When provisioning users to Microsoft Office 365, the provisioning flow fails with the following error visible in the Okta dashboard:

Automatic provisioning of user <userName> to app Microsoft Office 365 failed: Unable to assign licenses to the user. These Licenses have no available seats: "Office 365 Business - <O365 license name>. These licenses have only suspended (unassignable) seats left: Please fix this on the Tasks Page."
 

• Microsoft Office 365
• Provisioning

The automatic user assignment fails due to a lack of free license seats in Microsoft Office 365. One common reason is due to deactivated Microsoft users still keeping the licenses.

Verify license counts in the Microsoft Office 365 Administration Portal, and confirm all deactivated users within O365 have had their licenses removed to replenish license counts.