Office 365 lets you add and change subscriptions at will (well, pretty much).  This is all fine and dandy but you can start to make a real hash of things if you are not careful.  As an example, consider the following:

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This is a customer of ours and their subscription listing is not atypical, many O365 user organizations have similar showing in their subscription listing.  In this case the customer has mixed different subscription levels (P1, E1, E3, etc) as well as different subscription types (monthly and product key; product key is generally a one year subscription bought as a SKU from distribution).  As you can see, expiry/renewal dates are all over the place.

Microsoft does not have any sort of methodology to “collapse” this kind of a subscription “mess” into a single subscription with one expiry/renewal date nor do they have a mechanism where you can make everything expire/renew on the same date (sometimes called “co-termination”).  What you see is pretty much what you get.

You can manage this a bit by doing whatever you can do to reduce the number of subscriptions that you have.  In the above example, we are going to move the E3 users in the Product Key subscription that expires on April 29th to the E3 monthly subscription .   We will do the same thing with the E1’s and P1’s a bit down the road.  The idea behind this being we can reduce the confusing number of subscriptions down to the minimum required to ensure all users are licensed with a subscription appropriate to their needs.

The frustrating piece, here, is the fact that while the different subscriptions like E3 product key and E3 monthly subscription display on the Billing screens, O365 does not make a differentiation between the two subscriptions in the backend; an E3 subscription is just that, an E3.  So, when I go to shuffle user licenses around I don’t actually see two types of E3’s (product key and monthly), I just see the aggregate number of E3 subscriptions and the “available” number is actually what is available out of the aggregated E3’s.  This means that I can’t easily pick the “right” subscription to apply to a user as I might apply a product key subscription when I really want to apply a monthly subscription.  To add insult to injury, even Powershell can’t “see” the difference between the two!

Therefore, the only way I can accurately license users for the “correct” subscription type in this instance is to hold off adding the additional 62 monthly subscriptions until the product key subscriptions actually expire.  That way, once I have added the 62 monthlies by increasing the license count on the monthly subscription, the only subscriptions that will be displayed for selection on the user licensing screens will be the available monthlies; the product key subscriptions will be expired and not selectable.  And, by extension, if I was going to perform some sort of “bulk licensing” run with Powershell, the only subscriptions that it could pick up as “available” would be the newly added monthlies.

What this proves is that you must stay on your toes to keep your O365 licensing as simple and as clear as possible.  When you add users, make sure you add in to existing subscriptions wherever possible.  And ensure your subscriptions are set to auto-renew unless you really don’t want the subscription to roll over into a new subscription-year as this will save a lot of headaches.  This housekeeping is unavoidable if you want to keep your subscriptions “clean”.

And for those of you that are wondering about the differences between “Product Key” subscriptions and “monthly” subscriptions, be aware that there really isn’t any.  Microsoft provides Product Key SKU’s for O365 and Azure services that can be bought through the Volume Licensing channels.  The reason they do this is many large organizations like to manage their licensing for all things Microsoft through the various Microsoft Volume Licensing channels.   Product Key subscriptions don’t include features not included monthly subscriptions, it is just another way to pay for licensing.  Microsoft does provide a tiny incentive for purchasing subscriptions on a yearly bases (vs monthly) or via Product SKU but the incentive is very small, typically only a percent or two.  That may be a reasonable savings on a large number of licenses (like in the thousands or even tens of thousands) but it is not worth it at the small numbers typically associated with small to medium business.  So, in the above example, there is no real benefit to the customer to go with Product Key subscriptions going forward.

I hope all of this helps eliminate a bit of confusion about O365 subscriptions.

Office 365 – Subscriptions and Housekeeping
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