The tolerated pain: the top plan, for everyone, just in case
Software pricing pages are designed to make the higher plans look sensible. The middle option is marked "most popular". The top option promises advanced reporting, automation, extra storage and priority support. The basic plan looks thin by comparison. Faced with that choice, many businesses pick the premium plan and give it to every user, because nobody wants to be the person who bought too little.
The result is a business paying premium prices for people who use the software for email, a shared calendar and a few documents. The advanced features that justified the decision are used by a handful of staff, or by nobody at all. The difference between what was bought and what is used is paid every month.
This article looks at that buying decision: choosing a higher plan than the work requires. It is related to, but different from, unused software licences, where the waste is seats nobody uses. Here the seats are used. They are simply more expensive than they need to be.
Why businesses overbuy
- Fear of missing a feature. Buying the top plan avoids the risk of discovering later that something important is missing.
- One plan is simpler. Giving everyone the same plan avoids the administrative work of deciding who needs what.
- The demo sold the top tier. Sales demonstrations usually show the most advanced features. We cover this risk in how to buy business software without letting the demo make the decision.
- Nobody checks afterwards. Once the plan is running, there is no point at which anyone compares features paid for with features used.
- Downgrading is harder than upgrading. Vendors make it easy to move up and harder to move down.
Why downgrading feels hard
The last point deserves attention, because it explains why overbuying tends to persist.
Microsoft's documentation on changing Microsoft 365 for business plans explains that the automatic plan change is available only to a plan with the same data-related services or a higher version. Moving to a plan with fewer services has to be done manually, and Microsoft advises backing up any data you want to keep first.
Google Workspace's administrator help shows a similar pattern. On an annual or fixed-term plan, a business can downgrade to Business Standard only after switching to the flexible plan. Google also notes that features such as data loss prevention or Vault can be restored within 51 days if the business upgrades again.
None of this makes downgrading impossible. But it adds friction, and friction is often enough to keep a business on a plan it does not need.
Operational symptoms
- Every user has the same plan, regardless of role.
- Nobody can name the premium features the business relies on.
- Advanced modules are switched on but never configured.
- Staff use separate free or cheap tools for jobs the premium plan supposedly covers.
- The plan was chosen at purchase and has not been compared with usage since.
How the pain becomes money
- Technology waste: the price difference between the plan bought and the plan needed, multiplied by every user and every month.
- Margin erosion: software costs that rise with headcount reduce the margin on every new hire.
- Scaling cost: each new employee is automatically given the most expensive option.
- Opportunity cost: money spent on unused features is not available for tools or training that would make a difference.
An illustrative cost model
The figures below are illustrative assumptions for an unnamed South African firm with 50 staff on a single premium plan. They are not real vendor prices; use your own invoices.
| Group | Users | Needs | Assumed price difference | Annual overspend |
|---|---|---|---|---|
| Office and admin staff | 20 | Basic plan is enough | R260 per user per month | R62,400 |
| Field and warehouse staff | 15 | Basic plan is enough | R260 per user per month | R46,800 |
| Managers and specialists | 15 | Premium plan justified | None | R0 |
| Total | 50 | R109,200 |
Checking the arithmetic: 20 × R260 × 12 = R62,400; 15 × R260 × 12 = R46,800; R62,400 + R46,800 = R109,200. If the business grows by ten staff a year and gives each one the premium plan by default, the overspend grows by up to 10 × R260 × 12 = R31,200 a year.
The saving is not automatic. Some premium features, especially security and device management, may be worth paying for across the whole business. The point is to make that decision deliberately, feature by feature, rather than by default.
A worked example
Consider an unnamed engineering supplier in Gauteng, used here as an illustrative case. When it moved to a cloud suite four years ago, the owner chose the top business plan for all 38 staff because it included advanced compliance tools and larger storage. A later review found that only the finance team and two directors used any feature exclusive to that plan. Workshop staff used the suite for email and timesheets. The sales team used it for email, calendars and shared quotes. None of them had ever opened the advanced tools. The review took one afternoon: list the premium-only features, ask each team leader which they used, and compare the answers with usage reports. The decision that followed was simple: keep the premium plan for the people who need it, and move everyone else to the plan that matches their work at the next sensible point in the billing cycle.
When it becomes commercially urgent
- Software costs per employee are rising faster than headcount.
- A large annual renewal or a vendor price increase is coming up.
- The business is hiring a large group of staff with simple software needs.
- Finance is reviewing overheads and software is one of the larger lines.
What better looks like
Better plan selection starts from roles, not from the pricing page.
- Match plans to roles. Microsoft's own documentation notes that some businesses need different users licensed for different plans. Mixing plans by role is a normal, supported approach.
- Name the premium features. For each premium plan, list the specific features that justify it and who uses them.
- Check usage. Microsoft's admin center usage reports, for example, show activity over 7, 30, 90 and 180 days. Most platforms offer similar reporting.
- Prefer flexible terms when unsure. Start lower and upgrade when a real need appears, especially where moving down later is harder than moving up.
- Make the default plan the cheapest one that works. New starters get the basic plan unless a manager asks for more, with a reason.
Our guide before you buy another tool, ask these questions gives a fuller checklist for purchasing decisions.
Practical first steps
- List every subscription where all users are on the same plan.
- For each, write down the features that are only available on the higher plan.
- Ask each team which of those features they actually use.
- Group users by need and calculate the difference if each group were on the lowest suitable plan.
- Check the vendor's rules for changing plans, including annual commitments and data that might be lost, before making changes.
- Change the default plan for new starters.
Bottom line
Buying the premium plan for everyone feels safe, but it means paying top prices for basic work. The overspend is small per user and large across the business, and it grows with every hire. Matching plans to real needs, and making the cheapest workable plan the default, turns a hidden recurring cost into a deliberate choice.
Sources and further reading
- Upgrade or change to a different Microsoft 365 for business plan (last verified 10 October 2026)
- Switch to Business Standard edition - Billing & subscriptions - Google Workspace Help (last verified 10 October 2026)
- Microsoft 365 Admin Center Usage Reports Overview - Microsoft 365 admin (last verified 10 October 2026)
Related Mellorca reading
- Automatic Software Renewals: The Cost of Paying for Yesterday's Requirements
- Subscriptions That Outlive the Employee: The Cost of Orphaned Software
- Paying for Tools You Already Own: The Cost of Underused Software Platforms