Microsoft 365 migration into updated license allocation model

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Prior to Smart Provisioning, Microsoft provided customers with licenses that were not purchased. This was done to avoid interruptions in Microsoft 365 services as the customer stepped up and assigned licenses. These unused overages caused a compliance risk, so they’re being removed from the system to protect the customer and help them return to parity with what they have purchased. To avoid programmatically unintended license consumption, an updated License Overallocation process, formerly referred to as Smart Provisioning, was introduced in October 2019.

Beginning April 1, 2021, Microsoft Enterprise Agreement (EA) customers with agreements created prior to October 25, 2019 will see the removal of unused overages made available prior to the updated overallocation process.

For customers who haven’t transacted a qualifying license transition order, any existing (fixed-value) unused overallocation will be reset to zero from early April 2021. Customers need to do the following to prepare for the change:

  • If customers only assign licenses using the Microsoft 365 Admin Center user interface, this message is for awareness only.
  • If customers use license assignment workflow automation, for example via PowerShell scripting, and their automation logic permits assigning more licenses than they own, they’ll need to update the automation logic to avoid an overallocation.
  • To avoid potential process failure, customers should update the automation logic before early April 2021.
  • Note that already licensed users won’t see any loss in or impact on their service.
  • If customers use group-based licensing, they should periodically verify that the available licenses are adequate for their group membership counts.
  • If customers anticipate having an insufficient number of licenses to meet their needs, they might be able to place a license reservation on the Microsoft Volume Licensing Service Center or place an order though their reseller.

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