meet regulatory requirements such as GDPR, financial services regulations, or healthcare standards. Often involves specific security and data retention capabilities.

Copilot (Microsoft 365)

Microsoft's AI-powered productivity assistant integrated into Office applications like Word, Excel, and Outlook. Requires additional licensing and proper data governance for effective implementation.

Cost Optimisation

The ongoing process of reducing cloud and licensing costs without sacrificing functionality or performance. Includes rightsizing resources, eliminating waste, and leveraging discounts.

D

Data Loss Prevention (DLP)

Security features that identify, monitor, and protect sensitive information from unauthorised access or sharing. Available as add-ons or included in premium Microsoft 365 licences.

Device-Based Licensing

Licensing model where software is licenced per device rather than per user, suitable for shared computers or specific use cases. Alternative to user-based licensing in certain scenarios.

Direct Microsoft Billing

Purchasing Microsoft services directly from Microsoft rather than through a partner, typically at higher retail prices without additional support or optimisation services.

Dynamic User Licensing

The ability to automatically assign or remove licences based on user roles, department changes, or employment status. Helps prevent licence waste and ensures appropriate access.

E

E3 Licence

Microsoft 365 Enterprise E3 plan that includes core productivity applications, email, and basic security features. Often the optimal choice for knowledge workers who don't need advanced analytics or security tools.

E5 Licence

Microsoft 365's premium enterprise plan with advanced security, analytics, and voice capabilities. Many organisations over-purchase E5 licences when E3 plus selective add-ons would be more cost-effective.

Enterprise Agreement (EA)

Microsoft's volume licensing programme for large organisations, typically requiring 500+ licences with multi-year commitments. CSP alternatives can provide similar savings with more flexibility.

Endpoint Security

Protection for computers, mobile devices, and other endpoints that connect to corporate networks. Available through various Microsoft licence tiers or as standalone security products.

Exchange Online

Microsoft's cloud-based email service included in most Microsoft 365 plans. Can be purchased separately or as part of comprehensive productivity suites.

F

Feature Creep

The tendency to purchase higher-tier licences "just in case" users might need advanced features, leading to unnecessary costs. Regular licence reviews help identify and eliminate feature creep.

FinOps

Financial Operations methodology that brings together IT, finance, and business teams to manage cloud costs collaboratively. Emphasises accountability, optimisation, and cost transparency.

Frontline Worker Licences (F1/F3) Specialised Microsoft 365 licences designed for frontline workers who primarily need communication and basic productivity tools rather than full office applications. Significantly cheaper than standard business licences.

Free Trial vs Paid CSP Subscription

The difference between Microsoft's limited free trials and full paid subscriptions through CSP partners, which offer complete features, support, and often discounted pricing.

G

Governance Policies

Rules and procedures that control how cloud resources are provisioned, used, and managed within an organisation. Help prevent cost overruns and ensure compliance.

Group-Based Licensing

Automatically assigning licences to users based on their group membership or role rather than manual individual assignment. Reduces administrative overhead and ensures consistency.

H

Hybrid Cloud

Computing environment that combines on-premises infrastructure with cloud services, requiring careful licence management across both environments. Often provides cost and flexibility advantages.

Hybrid Benefit (Azure)

Microsoft licensing benefit allowing use of existing on-premises Windows Server and SQL Server licences in Azure, reducing cloud costs significantly.

High Availability Licensing

Licences and configurations required to ensure business-critical applications remain operational with minimal downtime. Often involves redundant systems and specialised licensing requirements.

I

Idle Resources (Azure)

Cloud resources that are provisioned but not actively used, continuing to generate costs. Regular monitoring and automatic shutdown policies can eliminate this waste.

Identity & Access Management (IAM)

Systems and processes for managing user identities and controlling access to resources and applications. Critical for security and often influences licensing decisions.

Intune (Endpoint Manager)

Microsoft's cloud-based device management service that helps organisations manage and secure employee devices. Available separately or included in certain Microsoft 365 plans.

K

Knowledge Worker Licensing

Licences appropriate for employees who primarily work with information and require full productivity applications. Typically requires Business Standard, E3, or higher-tier licences.

L

Licence Mobility

The ability to move software licences between different environments, such as from on-premises to cloud or between cloud regions. Provides flexibility and can reduce costs.

Licence Optimisation

The process of ensuring each user has the appropriate licence tier for their actual needs, eliminating over-licensing and reducing costs without impacting productivity.

Licence Pooling

Sharing licences among users who don't all need simultaneous access, reducing the total number of licences required. Applicable in certain scenarios with temporary or shift workers.

Local vs Global Admin Rights

The difference between administrative permissions that apply to specific services versus those that provide broad access across all Microsoft 365 services. Important for security and compliance.

M

Microsoft 365 Business Basic

Entry-level Microsoft 365 plan providing web-based Office applications and email without desktop applications. Suitable for users with limited productivity software needs.

Microsoft 365 Business Standard

Mid-tier business plan including desktop Office applications, email, and basic collaboration tools. Often the optimal choice for small to medium businesses.

Microsoft 365 Copilot

AI-powered productivity assistant that integrates with Office applications to help users create content, analyse data, and automate tasks. Requires additional licensing and AI readiness preparation.

Microsoft Teams Rooms Licensing

Specialised licences for conference rooms and shared spaces that use Microsoft Teams for meetings. Different pricing and requirements compared to individual user licences.

Multi-Geo Licensing

Licensing that allows organisations to store data in multiple geographic regions within Microsoft 365, often required for compliance or performance reasons.

N

Nonprofit/Charity Licensing

Discounted Microsoft licensing available to qualified charitable organisations, providing significant cost savings on productivity and cloud services.

NCE (New Commerce Experience)

Microsoft's updated licensing and billing platform that affects how licences are purchased, managed, and renewed. Impacts pricing and contract flexibility.

O

Over-Licensing

Purchasing more licences than needed or higher-tier licences than required, resulting in unnecessary costs. Common problem that regular audits can identify and resolve.

Orphaned Licences

Licences assigned to former employees or inactive accounts that continue generating costs. Regular licence hygiene helps identify and reclaim these licences.

P

Pay-As-You-Go (Azure)

Azure pricing model where customers pay only for resources actually consumed, providing flexibility but potentially higher costs than committed usage plans.

Power BI Licensing

Licensing for Microsoft's business intelligence and data visualisation tools, available as standalone products or included in certain Microsoft 365 plans.

Productivity Score (M365)

Microsoft 365 feature that measures how organisations use collaboration and productivity tools, helping identify optimisation opportunities and training needs.

Pro Rata Billing

Billing method that charges only for the portion of a billing period that services are actually used, common when adding or removing licences mid-cycle.

Q

Quarterly Licence Reviews

Regular assessments of licence usage and requirements to identify optimisation opportunities, ensure compliance, and manage costs. Best practice for maintaining efficient licensing.

R

Reserved Instances (Azure)

Azure pricing option that provides significant discounts in exchange for committing to specific resource usage for one or three years. Can reduce costs by up to 70% for stable workloads.

Rightsizing

Adjusting cloud resources or licence levels to match actual usage requirements, eliminating waste and reducing costs without impacting performance.

Role-Based Licensing

Assigning licence tiers based on job functions and actual software requirements rather than applying uniform licensing across all users. More cost-effective than one-size-fits-all approaches.

S

Security & Compliance Add-Ons

Additional security and compliance features that can be added to base Microsoft 365 licences, often more cost-effective than upgrading to premium licence tiers.

Shadow IT

Technology services used by employees without official IT department approval or knowledge, potentially creating security risks and redundant licensing costs.

SME Licensing

Licensing programmes and pricing specifically designed for small and medium enterprises, often providing better value than enterprise-focused options.

Software Asset Management (SAM)

Systematic approach to managing software licences throughout their lifecycle to ensure compliance, optimise costs, and reduce risks.

Subscription Lifecycle Management

Managing Microsoft subscriptions from initial purchase through renewals, modifications, and eventual termination to optimise costs and maintain compliance.

T

Tagging (Azure)

Applying metadata labels to Azure resources for cost tracking, management, and governance purposes. Essential for understanding and controlling cloud costs.

Tenant (Microsoft 365)

An organisation's dedicated instance of Microsoft 365 services, serving as the boundary for user accounts, data, and administrative control.

Trial-to-Paid Conversion

The process of moving from free Microsoft trials to paid subscriptions, often an opportunity to optimise licensing and pricing through CSP partners.

U

Unassigned Licences

Purchased licences that haven't been allocated to specific users, representing potential waste unless assigned or the licence count is reduced.

User Adoption Metrics

Measurements of how actively employees use licensed software features, helping identify optimisation opportunities and training needs.

V

Virtual Desktop Infrastructure (VDI)

Technology that provides desktop computing environments through virtual machines, potentially reducing licensing costs through shared resources.

VM Sizing (Azure)

Selecting appropriate virtual machine sizes based on actual performance requirements to balance cost and performance in Azure deployments.

Volume Discounts

Reduced per-unit pricing available for large licence quantities, often accessible to smaller organisations through CSP partners like Qwantro.

W

Windows 365 (Cloud PC)

Microsoft's cloud-based virtual desktop service that provides Windows desktop experiences through the cloud, with specific licensing requirements and costs.

Workload Optimisation

Analysing and adjusting how applications and services consume cloud resources to improve performance and reduce costs.

Z

Zero Trust (Licensing & Access)

Security model that assumes no user or device should be trusted by default, often requiring specific licensing for advanced security and compliance features.

Are You Ready to Take Control of Your Cloud Costs?

Book your complimentary Azure and Microsoft 365 cost assessment. Our specialists will analyse your environment and show you exactly where savings can be achieved, with no obligation.

Contact sales

We’d love to see how we can streamline your hiring together.

Contact sales

We’d love to see how we can streamline your hiring together.

Contact sales

We’d love to see how we can streamline your hiring together.