Locking an account doesn’t stop the bill. How Microsoft 365, Copilot, and Oracle licenses keep charging long after anyone uses them, and how to find them before your renewal does.
In short: A ghost seat is a paid software license assigned to an account that is disabled, blocked or no longer used. In Microsoft 365, blocking a user’s sign-in does not remove their license, so unused Microsoft 365 licenses keep billing until someone releases them, and they are counted again at every renewal and true-up.
Somewhere in your Microsoft 365 tenant, there is an account that belongs to someone who no longer works for you.
Maybe they left in the spring. Maybe they retired, or moved to a competitor, or finished a contract nobody renewed. On their last day, someone in IT did exactly what the security policy said: they blocked the account. Nobody could sign in as that person again. The door was locked, but the meter kept running.
Every month since, your organization has paid for that person’s Microsoft 365 license. Their mailbox, their apps, their seat at a table they will never sit at again. No alert went off because nothing was broken. The account was secure. It just wasn’t free.
We call these ghost seats. And at one healthcare services company, there were about 1,100 of them.
A Thousand Empty Chairs
The company had a sensible rule: everyone gets email. When people left or became inactive, IT disabled their accounts, as any well-run security team should.
What nobody did was release the licenses. When we looked at the tenant, roughly 1,100 switched-off accounts were still licensed. At list price, that came to close to $500,000 a year, spent on people who could not even log in.
It is tempting to look for someone to blame in a story like that. There isn’t anyone. Disabling an account and releasing a license are two separate steps, and they usually belong to two separate teams. Security owns the first one, and it happens on the employee’s last day. The second one waits for someone to confirm the mailbox is no longer needed. That confirmation rarely comes. So the license stays, and next year it gets counted again.
How a Locked Door Keeps Billing
Why doesn’t blocking a Microsoft 365 user remove their license?
Microsoft’s own guidance makes the gap easy to see. Its checklist for removing a former employee has seven steps. Blocking sign-in is step one. Removing the license is step six. In between come saving the mailbox, wiping devices, forwarding email and handing files to a colleague, each with a perfectly good reason to wait.
Most organizations do step one well, because it protects them. Step six protects only the budget, and nobody is watching it the moment someone leaves.
The same quiet pattern shows up in other places too. An account disabled in on-premises Active Directory can stay licensed in the cloud. A departing manager’s mailbox gets converted to a shared mailbox so the team can keep reading it, and the license stays attached just in case. Someone goes on leave, their account is blocked “temporarily,” and nobody ever comes back to it.
None of these feel like spending decisions. That is exactly why they cost so much.
How many ghost seats are in your tenant? Our free Ghost Seat Scan finds them and puts a dollar figure on each license type, with results in five business days.
The Most Expensive Seats in the House
Ghost seats are rarely the cheap ones.
At a distribution company we worked with, roughly 700 Microsoft 365 E5 licenses, the most expensive suite most organizations buy, were assigned to accounts that were blocked from signing in. Every one of those seats carried the highest possible price for no use at all.
The same company had a second kind of ghost. Hundreds of frontline workers held E5 licenses when a frontline license covered everything they actually did. Nobody had set out to overspend. The licenses had simply never been matched to the work. Matching each person to the license their work required was worth roughly $350,000 a year, before anyone had a single price conversation with Microsoft.
And then there is the newest ghost in the building: Copilot.
Many organizations bought Microsoft 365 Copilot for whole departments, hoping adoption would follow. The Copilot usage report in the Microsoft 365 admin center usually tells a more honest story. There is a core group who use it every day, and a long tail who opened it once, were curious for a week, and went back to the way they worked before.
Those idle seats are about to get more complicated. For new Copilot Business purchases through Microsoft’s Cloud Solution Provider (CSP) partners, usage-based billing will be switched on by default sometime between January and March 2027, with a default limit of 4,000 Copilot Credits per user per month on top of the seat price. It is far easier to get the seat count right before that happens than to explain two kinds of Copilot cost afterwards.
Why the Ghosts Grow Stronger in December
How do unused licenses affect a Microsoft renewal or true-up?
In A Christmas Carol, the Ghost of Christmas Past doesn’t threaten Scrooge. It simply shows him what he chose not to look at.
The Ghost of Licenses Past works the same way. It doesn’t rattle chains. It renews.
When your agreement comes up for renewal or true-up, the starting quantity is almost always last year’s quantity. Every ghost seat in your tenant becomes part of that number. It gets priced at next year’s rates and locked in for another one to three years. This December, that happens just as several Microsoft promotions expire on December 31 and new 2027 price increases begin to land. Carrying ghosts forward has rarely cost more.
The best time to release a ghost seat is before anyone counts it. For most organizations with a year-end renewal, that window is the next few weeks.
Oracle’s Ghosts Don’t Even Need a Seat
Can you owe Oracle for database options you never bought?
If Microsoft makes ghost seats easy to accumulate, Oracle makes them easy to create without buying anything at all.
Oracle Database Enterprise Edition installs the code for nearly every extra-cost option and management pack by default, and it never asks whether you have paid for them. Using a feature is what creates the license obligation, not buying it. The database quietly records that use in a view called DBA_FEATURE_USAGE_STATISTICS, with a first and last usage date that never expires.
Picture a database administrator on a bad afternoon, chasing a slow query. They open a performance page in Oracle Enterprise Manager to find the problem. They fix it and move on. Years later, that one click can become the first line of an Oracle audit, priced across every processor on the server and backdated to the first day of use.
The one built-in safeguard, a parameter called CONTROL_MANAGEMENT_PACK_ACCESS, covers only two packs, and on Enterprise Edition it ships switched on. Our colleague Sharon Idaraji tells that story in full, including how to check your own databases, in Oracle Database Options Are Licensed by Use, Not Purchase.
How to Find Unused Microsoft 365 Licenses (and Other Ghosts)
The good news is that unused Microsoft 365 licenses and other ghost seats are easy to find once you go looking. Most of the checks need nothing more than the admin tools you already have:
- Blocked accounts with paid licenses. Export your users from the Microsoft 365 admin center or Microsoft Entra ID and compare sign-in status with assigned licenses.
- Licensed users with no recent sign-in. Anyone silent for 90 days deserves a second look.
- Shared mailboxes that still carry a license. Converted mailboxes often keep one they no longer need.
- E5 holders who use E3 or frontline features. Light users and frontline staff are the usual mismatch.
- Copilot seats with no activity in the last 30 days. The usage report shows them.
- Oracle option and pack usage. Run Oracle’s published usage script and review what the database has already recorded.
None of this commits you to anything. It simply gives you your own number before a vendor gives you theirs.
The Ending Isn’t Written Yet
Scrooge’s story has a happy ending because he wakes up on Christmas morning and realizes there is still time.
There is still time here too. Some ghost seats can be released this week and handed to new hires, so you stop buying more. Others need a quick decision about data before they go. The biggest prize comes at renewal, when you can commit to the licenses you actually need instead of the ones you happened to carry forward.
Almost every organization we look at has ghost seats. The only real question is whether you find them before your next renewal counts them, or after.
Free Ghost Seat Scan · Book by December 12
Find Your Ghost Seats Before December 31
Our Ghost Seat Scan shows how many paid Microsoft 365 and Copilot licenses sit on disabled, blocked or unused accounts, with an estimated annual cost by license type. It starts with a 20-minute call. If you want to go ahead, we work from read-only access to your license and sign-in reports, granted by your Microsoft 365 admin, and deliver the results within five business days.
20-minute call • Read-only access • Results in 5 business days
Book by December 12 to have your results before the holidays.
Frequently Asked Questions About Unused Microsoft 365 Licenses
Does blocking sign-in remove a Microsoft 365 license?
No. Blocking sign-in stops the person from accessing Microsoft 365, but the license stays assigned and keeps billing. Microsoft’s own offboarding checklist treats blocking sign-in (step one) and removing the license (step six) as separate steps, so an admin has to release the license on purpose.
What is a ghost seat?
A ghost seat is a paid software license that nobody can use or nobody does use: a license on a disabled or blocked account, a premium license on a light user, or an add-on such as Copilot that was assigned but never adopted.
How do I find unused Microsoft 365 licenses?
Export your users from the Microsoft 365 admin center or Microsoft Entra ID and compare sign-in status and last sign-in date with assigned licenses. Then check shared mailboxes that still hold a license, E5 users who only use E3 or frontline features, and Copilot seats with no activity in the last 30 days.
Does a shared mailbox need a Microsoft 365 license?
In most cases, no. A shared mailbox generally needs a license only if it is larger than 50 GB, has an archive, or is placed on litigation hold. Converted mailboxes often keep a license they no longer need.
When does Copilot Business usage-based billing start?
For new Microsoft 365 Copilot Business purchases through Cloud Solution Provider (CSP) partners, Microsoft plans to switch usage-based billing on by default between January and March 2027, with a default limit of 4,000 Copilot Credits per user per month that admins can adjust.
Sources:
- Microsoft Learn, Remove a former employee: overview
- Microsoft Partner Center, November 2026 announcements (usage-based billing for new Microsoft 365 Copilot Business licenses, updated November 3, 2026)
- MetrixData 360, Oracle Database Options Are Licensed by Use, Not Purchase
- MetrixData 360, Top Takes: Microsoft Licensing Changes, November 2026
- Client examples are from MetrixData 360 engagements, anonymized and rounded.