Experts Inside Licensing Manager Docs / docs / optimization action downgrade license

date: 2026-03-21

Optimization Action `downgrade_license`

This page explains when the engine selects downgrade_license, required evidence, and how downgrade savings are calculated.

Supported downgrade ladders

The current deterministic ladders are:

• M365_E5 -> M365_E3
• SPE_E5 -> SPE_E3
• ENTERPRISEPREMIUM -> ENTERPRISEPACK
• EMSPREMIUM -> EMS

Required conditions for downgrade_license

All relevant checks must pass:

• Candidate is on a supported ladder SKU.
• Candidate is not inactive_90d (otherwise full removal is preferred).
• Current assignment has no disabled service plans.
• App usage evidence is available at tenant level and user level.
• Candidate is not forced into review-only (unknown, heuristic_only, or low confidence).

Why this action is selected

• Downgrade is used when evidence indicates overprovisioning but not enough certainty for full removal.
• It protects service continuity while still reducing recurring cost.

Savings calculation

• Monthly savings = currentSkuPrice - targetSkuPrice.
• Annual savings = monthly savings * 12.
• Savings are omitted when:
  • either price is missing,
  • price delta is <= 0,
  • currencies mismatch.

Confidence behavior

• Downgrade confidence is capped at medium.
• This guardrail reflects the operational risk of changing SKU tiers versus simple reclaim.