MS-900 Practice Question: Describe Microsoft 365 pricing, licensing, and support
An organization with 10,000 users is planning to deploy Microsoft 365. They need to minimize monthly costs while ensuring all users have access to Exchange Online, SharePoint Online, Teams, and Microsoft Copilot for Microsoft 365. Which licensing approach should they adopt?
⚠ Common exam trap
It's easy for candidates to assume Business Premium is a cheaper alternative for large organizations, but it has a 300-user limit and lacks enterprise features, making E3 the correct base license for organizations with 10,000 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
✓
Purchase Microsoft 365 E3 for all users and add Copilot licenses
Microsoft 365 E3 provides the core enterprise-grade capabilities for Exchange Online, SharePoint Online, and Teams for all 10,000 users, while Copilot for Microsoft 365 can be added as an add-on license only for the users who need it, minimizing monthly costs. This approach avoids paying for premium features (like advanced security in E5) or unnecessary Copilot licenses across the entire user base, aligning with the requirement to minimize costs while ensuring all users have the required services.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Purchase Microsoft 365 E3 for most users and Copilot for a subset
Why it's wrong here
Purchasing E3 for most users and Copilot for only a subset fails the stated organization-wide deployment goal, because Microsoft 365 Copilot is a per-user add-on and every user who needs it must be assigned both an E3 base license and a Copilot license. Although E3 is the right base plan, leaving any user without Copilot means that user cannot access Copilot features, creating an inconsistent experience and licensing compliance gaps. The correct approach is to assign E3 and Copilot to all 10,000 users.
- ✗
Purchase Microsoft 365 E5 for all users
Why it's wrong here
E5 for all users would overprovision the tenant, since E5 bundles advanced security, compliance, and analytics products such as Microsoft Purview and Microsoft Defender for Identity, none of which are required to enable Microsoft 365 Copilot. While E5 is a qualifying base plan, purchasing it solely to support Copilot for 10,000 users multiplies unnecessary cost by every user. E3, combined with the Copilot add-on, delivers the same Copilot functionality at significantly lower licensing expense.
- ✗
Purchase Microsoft 365 Business Premium for all users and add Copilot licenses
Why it's wrong here
Microsoft 365 Business Premium is a small-business plan that is limited to 300 user licenses, so it cannot cover an organization with 10,000 users, regardless of how many Copilot add-on licenses are purchased. Additionally, Business Premium is not designed for enterprise-level identity and compliance requirements, and scale deployment beyond the cap is not supported. This option is therefore invalid on capacity grounds before considering Copilot licensing.
- ✓
Purchase Microsoft 365 E3 for all users and add Copilot licenses
Why this is correct
Microsoft 365 E3 is an enterprise-grade qualifying base plan for Copilot with no 300-user ceiling, making it suitable for a 10,000-user organization. Adding the Microsoft 365 Copilot add-on to E3 provides the full Copilot experience for every user while avoiding the advanced security and compliance features in E5 that would increase cost. This combination of a lower-cost enterprise base license plus the Copilot add-on is the standard, recommended licensing path for this scenario.
Go deeper
Related to this question
Learn chapter
Exchange Online Architecture and Mail Flow
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
SharePoint Online
SharePoint Online is a cloud-based collaboration platform from Microsoft that lets teams create, store, organize, and share content securely from anywhere.
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Written by Johnson Ajibi, MSc IT Security
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