Where Has My Licence Gone?!

"Who removed my licence?"
"Probably Microsoft. Your 30-day grace period has likely expired..."

Hi All,

Recently one of my clients reported that some users lost their O365 licence. They were working yesterday and no longer could log on today - the licence was wiped. Completely. No prior notice.

What was going on?

I searched the audit log. I could see the admin re-assigning the licence so that the user can work, but no trace of its removal.

To cut it short, it ended up on Microsoft's laps. After a couple of weeks of log analysis and investigation, it turned out that following a hybrid mailbox on-boarding, the O365 licence failed to be applied to a small group of users. Even though unlicensed, they were able to connect and use their e-mail because they were in the 30-day grace period. Once the 30-day grace period ended, the mailbox has been disconnected

Why didn't I see an entry in the audit log? Simple: A licence removal event didn't occur because there was no licence to remove in the first place - remember, the license assignment failed. Going back as far as when the mailbox was migrated, we could see an audit log entry for the failed attempt assigning a licence. This can happen when scripting it, and it is easily missed, especially when you have lots of accounts.

While this resolved the mystery, it also revealed a couple of shortcomings of O365:

• We couldn't tell from the O365 audit log entries what licences were assigned or removed from the user. Microsoft pointed out during the case that O365 and Azure maintain separate audit logs, and the Azure log is more detailed. Not so the O365 log. You can see the activity though and who actioned it. NOTE: It may take up to 12 hours for the action to appear in the log.
• O365 does NOT alert about the imminent end of the 30-day grace period.
• Microsoft has very little documentation about the 30-day grace period.

On the topic of documentation, the engineer who worked on the case passed me this link, which states (clutter removed by me):

Assume that you have a hybrid deployment of Microsoft Exchange Online in Microsoft Office 365 and on-premises Microsoft Exchange Server...

If a license is not assigned to the user, the mailbox may be disconnected...

This issue occurs if the mailbox was migrated to Exchange Online as a regular user mailbox ... If the user isn't licensed, and if the 30-day grace period has ended, the mailbox is disconnected...

Now that I know what to look for, I've come across this link which states:

After you create a new mailbox using the Exchange Management Shell, you have to assign it an Exchange Online license or it will be disabled when the 30-day grace period ends.

Takeway #1: Always check licences after a mailbox on-boarding in a hybrid migration.

Takeway #2: Monitor your users regularly for their licensed status. Automatic alerting may be flaky, so if you are a developer then you may want to rock up an application and use the audit APIs to extract data and send alerts.

Takeawy #3: You need to search the correct audit log. There are a couple Security and Compliance centers in different places on the portal. The one you're after is under Admin centers | Security & Compliance, then in the new window navigate to Search & Investigation | Audit Log Search. 

Once there, select to search for the Update user and Changed user license activities in the User administration activities section:

Happy auditing!