The New York City Housing Authority (NYCHA) is the largest public housing authority in North America, responsible for providing affordable housing to hundreds of thousands of New Yorkers. With more than 11,000 employees and over 14,700 licensed Microsoft users — spanning knowledge workers on M365 G5 and frontline staff on M365 F3 — NYCHA’s IT environment is both massive and operationally critical.
When NYCHA’s Microsoft Enterprise Agreement came up for renewal, leadership engaged UMS through its existing relationship with the City of New York to review licensing spend before terms were locked in. UMS had already been providing software asset management services to NYC agencies for over a decade. Within three weeks, UMS identified over 10,000 inactive or unassigned licenses — a finding that translated into $495K in Year 1 savings and $2.2M in verified savings over the five-year EA term. That was just Phase 1 of a broader engagement now spanning Azure cloud optimization and a $17M+ multi-vendor contract portfolio across 16 publishers.
The Challenge
NYCHA’s Microsoft licensing estate had grown organically over years of operational expansion, staff turnover, and evolving technology requirements. The result was a licensing environment with several compounding problems:
- Massive inactive license inventory — More than 10,000 licenses across M365 G5, F3, Exchange Online, and F5 Security + Compliance were assigned to accounts with little or no activity. Many belonged to former employees or shared accounts that were never deprovisioned.
- Over-provisioned premium tiers — 8,202 M365 G5 licenses were purchased at $31.59/user/month, but usage analysis showed that a significant portion of users only needed G3-level functionality. Enterprise Mobility + Security G5 had 800 licenses with only 4 actively assigned.
- Sprawling multi-vendor portfolio — Beyond Microsoft, NYCHA was managing $17.1M in annual IT spend across 32 contracts with 16 vendors — including Oracle ($3.6M), IBM ($2.7M), Salesforce ($1.9M), Workday ($1.5M), and ServiceNow ($822K) — with renewal dates scattered throughout the year and limited centralized visibility into contract terms or optimization opportunities.
The IT team lacked a unified view of which licenses were active, which contracts were approaching renewal, and where the highest-impact savings opportunities existed. Without that clarity, leadership couldn’t reduce costs without risking operational disruption to housing services that hundreds of thousands of residents depend on daily.
How UMS Solved It
UMS leveraged its decade-long relationship with the City of New York and deep expertise in Microsoft licensing optimization to move quickly. The engagement followed a phased approach, starting with the highest-impact, most time-sensitive area: the Microsoft EA renewal.
Step 1: Usage Analysis Across 14,700+ Users UMS pulled M365 usage reports and cross-referenced assigned licenses against actual activity data across Office, Email, SharePoint, Teams, and OneDrive over 90- and 180-day windows. Every user account was categorized by activity level — active, low-usage, dormant, or no activity reported — and mapped to their assigned license tier.
Step 2: Waste Identification The analysis surfaced three major categories of addressable waste:
| Category | Root Cause | Scale of Waste |
|---|---|---|
| M365 G5 licenses | Inactive/departed employees never deprovisioned | 983 licenses flagged for removal |
| F3 + Exchange Online + F5 Security bundles | Frontline worker accounts with no activity | 2,900+ inactive per product |
| Dynamics 365 Case Management | Over-provisioned beyond active caseload | 165 of 276 seats unassigned |
Additionally, UMS identified that 800 Enterprise Mobility + Security G5 licenses had only 4 active assignments, and 800 Office 365 G5 licenses had zero assignments — representing pure waste carried forward from prior renewal cycles.
Step 3: Renewal Rightsizing UMS worked with NYCHA’s IT and procurement teams to reduce renewal quantities to match verified active usage. M365 G5 was reduced from 8,202 to 7,219 seats. F3, Exchange Online, and F5 Security + Compliance bundles were each reduced from 6,500 to 6,395. Dynamics 365 Case Management dropped from 276 to 111 seats. Critically, no active users lost access to tools they were using day-to-day.
Step 4: EA Negotiation and Execution UMS provided benchmarking data and negotiation support through the contract renewal process, ensuring NYCHA locked in optimized quantities at competitive rates through the New York State OGS contract vehicle. The executed Year 1 order came in at $5.23M — down from a $5.72M cost basis — a 9% reduction that compounds over the five-year EA term.
Results
| Metric | Before | After | Impact |
|---|---|---|---|
| Year 1 Microsoft EA spend | $5.72M | $5.23M | $495K saved (9%) |
| 5-year projected EA spend | $31.96M | $29.74M | $2.2M saved |
| M365 G5 license count | 8,202 | 7,219 | 983 reclaimed |
| Dynamics 365 Case Mgmt seats | 276 | 111 | 165 reclaimed (60%) |
| Inactive licenses identified | — | — | 10,000+ flagged |
The savings were verified through Microsoft billing reconciliation and confirmed in NYCHA’s executed EA renewal documentation. The first renewal invoice reflected the full cost reduction.
Key insight: The initial optimization focused on quantity reduction — the lowest-risk, highest-certainty savings lever. UMS also identified a potential transition from M365 G5 to M365 G3 with targeted add-ons (Defender for Office 365 P2 and Entra ID P2) that could unlock an additional $6.3M in savings over years 2-5 of the EA — bringing total potential Microsoft savings to over $8M across the agreement term.
Beyond Microsoft: Multi-Vendor Portfolio Optimization
The Microsoft EA renewal was Phase 1 of a broader engagement. NYCHA’s full IT vendor portfolio spans $17.1M in annual spend across 16 vendors and 32 contracts, all of which UMS is now reviewing for optimization:
- Oracle ($3.6M) — Maintenance renewals, PaaS/IaaS, Exadata support
- IBM ($2.7M) — Maximo application licensing
- Salesforce ($1.9M) — CRM subscriptions, Mulesoft, LegalStratus
- Workday ($1.5M) — HR platform subscription
- Interloc ($1.3M) — Facilities management software
- ServiceNow ($822K) — ITSM platform renewal
- Azure ($1.77M) — Cloud infrastructure optimization targeted for Phase 2
UMS is also evaluating contracts with Armis, Veritas, Cisco, ZScaler, Palo Alto, Adobe, DocuSign, and Tableau — each with upcoming renewal windows where optimization analysis can drive additional savings.
What Made This Work
Three factors differentiated this engagement:
- Existing City relationship — UMS’s 25-year partnership with New York City provided institutional knowledge of NYC procurement processes, OGS contract vehicles, and OTI governance requirements. That meant zero ramp-up time and immediate credibility with NYCHA stakeholders.
- Usage-based methodology — Instead of relying on contract entitlements or vendor-reported data, UMS built the optimization model from actual 90- and 180-day usage data across every licensed user. This made every recommendation defensible and reduced internal pushback.
- Shared savings alignment — UMS operates on a 30% shared savings model, meaning NYCHA pays nothing upfront and UMS’s compensation is directly tied to verified results. This aligned incentives from day one and eliminated procurement risk.
See also: How NYC has saved $800M+ over 25 years through a similar long-term optimization partnership.