MS-900 Practice Question: Describe Microsoft 365 pricing, licensing, and support
A company with 200 employees needs to deploy Microsoft 365 Apps for Enterprise. They want to pay monthly and have no annual commitment. Which licensing program should they use?
⚠ Common exam trap
It's easy for candidates to confuse Microsoft 365 Business Premium with Microsoft 365 E3, assuming E3 is the only option for desktop Office apps, but Business Premium also includes Microsoft 365 Apps for Enterprise and is designed for smaller organizations with flexible monthly billing.
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 Premium
Microsoft 365 Business Premium is the correct choice because it includes Microsoft 365 Apps for Enterprise (e.g., Word, Excel, PowerPoint) and is available as a monthly subscription with no annual commitment for organizations with up to 300 users. This aligns with the company's requirement of 200 employees and the desire for flexible, month-to-month billing.
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 Enterprise Agreement
Why it's wrong here
Microsoft 365 Enterprise Agreement is a volume licensing purchasing program, not a deployment plan, and it typically requires a 3-year commitment with annual true-up payments, plus a minimum of 500 seats—far exceeding the 200-employee need and locking the company into a rigid contract.
- ✗
Microsoft 365 Business Basic
Why it's wrong here
Microsoft 365 Business Basic is an entry-level plan that provides only web-based and mobile versions of Office apps (Outlook, Word, Excel, PowerPoint) via Exchange Online and SharePoint, without the fully installed desktop applications; thus it would fail to deliver the native Office experience required in a typical 200-person deployment.
- ✓
Microsoft 365 Business Premium
Why this is correct
Microsoft 365 Business Premium is the correct choice because it includes the full Microsoft 365 Apps for Enterprise desktop applications, hosted Exchange, Teams, SharePoint, and advanced security features like Microsoft Defender for Office 365 and Intune, and it can be licensed on a true monthly basis with no annual commitment—making it a flexible, comprehensive solution for 200 employees.
- ✗
Microsoft 365 E3
Why it's wrong here
Microsoft 365 E3 is an enterprise-grade suite that bundles many of the same services as Business Premium, but it is generally purchased through an Enterprise Agreement or CSP with an annual commitment (or a costly month-to-month option), and its higher per-user price and enterprise licensing model are not optimal for a mid-sized company of 200 employees; the simpler Business Premium plan better suits this scale.
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Related to this question
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Benefits of Microsoft Cloud
Key term
Subscription
A subscription is a payment model where you pay a recurring fee to access a product or service instead of buying it once and owning it forever.
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.
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