Microsoft 365 Plans with Basic Compliance for 150 Users
A company is choosing a Microsoft 365 plan for 150 users who need email, file storage, and Teams. They also need basic compliance features such as data retention policies and eDiscovery. Which TWO plans meet these requirements?
Quick Answer
Microsoft 365 E3 and Business Premium both satisfy this requirement because each includes the full productivity core — Exchange Online for email, SharePoint and OneDrive for file storage, and Teams for collaboration — alongside the basic compliance capabilities the company needs, namely data retention policies and eDiscovery at the Standard tier. For a company of 150 users, Business Premium remains available since it sits comfortably under the 300-seat cap that applies to all Business-tier plans, while E3 has no such user limit and is designed for organisations that may grow past that threshold or need Enterprise-tier features beyond what this scenario currently requires. The decision between the two in practice usually comes down to whether the organisation expects to need Enterprise-only capabilities later, or values Business Premium's bundled device management and security features — but for the stated requirement of email, storage, Teams, and basic compliance alone, both plans genuinely qualify, which is why the question asks for two correct answers rather than one.
⚠ Common exam trap
Test-takers frequently assume only E3 or E5 can provide compliance features, forgetting that Microsoft 365 Business Premium also includes data retention policies and eDiscovery (Standard) for organizations under 300 users.
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, and Teams, plus advanced compliance features like data retention policies and eDiscovery (Standard). Microsoft 365 Business Premium also includes these core services and compliance capabilities, making both suitable for 150 users needing email, file storage, Teams, and basic compliance.
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 E1
Why it's wrong here
E1 lacks eDiscovery and retention policies.
- ✓
Microsoft 365 E3
Why this is correct
E3 includes all required features and is suitable for any size.
- ✓
Microsoft 365 Business Premium
Why this is correct
Business Premium includes all required features for up to 300 users.
- ✗
Microsoft 365 E5
Why it's wrong here
E5 includes all features but is more expensive than needed.
- ✗
Microsoft 365 Business Basic
Why it's wrong here
Business Basic does not include eDiscovery and retention policies.
Go deeper
Related to this question
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Benefits of Microsoft Cloud
Key term
Microsoft 365
Microsoft 365 is a subscription-based cloud service from Microsoft that combines productivity tools like Office apps with security, device management, and online storage.
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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Variation 1. Contoso Ltd. is a mid-sized company with 1,200 employees. They currently use on-premises Exchange and SharePoint. They plan to migrate to Microsoft 365 and have decided to use Microsoft 365 E3 for all users. The IT department is concerned about the cost of add-on services. The CFO wants to minimize monthly expenses while ensuring that users have access to Exchange Online, SharePoint Online, Teams, and OneDrive. Additionally, the company needs to meet basic compliance requirements such as retention policies and eDiscovery. They do not require advanced security features like Microsoft Defender for Office 365 P2 or Microsoft Purview Data Loss Prevention. Which approach should the IT department recommend to meet these requirements at the lowest cost?
medium- A.Use Microsoft 365 E3 and add Microsoft Purview Compliance Manager
- B.Use Microsoft 365 Business Premium for all users
- ✓ C.Use Microsoft 365 E3 without any add-ons
- D.Use Microsoft 365 E5 for all users
Why C: Microsoft 365 E3 includes Exchange Online, SharePoint Online, Teams, and OneDrive, as well as core compliance features like retention policies and eDiscovery (via Microsoft Purview). Since the company does not require advanced security add-ons, no additional purchases are needed, making E3 the lowest-cost option that meets all stated requirements.
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.