- A
Microsoft 365 E1
Why wrong: E1 lacks eDiscovery and retention policies.
- B
Microsoft 365 E3
E3 includes all required features and is suitable for any size.
- C
Microsoft 365 Business Premium
Business Premium includes all required features for up to 300 users.
- D
Microsoft 365 E5
Why wrong: E5 includes all features but is more expensive than needed.
- E
Microsoft 365 Business Basic
Why wrong: Business Basic does not include eDiscovery and retention policies.
Question 133 of 985
Microsoft 365 Plans with Basic Compliance for 150 Users
This MS-900 practice question tests your understanding of describe microsoft 365 pricing, licensing, and support. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. 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 is choosing a Microsoft 365 plan for 150 users who need email, file storage, and Teams. They also need basic compliance features such as data retention policies and eDiscovery. Which TWO plans meet these requirements?
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 includes Exchange Online, SharePoint Online, and Teams, plus advanced compliance features like data retention policies and eDiscovery (Standard). Microsoft 365 Business Premium also includes these core services and compliance capabilities, making both suitable for 150 users needing email, file storage, Teams, and basic compliance.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
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 E1
Why it's wrong here
E1 lacks eDiscovery and retention policies.
- ✓
Microsoft 365 E3
Why this is correct
E3 includes all required features and is suitable for any size.
Related concept
Read the scenario before looking for a memorised answer.
- ✓
Microsoft 365 Business Premium
Why this is correct
Business Premium includes all required features for up to 300 users.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Microsoft 365 E5
Why it's wrong here
E5 includes all features but is more expensive than needed.
- ✗
Microsoft 365 Business Basic
Why it's wrong here
Business Basic does not include eDiscovery and retention policies.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often assume only E3 or E5 can provide compliance features, forgetting that Microsoft 365 Business Premium also includes data retention policies and eDiscovery (Standard) for organizations under 300 users.
Detailed technical explanation
How to think about this question
Data retention policies in Microsoft 365 rely on the Compliance Center's retention policies, which use preservation locks and adaptive scopes to enforce retention at the workload level (Exchange, SharePoint, OneDrive, Teams). eDiscovery (Standard) uses content searches and holds via the eDiscovery Center, leveraging searchable indexes across Exchange, SharePoint, and Teams chat data. For 150 users, Business Premium supports up to 300 users and includes these compliance features, while E3 scales to unlimited users with the same core compliance capabilities.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
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
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A media company stores terabytes of video archives that are accessed once a year for audit purposes. Moving these objects to a cold storage tier (Azure Archive, S3 Glacier, or Google Nearline) costs a fraction of hot storage. Questions like this test whether you understand storage tiers, access frequency tradeoffs, and retrieval latency requirements.
What to study next
Got this wrong? Here's your next step.
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FAQ
Questions learners often ask
What does this MS-900 question test?
Describe Microsoft 365 pricing, licensing, and support — This question tests Describe Microsoft 365 pricing, licensing, and support — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Microsoft 365 E3 — Microsoft 365 E3 includes Exchange Online, SharePoint Online, and Teams, plus advanced compliance features like data retention policies and eDiscovery (Standard). Microsoft 365 Business Premium also includes these core services and compliance capabilities, making both suitable for 150 users needing email, file storage, Teams, and basic compliance.
What should I do if I get this MS-900 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Same concept, more angles
1 more ways this is tested on MS-900
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. Contoso Ltd. is a mid-sized company with 1,200 employees. They currently use on-premises Exchange and SharePoint. They plan to migrate to Microsoft 365 and have decided to use Microsoft 365 E3 for all users. The IT department is concerned about the cost of add-on services. The CFO wants to minimize monthly expenses while ensuring that users have access to Exchange Online, SharePoint Online, Teams, and OneDrive. Additionally, the company needs to meet basic compliance requirements such as retention policies and eDiscovery. They do not require advanced security features like Microsoft Defender for Office 365 P2 or Microsoft Purview Data Loss Prevention. Which approach should the IT department recommend to meet these requirements at the lowest cost?
medium- A.Use Microsoft 365 E3 and add Microsoft Purview Compliance Manager
- B.Use Microsoft 365 Business Premium for all users
- ✓ C.Use Microsoft 365 E3 without any add-ons
- D.Use Microsoft 365 E5 for all users
Why C: Microsoft 365 E3 includes Exchange Online, SharePoint Online, Teams, and OneDrive, as well as core compliance features like retention policies and eDiscovery (via Microsoft Purview). Since the company does not require advanced security add-ons, no additional purchases are needed, making E3 the lowest-cost option that meets all stated requirements.
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Last reviewed: Jun 24, 2026
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.
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