MS-900 Practice Question: Which three of the following are characteristics…

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

• ✓

  Subscription plans are available in monthly and annual commitment terms.

  Why this is correct

  Microsoft 365 subscriptions are sold with either monthly or annual commitment terms, giving organizations flexibility to align billing with cash flow. Under an annual commitment, you typically choose the billing cadence (monthly or yearly), and the annual option often carries a lower effective price than a pure month-to-month subscription. This characteristic applies to most Business and Enterprise plans, with some differences in cancellation and renewal expectations.

• ✗

  All subscription plans include the full desktop version of Office applications.

  Why it's wrong here

  The claim that every Microsoft 365 plan bundles the full desktop Office suite is false. For example, Microsoft 365 Business Basic includes only Exchange Online, SharePoint, Teams, and the web/mobile versions of Office, while full desktop applications like Outlook and Word are included only in plans such as Business Standard, E3, or E5. Thus, the desktop apps are a differentiator between plan levels, not a universal inclusion across all subscriptions.

• ✗

  Plans can be upgraded or downgraded at any time without any restrictions.

  Why it's wrong here

  While Microsoft 365 allows admin self-service upgrades between many eligible plans, downgrades are not unrestricted. A downgrade to a plan with fewer licenses or features usually requires manual license removal and often contacting support, and Microsoft may restrict changes when add-ons are attached or seat counts fall below certain thresholds. No provider offers unlimited, unrestrained plan switching at any time without consequences, so the phrase “without any restrictions” is inaccurate.

• ✓

  Business plans include Microsoft 365 Business Basic, Business Standard, and Business Premium.

  Why this is correct

  The Microsoft 365 business family indeed has three tiers: Business Basic, Business Standard, and Business Premium. Business Basic provides web and mobile Office apps, Business Standard adds the full desktop applications, and Business Premium includes everything in Standard plus security and management features such as Microsoft Intune and Azure AD P1. These three are the commercial plan options aimed at organizations with up to 300 users.

• ✗

  Enterprise plans are licensed on a per-user basis with a minimum of 5 seats.

  Why it's wrong here

  Enterprise plans such as Microsoft 365 E3 and E5 are sold per-user, but there is no mandatory minimum of 5 licenses—you can subscribe a single user to an E5 license. The 5-seat minimum is a common misconception, and any plan with such a threshold would be unusual for Microsoft 365 enterprise offerings. Per-user licensing simply means the license count must match the number of assigned users.

• ✓

  Add-on services, such as Microsoft 365 Copilot, can be purchased to supplement existing plans.

  Why this is correct

  Microsoft 365 is designed to be extensible through add-on services, and Microsoft 365 Copilot is one such paid add-on purchased as an additional license on top of a qualifying plan. Other examples include Power Platform capacity add-ons, Microsoft Purview compliance add-ons, and Multi-Geo capabilities. Purchasing an add-on does not require reworking the entire subscription, though you must have an eligible base plan.