- A
Upgrade all users to Microsoft 365 E5
Why wrong: Upgrading to E5 includes many extra features (e.g., Microsoft Defender for Identity, Microsoft Cloud App Security) that increase cost unnecessarily.
- B
Purchase the Microsoft 365 E5 Security add-on for all users
Why wrong: E5 Security adds Defender for Office 365 Plan 2 but does not add the eDiscovery and Audit capabilities.
- C
Purchase the Microsoft 365 E5 Compliance add-on for all users
Why wrong: E5 Compliance adds eDiscovery and Audit but does not include Defender for Office 365 Plan 2.
- D
Purchase the Microsoft Defender for Office 365 Plan 2 add-on and the Microsoft 365 E5 eDiscovery and Audit add-on separately
Both add-ons are available for E3, providing exactly the needed capabilities without paying for unnecessary features.
Microsoft 365 Add-On Licensing for Security and eDiscovery
This MS-900 practice question tests your understanding of describe microsoft 365 pricing and support. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. A key principle to apply: microsoft 365 E3 license. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company has 250 users with Microsoft 365 E3 licenses. They need to add Microsoft Defender for Office 365 Plan 2 (for advanced threat protection and automated investigation) and Microsoft 365 E5 eDiscovery and Audit capabilities for legal investigations. They want to keep their existing E3 subscriptions and minimize additional costs. What is the most cost-effective licensing approach?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue:
"minimum / minimize"Why it matters: Asks for the least resource use — fewest addresses, smallest subnet, lowest overhead. Eliminate over-provisioned options even if they would technically work.
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 the Microsoft Defender for Office 365 Plan 2 add-on and the Microsoft 365 E5 eDiscovery and Audit add-on separately
Option D is correct because it allows the company to add only the specific capabilities they need—Microsoft Defender for Office 365 Plan 2 and Microsoft 365 E5 eDiscovery and Audit—without upgrading the entire E3 license. This approach minimizes costs by purchasing only the required add-ons, leveraging the existing E3 subscription as the base.
Key principle: Microsoft 365 E3 license
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 E5
Why it's wrong here
Upgrading to E5 includes many extra features (e.g., Microsoft Defender for Identity, Microsoft Cloud App Security) that increase cost unnecessarily.
- ✗
Purchase the Microsoft 365 E5 Security add-on for all users
Why it's wrong here
E5 Security adds Defender for Office 365 Plan 2 but does not add the eDiscovery and Audit capabilities.
- ✗
Purchase the Microsoft 365 E5 Compliance add-on for all users
Why it's wrong here
E5 Compliance adds eDiscovery and Audit but does not include Defender for Office 365 Plan 2.
- ✓
Purchase the Microsoft Defender for Office 365 Plan 2 add-on and the Microsoft 365 E5 eDiscovery and Audit add-on separately
Why this is correct
Both add-ons are available for E3, providing exactly the needed capabilities without paying for unnecessary features.
Clue confirmation
The clue word "minimum / minimize" in the question point toward this answer.
Related concept
Microsoft 365 E3 license
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often assume the Microsoft 365 E5 Security add-on covers all advanced security and compliance needs, but it does not include the E5 eDiscovery and Audit capabilities, which require a separate Compliance add-on.
Detailed technical explanation
How to think about this question
Microsoft 365 E5 eDiscovery and Audit capabilities are part of the Microsoft 365 E5 Compliance add-on, which provides advanced eDiscovery (including predictive coding and review sets) and audit log retention up to 1 year (with optional 10-year retention). Microsoft Defender for Office 365 Plan 2 includes automated investigation and response (AIR) and threat hunting, which are not available in Plan 1. Purchasing these as separate add-ons (Defender for Office 365 Plan 2 and the E5 Compliance add-on) is the most cost-effective approach because each add-on is priced per user per month and can be assigned only to users who need them, avoiding the full E5 upgrade cost.
KKey Concepts to Remember
- Microsoft 365 E3 license
- Microsoft Defender for Office 365 Plan 2 add-on
- Microsoft 365 E5 eDiscovery and Audit add-on
- Add-on licensing vs. full upgrade
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Microsoft 365 E3 license
Real-world example
How this comes up in practice
A startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.
What to study next
Got this wrong? Here's your next step.
Review microsoft 365 E3 license, then practise related MS-900 questions on the same topic to reinforce the concept.
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Describe Microsoft 365 pricing and support — study guide chapter
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FAQ
Questions learners often ask
What does this MS-900 question test?
Describe Microsoft 365 pricing and support — This question tests Describe Microsoft 365 pricing and support — Microsoft 365 E3 license.
What is the correct answer to this question?
The correct answer is: Purchase the Microsoft Defender for Office 365 Plan 2 add-on and the Microsoft 365 E5 eDiscovery and Audit add-on separately — Option D is correct because it allows the company to add only the specific capabilities they need—Microsoft Defender for Office 365 Plan 2 and Microsoft 365 E5 eDiscovery and Audit—without upgrading the entire E3 license. This approach minimizes costs by purchasing only the required add-ons, leveraging the existing E3 subscription as the base.
What should I do if I get this MS-900 question wrong?
Review microsoft 365 E3 license, then practise related MS-900 questions on the same topic to reinforce the concept.
Are there clue words in this question I should notice?
Yes — watch for: "minimum / minimize". Asks for the least resource use — fewest addresses, smallest subnet, lowest overhead. Eliminate over-provisioned options even if they would technically work.
What is the key concept behind this question?
Microsoft 365 E3 license
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Last reviewed: Jun 11, 2026
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