Technology plays a crucial role in today’s business environment by helping organizations streamline operations to stay competitive. Perhaps the most recognized name in the business technology world is Microsoft, offering a broad range of software licenses to help businesses manage operations, boost productivity, and enhance data security. Choosing the right Microsoft licenses for your business is no simple feat as unclear names and similar capabilities between licenses can lead to confusion about which license will best meet your business’s needs. Understanding Microsoft’s licensing options is essential in preventing your business from being over or under-licensed. If you’re trying to choose a Microsoft license for your business but you’re unsure where to start, this guide is for you. Keep reading as we take an in-depth look at Microsoft’s current licensing options to help you choose the right products for your company.
The Differences Between Microsoft 365 and Office 365 Licenses
A common point of confusion for businesses as they begin researching Microsoft licensing options is the difference between Office 365 and Microsoft 365 licenses. Many people assume that both names refer to the same product; however, this could not be further from the truth.
The difference between Microsoft 365 and Office 365 licenses is the level of services and features that they provide. Office 365 is a suite of licensing that provides businesses with access to Exchange Online (EXO), SharePoint Online (SPO), and OneDrive for Business (ODFB), as well as cloud-based productivity apps like Microsoft Word, PowerPoint, and Outlook. Conversely, Microsoft 365 licenses include Office 365 along with two other license suites that include Windows OS, Microsoft Defender for Endpoint, Microsoft Purview eDiscovery, and Enterprise Mobility and Security.
When trying to choose a Microsoft license for your business, start by thinking about what features you’re hoping to get out of it. If you simply want apps like Word and Excel, an Office 365 plan may work for you. However, if you want tools for enhanced collaboration, security, and compliance, then you should choose a Microsoft 365 license.
Changes to Teams
As of April 1, 2024, Microsoft Teams is no longer included in Microsoft 365 licenses. Teams Enterprise is now a standalone product that you can license for $5.25/user/month. If you want access to Microsoft Teams, you will have to budget for this separately, which is important to consider when planning your purchase.
Microsoft 365 for Business Licenses
When choosing a Microsoft 365 license for your business, you will have two main choices: the business service family and the enterprise service family. If you have a small business, a Microsoft 365 for Business plan is likely the best option for you. Microsoft 365 for Business is designed for small businesses with up to 300 users. All Microsoft 365 for Business plans include powerful tools like email, Office 365, Windows 11 Pro, and Enterprise Mobility + Security, giving your team the tools they need to work together effectively and securely. There are three Microsoft 365 for Business plans:
Microsoft 365 Business Basic Plan
As the name implies, Microsoft 365 Business Basic is the lowest tier of Microsoft 365 for Business. With this plan, you get web and mobile Office 365 apps like Microsoft Word, Excel, Outlook, and PowerPoint. You also get 1 TB of cloud storage for each of your users, business email, and standard security, as well as 24/7 phone and web support to help you with any problems you may encounter.
Microsoft 365 Business Standard Plan
Each tier of Microsoft 365 for Business builds upon the last one. Microsoft 365 Business Standard is the next level up and offers the same features as Microsoft 365 Business Basic plus the ability to install desktop apps for offline work. Microsoft 365 Business Standard is a great option if your team travels a lot and needs to work on the go.
Microsoft 365 Business Premium Plan
Finally, the most advanced plan in the Microsoft 365 for Business family is Microsoft 365 Business Premium. In addition to the features in the previous two plans, a Microsoft 365 Business Premium license includes enhanced security features with Microsoft Defender, giving you advanced protection for cyberattacks. You also get advanced device management tools, such as the ability to control access to your company’s data and wipe devices remotely, along with Microsoft Entra ID (formerly known as Microsoft Azure Active Directory).
Microsoft 365 Enterprise Licenses
The next family of Microsoft licenses for businesses are Microsoft 365 Enterprise licenses. Microsoft 365 Enterprise is a set of license plans designed for large companies with over 300 users. These licensing suites offer increased levels of compliance and security management compared to Microsoft 365 for Business. They provide enhanced functionality including business intelligence and analytics tools (Microsoft Power BI), advanced device management, and greater customization. Additionally, these plans come with Windows 11 Enterprise. If your company will need more than 300 Microsoft 365 licenses, and/or you have enhanced security and compliance needs, then an Enterprise license is the right choice. Here’s a brief overview of everything businesses need to know about Microsoft 365 Enterprise licenses:
Microsoft 365 E3
Microsoft 365 E3 is a common and effective starting point for most enterprises. This license offers the classic Microsoft apps you need, as well as business services, information protection, compliance capabilities, and some analytics. Microsoft 365 E3 is generally sufficient for the average user within your organization as they can reap the full benefits of basic productivity software and an inclusive security package. Alternatively, administrators would likely benefit from the higher level of security provided by a Microsoft 365 E5 license. Fortunately, Microsoft does allow companies to mix and match licenses based on the different needs of individuals within their organization.
Microsoft 365 E5: The Gold Standard
For administrators looking for the best security and device management features available, consider choosing the gold standard that is a Microsoft 365 E5 license. With the E5 license, you get all of the cloud-based Microsoft 365 productivity apps you need as well as voice, analytics, and security features. This is the ideal plan for organizations that deal with sensitive information that needs to be kept secure, as well as for administrators managing remote and cloud-based employees. This license also includes Microsoft 365 E5 Compliance, which provides users with comprehensive compliance and data governance solutions to help your organization minimize risks and protect sensitive data.
Plans for Frontline Workers
While Enterprise plans are geared toward information workers (think your typical back-office employees with desk jobs), Microsoft also has plans for frontline workers in an enterprise environment. These are employees who are usually on the go and customer-facing, and they have different needs than information workers. For these employees, Microsoft 365 F3 will likely be an ideal option, as it gives them access to Microsoft 365 apps as well as Teams and other communication and collaboration tools they need to do their jobs effectively. Despite having Microsoft 365 in the name, this license does not come with Windows.
This Microsoft licensing option is suitable for users who do not need to have an actual presence or communication point but must participate in assignments within teams or view shared company messages. F-series licenses also allow for the application of protection without paying for the higher-priced E5 license, as this license comes with security and compliance features.
The primary limitation of this license is that users cannot be administrators, and there may be some components where full participation in the infrastructure is not available. However, the user is still receiving the same level of protection despite their lower-level functionality within the organization. In fact, this type of licensing with the level of security it provides is suitable for coverage in a GCC High space for personnel who do not need all the other components of the E5 licenses.
Microsoft 365 Apps for Business and Enterprise
If you don’t want to use a Windows operating system and you only need basic features, you could also consider Microsoft 365 Apps for Business or Enterprise. With Microsoft 365 Apps for Business, you get downloadable versions of the Microsoft Apps you know and love such as Word and Excel, but not much else. This plan is much more limited in its features than other Microsoft 365 or Office 365 plans. Microsoft 365 Apps for Enterprise is a bit more comprehensive, as it also provides 1TB of cloud storage per user, enhanced communication tools, and limited security and compliance features. These plans are useful if you are looking for a Microsoft plan that gives you access to apps and nothing more, as both of these options are pretty basic in terms of the features and security elements they offer.
If you plan on Migrating to Microsoft 365, it is important that you fully understand your licensing options before purchasing to ensure increased productivity and cost-efficiency. However, making this decision can be difficult and confusing, as there are multiple ways to stack Microsoft licensing to maximize value and ensure that your data security needs are met. Fortunately, Agile IT is here to help.
As a direct Microsoft reseller with the ability to license and manage Microsoft 365 Commercial, GCC, GCC High, Azure, and Azure Government, we have the knowledge and experience to help you find the right Microsoft licensing solutions to meet your organization’s needs. Contact us today for a free quote as well as to learn more about your Microsoft licensing options.
Frequently Asked Questions
How does Microsoft 365 organize its main products?
Microsoft 365 groups its offerings as follows:
- Enterprise Mobility and Security (EMS): Focuses on managing and securing users, data, devices, and apps.
- Office 365: Provides productivity apps like Teams, OneDrive, and Office Suite applications.
- Windows 10 Enterprise: Tailored OS with enterprise-specific features for large organizations.
Why are Microsoft 365 and Office 365 often confused?
The names are similar and Office 365 is part of Microsoft 365 (but not vise versa). To add more confusion, Microsoft recycles product names over time. For instance, Office 365 Business Premium has been renamed Microsoft 365 Business Standard and Microsoft 365 Business is now Microsoft 365 Business Premium. Although the names sound similar, the less obvious differences in capabilities can have a really big impact on licensing costs.
What makes Microsoft 365 E5 the 'gold standard' license?
Microsoft 365 E5 includes the full Defender suite along with Microsoft's Security and Compliance offerings, which enables advanced device management, enhanced security, policy configuration, and eDiscovery capabilities. It is recommended for organizations needing strong security and compliance in their remote or cloud-based environments.
What features does Microsoft Defender for Endpoint provide in Microsoft 365 E5?
Microsoft Defender for Endpoint, now available as a standalone or within the Microsoft 365 E5 security license, offers enhanced endpoint security, advanced threat protection, and device management features.
What are the benefits of the Microsoft Enterprise Agreement?
The Enterprise Agreement is designed for organizations with at least 500 users (250 in the public sector) and provides substantial cost savings, simplified licensing, and flexibility in managing software and cloud services over three years.
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