MS-900 Practice Question: Describe Microsoft 365 pricing, licensing, and support
A company with 500 users is planning to adopt Microsoft 365. They need to ensure that all users have access to Microsoft Teams, Exchange Online, and SharePoint Online, as well as the latest desktop versions of Office apps. They also require advanced compliance features such as litigation hold and eDiscovery. Which Microsoft 365 licensing plan best meets these requirements?
⚠ Common exam trap
Many candidates confuse Microsoft 365 Business Premium with E3, assuming Business Premium includes all E3 features for smaller organizations, but Business Premium has a 300-user limit and lacks the full advanced compliance and eDiscovery capabilities of E3, making it unsuitable for a 500-user company with specific compliance needs.
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 is the correct choice because it includes all required services: Microsoft Teams, Exchange Online, SharePoint Online, and the latest desktop versions of Office apps (Office 365 ProPlus). It also provides advanced compliance features such as litigation hold and eDiscovery (via the Microsoft Purview compliance portal), which are not available in lower-tier plans like Business Basic or Business Premium.
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 E3
Why this is correct
For a 500-user organization, Microsoft 365 E3 provides the full productivity suite including desktop Office apps, Exchange Online, SharePoint, and Teams, with no seat limit unlike Business plans. It includes core compliance features such as Litigation Hold and eDiscovery (Standard), which are essential for legal holds and content searches. E3 delivers enterprise-grade functionality at a lower cost than E5 while meeting the stated requirements.
- ✗
Microsoft 365 Business Basic
Why it's wrong here
Microsoft 365 Business Basic is unsuitable because it offers only web and mobile versions of Office apps, not the desktop applications required for full productivity. It also lacks the enterprise compliance tools like Litigation Hold and eDiscovery (Standard) that the scenario demands, as those are included in E3. With 500 users, this plan would also force a reliance on additional licensing for features already missing.
- ✗
Microsoft 365 Business Premium
Why it's wrong here
Microsoft 365 Business Premium is limited to 300 licensed users, so it cannot accommodate a 500-user deployment. Although it includes desktop Office apps and some lightweight eDiscovery capabilities, its compliance controls are optimized for small businesses and do not provide the same governance, hold, and verification depth as E3's compliance center. At 500 users, a Business plan is not a viable legal or technical fit.
- ✗
Microsoft 365 E5
Why it's wrong here
Microsoft 365 E5 is incorrect for this scenario because it bundles advanced security and analytics features—such as Microsoft 365 Defender, advanced eDiscovery, and Power BI Pro—that go beyond the stated need for basic compliance and productivity. These extras significantly raise per-user cost without adding value for the described requirements. E3 already provides the required desktop apps and litigation hold/eDiscovery capabilities.
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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.
Key term
Microsoft Teams
Microsoft Teams is a collaboration platform that integrates chat, video meetings, file storage, and application integration into a single workspace, primarily used within the Microsoft 365 ecosystem.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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