This chapter provides a comprehensive comparison of Microsoft 365 Business plans (Basic, Standard, Premium) versus Enterprise plans (E3, E5), covering features, licensing, and use cases. This is a critical topic for MS-900, as approximately 15-20% of exam questions involve plan selection and feature mapping. You will learn the exact differences in app availability, security capabilities, compliance tools, and pricing models. By the end, you will be able to recommend the appropriate plan for any given scenario.
Jump to a section
Think of Microsoft 365 plans as different models of cars from a single manufacturer. Business Basic is like a basic sedan with a manual transmission and no air conditioning — it gets you from point A to point B (email, web apps) but lacks comfort and power. Business Standard is a mid-range sedan with automatic transmission and AC — it adds the office suite (desktop apps) for a smoother ride. Business Premium is a fully loaded SUV with leather seats, GPS, and a powerful engine — it includes advanced security features (Microsoft Defender for Business) and device management (Intune). The Enterprise plans (E3, E5) are like a fleet of luxury limousines and armored vehicles designed for large organizations. E3 is a high-end sedan with all standard luxury features (compliance, advanced analytics). E5 is the armored limousine — it adds advanced threat protection, eDiscovery, and voice capabilities (Phone System). Just as you wouldn't buy a limousine for a family of four, you wouldn't choose E5 for a 10-person startup. The exam expects you to match the right 'car' to the organization's size, compliance needs, and budget.
Overview of Microsoft 365 Plans
Microsoft 365 offers two main licensing families: Business and Enterprise. Business plans are designed for organizations with up to 300 users, while Enterprise plans are for larger organizations or those needing advanced compliance and security features. The exam focuses on understanding the feature sets and which plan includes what.
Microsoft 365 Business Basic
Business Basic is the entry-level plan, priced at $6.00/user/month (as of 2025). It includes:
- Exchange Online (50 GB mailbox) - Microsoft Teams - SharePoint Online - OneDrive for Business (1 TB/user) - Web and mobile versions of Office apps (Word, Excel, PowerPoint, Outlook) - Microsoft 365 Defender for Office 365 (basic) - Azure Information Protection (Plan 1) Key limitation: No desktop Office apps. Users must use web versions or separate Office 2021/2024 licenses. This plan is ideal for frontline workers who only need email and collaboration via browser.
Microsoft 365 Business Standard
Business Standard ($12.50/user/month) adds the desktop Office apps (Office 365 ProPlus) to the Business Basic feature set. It includes:
- All Business Basic features - Full Office desktop apps (Word, Excel, PowerPoint, Outlook, Publisher, Access) for up to 5 devices per user - Bookings - MileIQ (for tracking mileage) - Clipchamp (video editor) This plan is suitable for knowledge workers who need full Office functionality offline.
Microsoft 365 Business Premium
Business Premium ($22.00/user/month) adds advanced security and device management:
- All Business Standard features - Microsoft Defender for Business (endpoint detection and response) - Microsoft Intune (mobile device management and mobile application management) - Azure Active Directory Premium Plan 1 (conditional access, self-service password reset) - Windows 365 (Cloud PC) for up to 2 users (if using Windows 365 Business) - Microsoft Purview Information Protection (sensitivity labels, data loss prevention) - Microsoft 365 Backup (preview at time of writing) This plan is designed for SMBs that need enterprise-grade security without moving to E3.
Microsoft 365 E3
Enterprise E3 ($36.00/user/month) is the baseline enterprise plan. It includes:
- All Business Premium features (except Defender for Business is replaced by Microsoft 365 Defender for Office 365 Plan 2 and Defender for Endpoint Plan 2) - Office desktop apps (same as Business Standard) - Exchange Online (100 GB mailbox, unlimited archive) - SharePoint Online (unlimited storage, 1 TB + 10 GB per licensed user) - OneDrive for Business (1 TB/user, up to 5 TB with admin approval) - Microsoft Teams (advanced meeting capabilities, live captions, recording) - Azure Active Directory Premium Plan 1 - Microsoft Purview (eDiscovery, retention policies, DLP) - Microsoft Viva Insights (personal insights) - Windows 10/11 Enterprise (if Windows is included in subscription) Key differences from Business Premium: larger storage limits, more advanced compliance tools (eDiscovery, retention), and Windows Enterprise license.
Microsoft 365 E5
E5 ($57.00/user/month) is the premium enterprise plan, adding advanced security and analytics:
- All E3 features - Microsoft 365 Defender (integrated threat protection across email, endpoints, identities, and cloud apps) - Azure Active Directory Premium Plan 2 (Identity Protection, Identity Governance, Privileged Identity Management) - Microsoft Purview (advanced eDiscovery, communication compliance, insider risk management, audit (advanced), records management) - Microsoft Viva Insights (manager and leader insights) - Power BI Pro - Microsoft Teams Phone System - Audio Conferencing (for Teams) - Microsoft Defender for Cloud Apps - Microsoft 365 Cloud App Security - Microsoft 365 Data Loss Prevention (advanced) E5 is for organizations with strict compliance requirements (e.g., financial services, healthcare) and those needing integrated security.
Licensing and Pricing Differences
Business plans are per-user per-month and include up to 300 users. For >300 users, Enterprise plans are mandatory.
Enterprise plans have no user limit and offer additional storage and compliance features.
Add-on licenses (e.g., Microsoft 365 E5 Compliance, E5 Security) can be layered on E3 to get specific E5 features without full E5.
Windows 10/11 Enterprise is included in E3/E5 but not in Business plans (Business Premium includes Windows 365 Business, not Windows OS license).
Feature Mapping for Exam
Key features to map:
Desktop Office apps: Business Standard, Premium, E3, E5 (not Business Basic)
Advanced threat protection: Business Premium (Defender for Business), E5 (Microsoft 365 Defender)
Device management (Intune): Business Premium, E3, E5
Compliance (eDiscovery, retention): E3, E5 (Business Premium has limited Purview features)
Phone System: E5 only (or add-on for E3)
Audio Conferencing: E5 only (or add-on)
Power BI Pro: E5 only
Azure AD Premium P2: E5 only (P1 in Business Premium, E3)
Exam Trap: Business vs Enterprise Feature Overlap
Many candidates assume Business Premium has all E3 features. It does not. Business Premium lacks:
Unlimited Exchange archive (100 GB in E3 vs 50 GB in Business Premium)
Advanced eDiscovery (only basic in Business Premium)
Communication compliance (E5 only)
Insider risk management (E5 only)
Windows Enterprise license
Advanced audit (E5)
Microsoft 365 Defender (E5) – Business Premium has Defender for Business, which is a subset.
Exam Trap: User Count Limit
Business plans are limited to 300 users. A question might describe a company with 500 employees and ask for the appropriate plan. The correct answer is Enterprise (E3 or E5). Some candidates mistakenly choose Business Premium because of its security features, but the user limit disqualifies it.
Exam Trap: Add-on Licensing
Microsoft offers E5 Compliance and E5 Security add-ons for E3. For example, an organization with E3 can add Microsoft 365 E5 Compliance ($12/user/month) to get advanced compliance features without upgrading to full E5. This is a common exam scenario: "Company has E3, needs insider risk management. What should they do?" Answer: Add E5 Compliance add-on.
Exam Trap: Pricing Memory
You are not expected to memorize exact prices, but you should know the relative order: Business Basic < Business Standard < Business Premium < E3 < E5. Also know that Business Premium is roughly half the cost of E3.
Summary of Plan Features Table
| Feature | Business Basic | Business Standard | Business Premium | E3 | E5 | |---------|---------------|------------------|-----------------|----|----| | Web/mobile Office apps | Yes | Yes | Yes | Yes | Yes | | Desktop Office apps | No | Yes | Yes | Yes | Yes | | Exchange Online (50 GB) | Yes | Yes | Yes | 100 GB | 100 GB | | Microsoft Teams | Yes | Yes | Yes | Yes | Yes | | SharePoint/OneDrive | Yes | Yes | Yes | Yes | Yes | | Intune | No | No | Yes | Yes | Yes | | Defender for Business | No | No | Yes | No | No | | Microsoft 365 Defender | No | No | No | No | Yes | | Azure AD Premium P1 | No | No | Yes | Yes | Yes | | Azure AD Premium P2 | No | No | No | No | Yes | | eDiscovery (Standard) | No | No | Basic | Yes | Yes | | eDiscovery (Advanced) | No | No | No | No | Yes | | Phone System | No | No | No | No | Yes | | Audio Conferencing | No | No | No | No | Yes | | Power BI Pro | No | No | No | No | Yes | | Windows 10/11 Enterprise | No | No | No | Yes | Yes | | Max users | 300 | 300 | 300 | Unlimited | Unlimited |
Assess organization size and needs
Determine the number of users (≤300 vs >300) and primary requirements: basic email and collaboration (Business Basic), desktop Office apps (Business Standard), security and device management (Business Premium or E3), advanced compliance and security (E5). Also consider if Windows Enterprise license is needed (E3/E5).
Map required features to plans
List must-have features: desktop apps, Intune, advanced threat protection, compliance tools (eDiscovery, retention), phone system, Power BI. Use the feature table to identify which plans include each feature. Eliminate plans that lack critical features.
Check user count limitation
If the organization has more than 300 users, Business plans are ineligible. Enterprise plans (E3, E5) are required. Even if Business Premium seems to fit features, the user cap forces Enterprise.
Consider add-on licensing
If E3 is chosen but advanced compliance or security is needed, evaluate E5 Compliance or E5 Security add-ons instead of upgrading to full E5. This is cost-effective. For example, add E5 Compliance ($12/user/month) to E3 to get insider risk management.
Select the plan and verify
Choose the plan that meets all requirements at the lowest cost. Verify with Microsoft 365 admin center or documentation. For exam, practice with scenario-based questions. Remember that Business Premium is for SMBs wanting security; E3 for enterprises needing compliance; E5 for top-tier security and analytics.
Scenario 1: Small Business (50 users) with Basic Needs
A real estate agency with 50 agents needs email, shared calendars, and document collaboration. They rarely need offline access and have no IT staff for device management. The recommended plan is Microsoft 365 Business Basic ($6/user/month). They use Outlook on the web and Teams for communication. OneDrive and SharePoint allow sharing property documents. The total cost is $300/month. If they later need desktop apps, they can upgrade to Business Standard. Misconfiguration: If they purchase Business Premium, they overpay for Intune and Defender they don't use.
Scenario 2: Medium Business (200 users) with Security Requirements
A law firm with 200 employees needs desktop Office apps, email encryption, device management, and data loss prevention. They also need to meet compliance standards for legal documents. The appropriate plan is Business Premium ($22/user/month). It provides Intune for managing company laptops and phones, Microsoft Defender for Business for endpoint protection, and Microsoft Purview Information Protection for sensitivity labels and DLP. The total cost is $4,400/month. Common mistake: Choosing E3 ($36/user/month) would cost $7,200/month and provide unnecessary enterprise compliance features. However, if the firm expects to grow beyond 300 users, they should start with E3 to avoid migration later.
Scenario 3: Large Enterprise (5,000 users) with Advanced Compliance
A multinational bank with 5,000 employees needs desktop Office apps, advanced threat protection, insider risk management, communication compliance, and eDiscovery for regulatory compliance. They also need phone system integration. The recommended plan is E5 ($57/user/month) for all users, or E3 with E5 Compliance and E5 Security add-ons for some users. The bank opts for E5 for all users to simplify licensing and get unified security. Total cost: $285,000/month. Performance considerations: With 5,000 users, they need to plan for bandwidth for Teams audio/video and configure retention policies carefully to manage storage costs. Misconfiguration: Using Business Premium for a subset of users would violate the 300-user limit and lack advanced eDiscovery required by regulators.
The MS-900 exam tests plan selection under objective 4.1 (Describe the options for licensing and pricing). You will see scenario-based questions asking which plan to recommend. Key exam traps:
User Count Limit: Many questions describe a company with >300 users. The correct answer is always an Enterprise plan (E3 or E5). Candidates often pick Business Premium because it has security features, but the 300-user cap is a hard limit.
Desktop Apps Requirement: If a scenario mentions needing Office apps on desktops (offline), Business Basic is incorrect. The answer must be Business Standard, Business Premium, E3, or E5.
Advanced Security vs Basic: Business Premium includes Defender for Business (endpoint protection), but not Microsoft 365 Defender (which covers email, identities, etc.). E5 includes the full Microsoft 365 Defender. Questions may ask for "advanced threat protection across email and endpoints" – that points to E5.
Compliance Features: eDiscovery (advanced), communication compliance, insider risk management are only in E5 (or E3 + E5 Compliance add-on). Business Premium only has basic eDiscovery and retention.
Phone System and Audio Conferencing: Only in E5 (or as add-ons for E3). If a question requires PSTN calling, E5 is needed.
Add-on Licensing: The exam tests whether you know you can add E5 Compliance or E5 Security to E3. For example, a company with E3 needs insider risk management – the answer is not "upgrade to E5" but "add E5 Compliance."
Windows License: Business plans do not include Windows OS license. E3/E5 include Windows 10/11 Enterprise. If a scenario requires Windows Enterprise (e.g., for BitLocker, DirectAccess), choose E3/E5.
Pricing Order: Know the relative cost: Basic < Standard < Premium < E3 < E5. You don't need exact prices, but you should know that Business Premium is about half of E3.
Power BI Pro: Only in E5. If a scenario requires Power BI, E5 is the only plan that includes it.
Azure AD Premium: P1 in Business Premium and E3; P2 in E5. Conditional access (P1 feature) is available in Business Premium and E3; Identity Protection (P2) is E5 only.
To eliminate wrong answers, map each feature in the scenario to the plan that includes it. If a plan lacks even one required feature, eliminate it. Then check user count. The remaining plan is the answer.
Business plans are limited to 300 users; Enterprise plans have no user limit.
Business Basic does not include desktop Office apps; all other plans do.
Business Premium includes Microsoft Defender for Business (endpoint only); E5 includes Microsoft 365 Defender (multi-vector).
E5 is the only plan that includes Phone System, Audio Conferencing, and Power BI Pro natively.
Windows 10/11 Enterprise license is included in E3 and E5, not in Business plans.
Azure AD Premium P1 is in Business Premium and E3; Azure AD Premium P2 is in E5.
Advanced compliance features (eDiscovery, communication compliance, insider risk management) are in E5 or available as add-ons for E3.
Add-on licenses (E5 Compliance, E5 Security) can be added to E3 to get specific E5 features without full upgrade.
Know the relative pricing order: Basic ($6) < Standard ($12.50) < Premium ($22) < E3 ($36) < E5 ($57).
For exam scenarios, first check user count, then map required features to plan capabilities.
These come up on the exam all the time. Here's how to tell them apart.
Business Premium
Max 300 users
Includes Microsoft Defender for Business (endpoint only)
Includes Azure AD Premium P1
No Windows OS license (includes Windows 365 Business for 2 users)
Basic eDiscovery and retention
E3
Unlimited users
Includes Microsoft 365 Defender for Office 365 Plan 2 and Defender for Endpoint Plan 2 (but not full Microsoft 365 Defender)
Includes Azure AD Premium P1
Includes Windows 10/11 Enterprise license
Full eDiscovery (standard) and retention policies
E3
Lower cost ($36/user/month)
Azure AD Premium P1
No Phone System or Audio Conferencing
No Power BI Pro
Standard eDiscovery and compliance
E5
Higher cost ($57/user/month)
Azure AD Premium P2 (Identity Protection, Privileged Identity Management)
Includes Phone System and Audio Conferencing
Includes Power BI Pro
Advanced eDiscovery, communication compliance, insider risk management
Mistake
Business Premium includes the same security as E5.
Correct
Business Premium includes Microsoft Defender for Business (endpoint only), while E5 includes Microsoft 365 Defender (covers email, endpoints, identities, cloud apps). E5 also has Azure AD Premium P2, which Business Premium lacks.
Mistake
Business plans can be used for any number of users.
Correct
Business plans are limited to 300 users. For more than 300 users, Enterprise plans (E3, E5) are required.
Mistake
All Microsoft 365 plans include desktop Office apps.
Correct
Business Basic does not include desktop Office apps. Only web and mobile versions are available. Desktop apps are included in Business Standard, Business Premium, E3, and E5.
Mistake
E3 includes Phone System and Audio Conferencing.
Correct
E3 does not include Phone System or Audio Conferencing. These are only in E5 (or available as add-ons for E3).
Mistake
Business Premium includes Windows 10/11 Enterprise license.
Correct
Business Premium does not include a Windows OS license. It includes Windows 365 Business (Cloud PC) for up to 2 users, but not the Windows desktop OS. Windows 10/11 Enterprise is included in E3 and E5.
Reveal each answer, then mark whether you got it right. Score 60%+ to unlock the next chapter.
Business Premium is designed for small and medium businesses (up to 300 users) and includes Microsoft Defender for Business (endpoint security), Intune, and Azure AD Premium P1. E3 is for larger enterprises, includes Windows 10/11 Enterprise license, larger Exchange Online mailbox (100 GB vs 50 GB), unlimited SharePoint storage, and more advanced compliance tools like eDiscovery (standard) and retention policies. E3 also has no user limit.
Yes, Phone System and Audio Conferencing are available as add-ons for E3. However, E5 includes them natively. If you only need Phone System for a few users, you can add it to E3 for those users instead of upgrading everyone to E5.
Microsoft 365 E5 includes Power BI Pro. It is not included in any Business plan or E3. If you need Power BI Pro, you must either purchase E5 or add a Power BI Pro license to another plan.
Yes, Business Premium ($22/user/month) includes desktop Office apps, Intune, Defender for Business, and Azure AD Premium P1. It is the best option for SMBs that need security and device management without moving to enterprise plans.
Business Premium includes basic Microsoft Purview features: sensitivity labels, data loss prevention (DLP) for email and files, and basic retention policies. E3 adds full eDiscovery (standard), advanced retention, and more DLP capabilities. Advanced eDiscovery, communication compliance, and insider risk management are only in E5 (or E5 Compliance add-on).
No. Business plans do not include a Windows OS license. They include Windows 365 Business (Cloud PC) for up to 2 users in Business Premium, but not the desktop OS. Windows 10/11 Enterprise is included in E3 and E5.
Business plans (Basic, Standard, Premium) are limited to 300 users. If your organization has more than 300 users, you must use Enterprise plans (E3, E5) or a mix with Enterprise for the excess.
You've just covered M365 Business Basic, Standard, Premium vs E3/E5 — now see how well it sticks with free MS-900 practice questions. Full explanations included, no account needed.
Done with this chapter?