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MS-900 Practice Question: A company with 50 users currently has Microsoft…
A company with 50 users currently has Microsoft 365 Business Basic licenses. They now want to give all users the desktop versions of Office apps and 1 TB of OneDrive storage per user. What is the most cost-effective licensing change?
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
✓
Upgrade all users to Microsoft 365 Business Standard
Microsoft 365 Business Standard includes desktop Office apps, Exchange Online, Teams, and 1 TB OneDrive storage. Upgrading the existing subscriptions to Business Standard is more cost-effective than adding separate Microsoft 365 Apps for Business licenses because the latter does not include additional benefits like Exchange, and upgrading is typically priced per user as an incremental cost.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
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Purchase Microsoft 365 Apps for Business licenses for all users
Why it's wrong here
Microsoft 365 Apps for Business only supplies the desktop Office applications; it does not include the Exchange Online, Teams, SharePoint, and OneDrive services that the company already receives through Business Basic. Because the company would still need to keep the Business Basic subscription to maintain those services, the total cost of two separate plans exceeds the single Business Standard license, and the company would not gain additional storage or unified management.
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Upgrade all users to Microsoft 365 Business Standard
Why this is correct
Upgrading every user to Microsoft 365 Business Standard is the appropriate choice because it includes the full desktop versions of Word, Excel, PowerPoint, and Outlook in addition to the cloud services already present in Business Basic, such as a 1 TB OneDrive, Exchange Online, Teams, and SharePoint. Since the tenant already has Business Basic, changing the licenses to Business Standard is a straightforward SKU modification, and the license change is billed at the price difference, making it more economical than purchasing a second Office-only plan.
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Upgrade all users to Microsoft 365 Business Premium
Why it's wrong here
Microsoft 365 Business Premium bundles the same desktop apps and services as Business Standard, but adds Intune for device management, Azure AD Premium for advanced identity protection, and Microsoft Defender for Business. With 50 users requiring only email, collaboration, and desktop Office, these extra security and management capabilities represent unnecessary overhead and a substantially higher per-user license fee, so the scenario does not call for this heavier plan.
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Purchase Microsoft 365 E3 licenses for all users
Why it's wrong here
Microsoft 365 E3 is an enterprise-level suite designed for larger organizations, offering advanced compliance, eDiscovery, Power BI, and enterprise-grade security without the per-user price point of business plans. Selecting E3 for a 50-user company that simply needs desktop apps and standard Microsoft 365 services would be cost-prohibitive and administratively complex, as many of the included enterprise features would go unused and the license costs are considerably above Business Standard.
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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
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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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.