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MS-900 Practice Question: A company with 500 users currently has Microsoft…
A company with 500 users currently has Microsoft 365 Business Basic licenses. They need to provide all users with the desktop versions of Office apps and increase email storage to 100 GB per user. What is the most cost-effective licensing upgrade from the options below?
⚠ Common exam trap
It's easy for candidates to assume Business Standard or Business Premium already includes 100 GB mailboxes, but they only include Exchange Online Plan 1 (50 GB), and the question specifically requires 100 GB per user, which forces the upgrade to an Enterprise plan like E3.
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 to Microsoft 365 E3
Microsoft 365 Business Basic provides only web and mobile versions of Office apps and 50 GB of email storage. The requirement for desktop Office apps and 100 GB email storage per user is met by Microsoft 365 E3, which includes both the full desktop Office suite and Exchange Online Plan 2 (100 GB mailbox). Among the options, E3 is the most cost-effective upgrade because it bundles these features without the additional security and device management costs of Business Premium or the inefficiency of stacking add-ons on Business Basic.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Upgrade all users to Microsoft 365 Business Standard
Why it's wrong here
Microsoft 365 Business Standard does include the traditional desktop Office applications (such as Word, Excel, and PowerPoint) that are required. However, its Exchange Online mailbox storage is capped at 50 GB per user, which falls short of the 100 GB mailbox requirement. Because the 100 GB mailbox specification cannot be met with this license alone, upgrading to Business Standard is not a valid solution.
- ✗
Upgrade all users to Microsoft 365 Business Premium
Why it's wrong here
Microsoft 365 Business Premium bundles the desktop Office apps with advanced security capabilities like Microsoft Defender for Office 365 and identity protection, but it is still built on the same Business-level Exchange Online Plan 1, delivering only 50 GB mailboxes per user. Thus, while the desktop apps requirement is satisfied and security is enhanced, the 100 GB mailbox requirement remains unmet. Therefore, Business Premium cannot fulfill both conditions.
- ✗
Keep Business Basic and purchase Exchange Online Plan 2 add-on for each user
Why it's wrong here
Keeping Microsoft 365 Business Basic and adding an Exchange Online Plan 2 add-on would indeed raise mailbox storage to 100 GB per user. However, Business Basic itself only provides web and mobile versions of Office applications, not the full desktop Office suite, which is a stated requirement. Since the desktop apps are still unavailable after adding the mail add-on, this combination fails the application requirement despite fixing the mailbox size.
- ✓
Upgrade to Microsoft 365 E3
Why this is correct
Microsoft 365 E3 is an enterprise offering that includes the full desktop Office suite (e.g., Word, Excel, PowerPoint) as well as Exchange Online Plan 2, which provides per-user mailboxes with a 100 GB storage limit. This single license simultaneously satisfies the desktop applications requirement and the 100 GB mailbox requirement for all 500 users. As such, upgrading to Microsoft 365 E3 is the correct and most straightforward solution.
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Related to this question
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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
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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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.