There are several different Microsoft 365 license types and choosing the correct Microsoft 365 licensing is an important step for every business, especially organizations in the cloud. Microsoft offers tiered solutions for small, medium, and enterprise sized businesses. While this allows companies to right-size licensing to their specific needs, it can also create confusion about which license is the right one. This blog will highlight the difference between Office 365 and Microsoft 365 products so you can make an informed decision.
Learn more about:
- Microsoft Licensing Changes in 2022 - The New Commerce Experience
- Microsoft Government Licensing
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- Microsoft GCC and GCC High Licensing
- Microsoft Front Line Worker (F1 & F3) Licensing
Price Comparison for Microsoft Office 365 Business Plans and Enterprise Licenses
When comparing Microsoft 365 license types, price is understandably one of the first considerations for decision-makers, with core capabilities as a close second. As of April 1st, 2024, Microsoft Teams is no longer included in Microsoft 365 and Office 365 licensing but is available as a standalone purchase. Below are the prices* for Microsoft 365 Business, Microsoft 365 Enterprise, and Office 365 Enterprise licenses.
| Microsoft Licensing Plan | Price Per User Per Month |
|---|---|
| Microsoft 365 E5 (no Teams) | $54.80 |
| Microsoft 365 E3 (no Teams) | $33.80 |
| Microsoft 365 F3 (no Teams) | $7.50 |
| Microsoft 365 F1 (no Teams) | $1.75 |
| Microsoft 365 Business Basic (no Teams) | $4.80 |
| Microsoft 365 Business Standard (no Teams) | $10.30 |
| Microsoft 365 Business Premium (no Teams) | $19.80 |
| Microsoft 365 Apps for business | $8.30 |
| Microsoft 365 Apps for enterprise | $12.00 |
| Office 365 E1 (no Teams) | $7.80 |
| Office 365 E3 (no Teams) | $20.80 |
| Office 365 E5 (no Teams) | $35.80 |
| Office 365 F3 (no Teams) | $3.50 |
- Prices assume a monthly payment with an annual agreement. Month-to-month licenses are available at a premium. Read more at Microsoft New Commerce Experience.
The base price per user for Microsoft 365 Business and Enterprise Plans ranges from $4.80 to $54.80, and that can quickly add up for larger organizations. However, companies that utilize capabilities such as Rights Management or cloud PBX may save money by bundling these services into their licensing. Cost savings can be significant for businesses that purchase third party tools for Anti-Virus, eDiscovery, MFA, or SIEM.
How Microsoft 365 Enterprise, Microsoft 365 Business, and Office 365 Enterprise Plans Differ
Many people use Microsoft 365 and Office 365 interchangeably; however, these are markedly different products. Office 365 is Microsoft’s productivity suite and includes the core applications most think of when they think of Microsoft: Outlook, Word, Excel, PowerPoint, and more. It is also only one of three suites within a Microsoft 365 license.
Microsoft 365 licenses are available as Enterprise, Business, or Apps licenses. Microsoft 365 Enterprise licenses bundle three suites—Office 365, Enterprise Mobility and Security, and Windows Enterprise—at different levels (E5, E3, F3, F1). Some Microsoft 365 Business licenses include all three suites but are more limited in features. Additionally, Microsoft 365 Business licenses have a per license cap of 300 users per tenant.
Note: We strongly discourage purchasing Microsoft 365 or Office 365 from GoDaddy due to hidden costs, and lack of feature availability. To learn more, read our blog on Migrating from GoDaddy Office 365 to Microsoft Office 365.
Jump to:
- Microsoft 365 Enterprise
- Microsoft 365 Frontline Licenses
- Microsoft 365 Business Licenses
- Microsoft 365 Apps Licenses
- Office 365 Enterprise Licenses
Microsoft 365 Enterprise Licenses
Microsoft 365 Enterprise is a suite that includes Office 365, Enterprise Mobility and Security, and Windows Enterprise. Microsoft 365 Enterprise gives you the enterprise security and compliance features you need, while providing cost savings through vendor consolidation, reduced management, and training overhead.
Microsoft 365 E5
Due to its cost, the Microsoft 365 E5 license is often positioned as a luxury license for companies that want advanced security and compliance capabilities, along with automated features. The reality is that most IT teams are overworked and understaffed, at a time when cyberattacks are increasing exponentially.
Even if employees aren’t working from home, internet connectivity makes every company a potential global target and enables intellectual property to flow freely out of any unsecured environment. IT personnel are tasked with supporting business critical operations and protecting the organization from external and internal threat actors, a responsibility that’s only getting more challenging with shrinking budgets and workforce reductions.
At a minimum, we recommend having Microsoft 365 E5 licenses in place for anyone with far-reaching environment access, but strongly encourage companies to consider the business impact a breach will impose when, not if, one occurs.
| The Basics | |
|---|---|
| Price | $54.80/license/month |
| Who It’s For | Enterprises looking for the most complete productivity and security solution available. |
| What You’ll Get |
|---|
| AI and rules-based automatic retention policies in Teams, Outlook, SharePoint, OneDrive |
| Automatic sensitivity labeling in Microsoft 365 apps, Exchange, SharePoint, and OneDrive |
| Azure Virtual Desktop |
| Cloud user self-service password change and reset and hybrid user on-premises write-back |
| Compliance Manager with Premium Regulations |
| DLP for Teams chat, emails and files, and endpoints |
| Microsoft Advanced Threat Analytics |
| Microsoft Defender XDR Full Suite |
| Microsoft Purview Insider Risk Management and Information Barriers |
| Mobile Device Management (MDM) and Mobile Application Management (MAM) |
| Privileged Access Management and Privileged Identity Management |
| Risk Based Conditional Access / Identity Protection |
| Secure Score, Advanced Security Reports, and Access Reviews |
| Sensitivity labels based on advanced classifiers (e.g., Trainable Classifiers, EDM, Named Entities, Contextual) |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
| Windows Autopatch |
| Windows Information Protection |
| Azure Information Protection Plan 2 |
| Desktop client apps |
| Exchange Plan 2 (100 GB mailbox + up to 1.5 TB archive) |
| Microsoft Entra ID P2 |
| Microsoft Intune Plan 1 |
| Power BI Pro |
| SharePoint Plan 2 (1+ TB OneDrive storage) |
Microsoft 365 E3
Compared to the Microsoft 365 E5 license, the Microsoft 365 E3 maintains a similar level of productivity features and allocated storage; however, it lacks machine-learning and automated security capabilities.
| The Basics | |
|---|---|
| Price | $33.80/license/month |
| Who It’s For | Employees who want the best in productivity and collaboration and administrators who want to be assured they are operating in a secure and compliant environment. |
| What You’ll Get |
|---|
| Azure Virtual Desktop |
| Cloud user self-service password change and reset and hybrid user on-premises write-back |
| Compliance Manager |
| Conditional Access |
| DLP for emails and files |
| Manual retention labels |
| Microsoft Advanced Threat Analytics |
| Mobile Device Management (MDM) and Mobile Application Management (MAM) |
| Secure Score and Advanced Security Reports |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
| Windows Autopatch |
| Windows Information Protection |
| Azure Information Protection Plan 1 |
| Desktop client apps |
| Exchange Plan 2 (100 GB mailbox + up to 1.5 TB archive) |
| Microsoft Defender for Cloud Apps Discovery |
| Microsoft Defender for Endpoint Plan 1 |
| Microsoft Entra ID P1 |
| Microsoft Intune Plan 1 |
| SharePoint Plan 2 (1+ TB OneDrive storage) |
Microsoft 365 Frontline Licenses
Microsoft’s Frontline licensing is an alternative for users that need to have a digital presence in the tenant but are not but are not spending their days creating or consuming data within the environment. Frontline users may not work at a desk, but still have matching security and compliance requirements. For organizations with regulatory requirements, the Microsoft 365 F5 Security and Compliance Add-On brings the security and compliance allotments in line with a Microsoft 365 E5 license while maintaining reduced productivity capabilities and storage capacity.
Microsoft 365 F3
The Microsoft 365 F3 comes close to matching the Enterprise Mobility and Security E3 suite (notable losses include Defender for Endpoint Plan 1 and DLP for emails and files) but has deprecated productivity applications and reduced storage allocations.
| The Basics | |
|---|---|
| Price | $7.50/license/month |
| Who It’s For | Enterprises with a variety of productivity use cases but an unchanging security mandate. |
| What You’ll Get |
|---|
| Azure Virtual Desktop |
| Cloud user self-service password change and reset and hybrid user on-premises write-back |
| Compliance Manager |
| Conditional Access |
| Manual retention labels |
| Microsoft Advanced Threat Analytics |
| Mobile Device Management (MDM) and Mobile Application Management (MAM) |
| Secure Score and Advanced Security Reports |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
| Windows Autopatch |
| Windows Information Protection |
| Azure Information Protection Plan 1 |
| Microsoft 365 for mobile and the web (no desktop apps) |
| Exchange Kiosk (2 GB mailbox) |
| Microsoft Defender for Cloud Apps Discovery |
| Microsoft Entra ID P1 |
| Microsoft Intune Plan 1 |
| SharePoint Kiosk (2 GB OneDrive storage) |
Microsoft 365 F1
As noted above, the biggest difference between a Frontline and Enterprise license is the deprecated productivity applications and reduced storage allocations. The Microsoft 365 F1 takes that up a notch by dropping down from the Microsoft 365 F3’s web and mobile only applications to read-only versions of web and mobile. Note that neither Microsoft 365 F3 or F1 supports desktop applications.
| The Basics | |
|---|---|
| Price | $1.75/license/month |
| Who It’s For | Enterprises with a variety of productivity use cases but an unchanging security mandate. |
| What You’ll Get |
|---|
| Azure Information Protection Plan 1 |
| Cloud user self-service password change and reset and hybrid user on-premises write-back |
| Compliance Manager |
| Conditional Access |
| Exchange Kiosk (2 GB mailbox) |
| Manual retention labels |
| Microsoft 365 for mobile and the web - read only |
| Microsoft Advanced Threat Analytics |
| Microsoft Defender for Cloud Apps Discovery |
| Microsoft Entra ID P1 |
| Microsoft Intune Plan 1 |
| Mobile Device Management (MDM) and Mobile Application Management (MAM) |
| Secure Score and Advanced Security Reports |
| SharePoint Kiosk (2 GB OneDrive storage) |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
Microsoft 365 Business Licenses
Microsoft 365 Business plans were created for small businesses that might not need all of the features of an Enterprise level license. While Enterprise licenses have no seat limitations, Microsoft 365 Business has a per license cap of 300 users per tenant.
Microsoft 365 Business Premium (No Teams)
The most powerful Microsoft Business license without going full enterprise, the Microsoft 365 Business Premium license includes business specific versions of Microsoft Defender and Windows 11. It also includes Intune, for organizations looking to leverage that capability specifically. While it does not include the full Enterprise Mobility and Security E3 product suite, it comes close.
| The Basics | |
|---|---|
| Price | $19.75/license/month |
| Who It’s For | Businesses with fewer than 300 users that need stronger security and compliance tools, but not the full Enterprise Mobility and Security (EMS) suite. |
| What You’ll Get |
|---|
| Azure Virtual Desktop |
| Cloud user self-service password change and reset and hybrid user on-premises write-back |
| Compliance Manager |
| Conditional Access |
| DLP for emails and files |
| Manual retention labels |
| Mobile Device Management (MDM) and Mobile Application Management (MAM) |
| Secure Score |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
| Windows Information Protection |
| Azure Information Protection Plan 1 |
| Desktop client apps |
| Exchange Plan 1 (50 GB mailbox + 50 GB archive) |
| Microsoft Defender for Cloud Apps Discovery |
| Microsoft Defender for Business |
| Microsoft Entra ID P1 |
| Microsoft Intune Plan 1 |
| SharePoint Plan 1 (1 TB OneDrive storage) |
| Windows 11 Business |
Microsoft 365 Business Standard (No Teams)
Formerly Office 365 Business Premium, Microsoft 365 Business Standard adds critical small business tools such as desktop applications and email. It does not stack up security wise to Business Premium.
| The Basics | |
|---|---|
| Price | $10.25/license/month |
| Who It’s For | Businesses with fewer than 300 users that need the latest desktop versions of Office applications, cloud services, and email hosting alongside small business applications. |
| What You’ll Get |
|---|
| Desktop client apps |
| Exchange Plan 1 (50 GB mailbox + 50 GB archive) |
| SharePoint Plan 1 (1 TB OneDrive storage) |
| Cloud user self-service password change and reset |
| Compliance Manager |
| Exchange Online Protection |
| Mobile Device Management (MDM) |
| Secure Score |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
Microsoft 365 Business Basic (No Teams)
Microsoft 365 Business Basic is one of the few lower-tier licenses that includes Exchange Online Plan 1, which can make this an ideal choice for frontline users that don’t work at a desk but send a lot of email.
| The Basics | |
|---|---|
| Price | $4.75/license/month |
| Who It’s For | Companies with fewer than 300 users that don’t rely heavily on Office 365 applications, online storage, and who do not need desktop applications |
| What You’ll Get |
|---|
| Cloud user self-service password change and reset |
| Compliance Manager |
| Exchange Online Protection |
| Exchange Plan 1 (50 GB mailbox + 50 GB archive) |
| Mobile Device Management (MDM) |
| Secure Score |
| SharePoint Plan 1 (1 TB OneDrive storage) |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
Microsoft 365 Apps Licenses
The Microsoft 365 Apps licenses are stripped down to the Office 365 suite Microsoft is known for. Unlike perpetual versions of the Office 365 suite, these subscription offerings ensure all applications will always be up-to-date and supported.
Microsoft 365 Apps for Enterprise
Formerly known as Office 365 ProPlus, Microsoft 365 Apps for Enterprise is built for enterprise customers. In addition to automatically updated version of the core Microsoft 365 desktop apps (Outlook and Teams excluded), it includes greater security and compliance features, as well as increased deployment and management controls than its Microsoft 365 Apps for Business counterpart. Large organizations leveraging non-Microsoft vendors for communication and collaboration may choose this, along with small to medium organizations that want higher levels of IT control than the Microsoft 365 Apps for Business license supports.
| The Basics | |
|---|---|
| Price | $12 / license /month |
| Who It’s For | Users that rely heavily on Office 365 applications (email hosting and Teams not included) and require compliance and basic business intelligence |
| What You’ll Get |
|---|
| Delve |
| Microsoft 365 Mobile App |
| Microsoft Forms |
| Microsoft Whiteboard |
| Office Add-in Support |
| Office Applications (PC & Mac) |
| Office Cloud Policy Service |
| Office for the Web (Visio included) |
| Office Group Policy Support |
| Office Telemetry |
| OneDrive for Business Plan 1 |
| Roaming Settings |
| Shared Computer Activation |
| Sway |
| Virtual Desktop Use Rights |
Microsoft 365 Apps for Business
Previously named Office 365 Business, Microsoft 365 Apps for Business provides a maximum of 300 users automatically updated editions of the commonly used Office desktop applications (sans Outlook or Teams), but without any of the additional security, communication, or administrative capabilities in Microsoft 365 Apps for enterprise.
| The Basics | |
|---|---|
| Price | $8. 30 / license /month |
| Who It’s For | Businesses with fewer than 300 users that only need Office applications, cloud file storage, and sharing (email hosting and Teams not included) |
| What You’ll Get |
|---|
| Microsoft 365 Mobile App |
| Microsoft Forms |
| Office Applications (PC & Mac) |
| Office for the Web (Visio included) |
| OneDrive for Business Plan 1 |
Office 365 Enterprise Licenses
Office 365 Enterprise is Microsoft’s productivity suite and includes the core applications most think of when they think of Microsoft: Outlook, Word, Excel, PowerPoint, and more. It is also only one of three suites included in a Microsoft 365 license. Unlike Microsoft 365 Enterprise licenses, which bundle three suites—Office 365, Enterprise Mobility and Security, and Windows Enterprise—Office 365 Enterprise licenses lack the security and operating system tiers.
Office 365 Enterprise E5 (No Teams)
The Office 365 E5 license includes the highest level of Microsoft’s productivity capabilities, without the security and operating systems components of the Microsoft 365 E5 license. Organizations that are leveraging other vendors or services to cover those bases may find this license appealing.
| The Basics | |
|---|---|
| Price | $3 5.80 / license /month |
| Who It’s For | Full productivity suite without added security or compliance capabilities . |
| What You’ll Get |
|---|
| AI and rules-based automatic retention policies in Outlook, SharePoint , OneDrive |
| Automatic sensitivity labeling in Microsoft 365 apps, Exchange, SharePoint, and OneDrive |
| Cloud user self-service password change and reset and hybrid user on-premises write-back |
| Compliance Manager |
| DLP for emails and files |
| Mobile Device Management (MDM) |
| Privileged Access Management |
| Secure Score |
| Sensitivity labels based on advanced classifiers (e.g., Trainable Classifiers, EDM, Named Entities, Contextual) |
| Desktop client apps |
| Exchange Plan 2 (100 GB mailbox + up to 1.5 TB archive) |
| Power BI Pro |
| SharePoint Plan 2 (1+ TB OneDrive storage) |
Office 365 Enterprise E3 (No Teams)
Office 365 E3 maintains a similar level of productivity features and allocated storage as the Office 365 E5, however with less automation features and none of the security features of the Microsoft 365 E3.
| The Basics | |
|---|---|
| Price | $20.80 / license /month |
| Who It’s For | Businesses that need the core of Microsoft’s productivity offerings and don’t need the security or compliance capabilities. |
| What You’ll Get |
|---|
| Cloud user self-service password change and reset and hybrid user on-premises write-back |
| Compliance Manager |
| Desktop client apps |
| DLP for emails and files |
| Exchange Plan 2 (100 GB mailbox + up to 1.5 TB archive) |
| Manual retention labels |
| Mobile Device Management (MDM) |
| Secure Score |
| SharePoint Plan 2 (1+ TB OneDrive storage) |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
Office 365 Enterprise E1 (No Teams)
Office 365 E1 is the least expensive Enterprise license, with a focus on services and minimal productivity (e.g., web only apps). It can be combined with Microsoft 365 Apps for Business or Enterprise.
| The Basics | |
|---|---|
| Price | $ 7.80 / license /month |
| Who It’s For | Users that don’t need desktop versions of Outlook or Office applications . |
| What You’ll Get |
|---|
| Compliance Manager |
| Exchange Plan 1 (50 GB mailbox + 50 GB archive) |
| Manual retention labels |
| Mobile Device Management (MDM) |
| Secure Score |
| SharePoint Plan 1 (1 TB OneDrive storage) |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
Office 365 Enterprise F3 (No Teams)
Only available via CSP, the Office 365 F3 is the lightest Enterprise license available. It does not have any of the security features of a Microsoft 365 F3 license and has very minimal productivity and collaboration capabilities.
| The Basics | |
|---|---|
| Price | $ 3.50 / license /month |
| Who It’s For | Desk-less, mobile, line, and floor staff that do not need desktop applications . |
| What You’ll Get |
|---|
| Compliance Manager |
| Exchange Kiosk (2 GB mailbox) |
| Manual retention labels |
| Microsoft 365 for mobile and the web (no desktop apps) |
| Mobile Device Management (MDM) |
| Secure Score |
| SharePoint Kiosk (2 GB OneDrive storage) |
| User Provisioning including Windows Autopilot and Single sign-on (SSO) |
Summary
Licensing isn’t always a one size fits all and if any of the licenses above don’t check all the boxes, reach out to discuss alternative strategies like add-on or standalone licenses. Agile IT’s cloud licensing services make it easy to purchase, transfer, and manage your licenses.
Have questions about which Microsoft 365 license is right for your organization? Request a quote to see how much you can save.
Frequently Asked Questions
What are the differences between Microsoft 365 and Office 365 licenses?
Microsoft 365 is a comprehensive suite that includes Office 365 along with Enterprise Mobility and Security (EMS) and Windows Enterprise. Office 365, on the other hand, is primarily a productivity suite with core applications like Outlook, Word, Excel, and PowerPoint. We have a blog post with more details here!(news/6-productivity-boosting-office-365-updates/)
Is Microsoft Teams included in Microsoft 365 and Office 365 licenses?
As of April 1, 2024, Microsoft Teams is no longer included for net new purchases and must be purchased separately as a standalone product. Customers who already have the bundled version are not impacted by this announcement.
What is the difference between Microsoft 365 Enterprise and Microsoft 365 Business plans?
Microsoft 365 Enterprise includes advanced and customizable management features for organizations with specific needs. Microsoft 365 Business plans are designed for small businesses, have simplified (i.e., not customizable) management settings, and a user cap of 300 licenses per tenant.
What features are missing in the Microsoft 365 E3 license compared to the E5?
Microsoft 365 E3 does not include advanced automation and machine-learning capabilities, such as AI-based retention policies and sensitivity labeling, which are available in E5
What are the limitations of Microsoft 365 Business licenses compared to Enterprise licenses?
Microsoft 365 Business licenses have a cap of 300 users per tenant and offer fewer advanced security features compared to Enterprise licenses.
Can I combine Office 365 licenses with Microsoft 365 Apps for Business or Enterprise?
Yes, businesses can combine these licenses to create a customized solution based on their specific needs.
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