MS-900 Practice Question: Describe Microsoft 365 pricing, licensing, and support
A company has 500 users and is considering moving to Microsoft 365. They need to ensure that all users have access to Exchange Online, SharePoint Online, and Teams, and they want to use Microsoft Entra ID P1 for identity management. Which Microsoft 365 subscription should they choose?
⚠ Common exam trap
Candidates often overlook the 300-user limit on Microsoft 365 Business plans and assume Business Premium is sufficient for any organization size. In this scenario, the company has 500 users, so an Enterprise plan (E3) is required.
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 E3
Microsoft 365 E3 includes Exchange Online, SharePoint Online, Teams, and Microsoft Entra ID P1, meeting all stated requirements. Unlike Business Premium, E3 has no user limit, making it suitable for 500 users.
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 E5
Why it's wrong here
Microsoft 365 E5 includes every service in E3 plus advanced security, compliance, and analytics tools, so it would technically satisfy the company's requirements with no user limit. However, the additional capabilities come at a significantly higher per-user cost that is unnecessary if the organization only needs the core collaboration services. Best practice is to select the minimum license that meets all stated requirements, making E5 overprovisioned and not the ideal answer.
- ✓
Microsoft 365 E3
Why this is correct
Microsoft 365 E3 is an enterprise-level plan with no seat cap, making it suitable for 500 users. It includes Exchange Online, SharePoint Online, Teams, and Microsoft Entra ID P1 (Azure AD Premium P1), which provides the required identity and access management features. This plan delivers all necessary services at a lower cost than E5, making it the correct and most cost-effective choice for the scenario.
- ✗
Microsoft 365 Business Basic
Why it's wrong here
Microsoft 365 Business Basic is designed for small businesses and does not include Microsoft Entra ID P1; it relies on the free tier of Microsoft Entra ID, which lacks features such as conditional access and self-service password reset. Additionally, this plan only offers web-based versions of Office apps and lacks the desktop applications that may be expected in a Microsoft 365 deployment. Therefore, it fails to meet the identity management requirement and is not a valid option.
- ✗
Microsoft 365 Business Premium
Why it's wrong here
Microsoft 365 Business Premium includes Exchange Online, SharePoint, Teams, and Microsoft Entra ID P1, so it provides the required services functionally. However, this plan is strictly limited to 300 users; with 500 users, the organization cannot license all employees under this plan. Since the number of users exceeds the maximum, Business Premium is disqualified regardless of its feature set, and an enterprise plan like E3 must be used.
Go deeper
Related to this question
Learn chapter
Benefits of Microsoft Cloud
Key term
User
A user is any person, system, or device that interacts with an IT service, resource, or identity system, typically authenticated through credentials and authorized to perform specific actions.
Key term
Exchange Online
Exchange Online is Microsoft's cloud-based email, calendar, and contact hosting service that is part of the Microsoft 365 suite, allowing organizations to manage corporate messaging without maintaining their own mail servers.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This MS-900 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the MS-900 exam.