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MS-900 Practice Question: A company has 50 users with Microsoft 365…

A company has 50 users with Microsoft 365 Business Basic licenses. They need desktop versions of Office apps (Word, Excel, PowerPoint) and 1 TB of cloud storage per user. They do not need advanced security, device management, or analytics features. Which licensing upgrade is the most cost-effective?

⚠ Common exam trap

Test-takers frequently think an add-on license exists for desktop Office apps on Business Basic, but Microsoft does not offer such an add-on; the only path is a plan upgrade, and Business Standard is the cheapest option that includes all required features without over-provisioning security or management capabilities.

Answer choices

Why each option matters

Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.

Correct answer & explanation

✓

Microsoft 365 Business Standard

Microsoft 365 Business Standard includes desktop versions of Office apps (Word, Excel, PowerPoint) and provides 1 TB of OneDrive cloud storage per user, meeting the stated requirements exactly. It is the most cost-effective upgrade from Business Basic because it adds these features without the advanced security, device management, or analytics capabilities found in higher-tier plans.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • ✓

    Microsoft 365 Business Standard

    Why this is correct

    Microsoft 365 Business Standard is the correct upgrade because it directly addresses the gap in Business Basic: it includes the full desktop versions of Office apps (Word, Excel, PowerPoint, Outlook, and more) in addition to the 1 TB OneDrive storage, Exchange Online, Teams, and SharePoint that users already have. This gives the 50 users the locally installed productivity tools they need without paying for extra security or compliance features that are irrelevant to their stated requirement.

  • ✗

    Microsoft 365 Business Premium

    Why it's wrong here

    Microsoft 365 Business Premium is incorrect because it includes everything in Business Standard plus advanced security and device management capabilities such as Microsoft Intune, Azure Information Protection, Conditional Access, and Microsoft Defender for Business. These extra features are not needed for simply obtaining desktop Office apps and would significantly increase the per-user cost, making it an overprovisioned and unnecessarily expensive solution for a business that only needs standard productivity tools.

  • ✗

    Microsoft 365 E3

    Why it's wrong here

    Microsoft 365 E3 is incorrect because it is an enterprise-level plan marketed to larger organizations, bundling Windows Enterprise, advanced compliance tools (eDiscovery, legal hold), Power BI analytics, and other enterprise-scale features. For a 50-user business, E3 would require a higher price per user and often an enterprise agreement or volume licensing, and the additional licenses do not solve the desktop Office deficiency in a way that justifies the substantial cost over Business Standard.

  • ✗

    Add an Office desktop apps add-on to Business Basic

    Why it's wrong here

    Adding an Office desktop apps add-on to Business Basic is not possible because Microsoft does not offer a standalone add-on that grants the full Office desktop suite to Business Basic subscribers. Business Basic is intentionally limited to web and mobile versions of Office apps; the only way to get the desktop applications is to upgrade to a higher-tier plan such as Business Standard or Business Premium. Therefore, this option is invalid as a licensing path.

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Written by Johnson Ajibi, MSc IT Security

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