Easy Guide To Comparing Office 365 Licensing Plans Office 365 license types

Today I will tell you about something that challenges many companies as they switch to the cloud understanding Office 365 licensing options.

This article will give you a broad overview of this topic, based on the most frequently used options. Note that all information can change subject to Microsoft updates and agreements.

Because we work mostly with enterprises, this is what we’ll focus on. Let’s get to it!


  • What are the Office 365 licensing options for enterprise?
  • What services are available in each of them?
  • Which O365 license should I choose?

A quick overview of Office 365 licenses

All Office licenses are subscriptions. It works exactly as in the case of cell phone licenses. You can use them as long as you want to and pay as you go.

To make a long story short, you can buy Office 365 in a couple of licensing programs such as:

  • Enterprise Agreement
  • Web Direct (Microsoft Online Subscription Program or MOSP)
  • MPSA
  • Open
  • Cloud Solution Provider

Check out this article for details of the most popular options.

Remember that choosing the right agreement is not only about the proper license of payment terms. It is also about additional financing for your cloud deployment. There are funds like the Digital Partner of Record or Office 365 adoption funds. We won’t cover them here, but feel free to get in touch if you’d like to know more.

There are three main types of Office 365 licenses:

  • Business plans – limited to 300 users
  • Enterprise plans – with no user or feature limitations
  • Frontline worker plans– essentials for mobile or remote employees.
A high-level feature comparison

A high-level feature comparison

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Services available within O365 suites

In each suite, there are numerous services and features. Let’s go through them briefly.

  • Office apps for PC, Mac, mobile – basic office productivity services – Word, Excel, PowerPoint, etc.
  • Office Online is a web version of Office that allows viewing and editing office files
  • Exchange – an e-mail service that provides inbox, calendar, address book, tasks, and security features
  • Teams is a communicator with instant messaging, online meetings, as well as file sharing and collaboration
  • OneDrive allows you to access, share and sync your personal files in the browser and on any device
  • SharePoint allows for building intranets, searching content, and analyzing data
  • Yammer is your enterprise social network – a great tool for internal communication and offloading your inbox
  • Stream is your internal YouTube with high-performance video streaming and mobile access
  • Planner – if you are looking for a modern task management tool similar to Asana then this is the service
  • Groups – in my opinion, the best enterprise collaboration workspace on the market. It integrates Exchange, SharePoint, Skype, and Planner. Your team can use conversations, files, notes, calendar, and tasks – all in one place
  • Delve allows you to search for files and people easily, and is powered by Artificial Intelligence and Office Graph
  • Basic data analytics gives you the ability to use a free, limited version of Power BI and provides information about your Office 365 usage
  • Advanced data analytics with Power BI Pro, Excel services, and Personal Productivity Analytics.

Additional features

Most plans have basic security features such as multi-factor authentication capabilities.

  • With Exchange you also get a state-of-the-art spam and malware filter. Simple e-discovery, data loss prevention, and document encryption are also included.
  • Advanced threat protection gives you more configuration options for data loss prevention, conditional access, and advanced malware scanner.
  • Customer Lockbox included in E5 suites allows you to grant access to your data for the support team.

No time to read? Watch the video instead!

Office 365 Business

Now we’re clear on the features, let’s see what Office 365 Business suites hide inside.

A comparison of O365 Business suites

A comparison of O365 Business suites

We have three plans here:

  • Basic, which contains web and online versions of Word, Excel, and PowerPoint, and 50GB of email hosting.
  • Standard that offers all collaboration and communication services, as well as desktop productivity apps.
  • Premium, which offers all the features of the previous two plans and advanced security capabilities.
NoteAll of these options are limited to 300 users.

Office 365 Enterprise

Now, let’s take a look at the Enterprise plans.

A comparison of Enterprise suites

A comparison of Enterprise suites

There are three main enterprise plans:

  • E1 – it gives you Office Online and a significant number of communication and collaboration services. Apart from what you got in Business Essentials, you also have Stream and work management apps like Planner or To Do.
  • E3– it extends E1 with data analytics, additional security features, and Office client.
  • E5 – best all-in-one productivity suite, which adds complete protection, Power BI Pro, Advanced DLP, and user activity monitoring.
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Office 365 for frontline workers

For employees using primarily mobile devices, e.g. people working directly with customers, there are Frontline Worker Plans available.

Summary of the Frontline suites

Summary of the Frontline suites

Remember that Exchange Kiosk provides only a small 2GB Mailbox that can be accessed by a browser or POP3 protocol, which means no real synchronization with Outlook.

Additionally, F3 options give access to Power Apps and automation tools. Microsoft 365 F3 also includes advanced security features.


There are a couple of questions that customers often ask.

What is the difference between Microsoft 365 Business and Microsoft 365 Apps?

The Apps suite is a limited option that doesn’t include Exchange email or Teams. It is fine if you only need Office client to work with your files. Depending on your plan, Business suites also have more advanced analytics and security features.

Is the Office client the only difference between E1 and E3?

Of course not. There are much more security options in E3 such as email and documents encryption and DLP. You have better control over your inboxes, mail flow, and data analytics. E3 gives you access to on-premises enterprise licenses where E1 offers only a standard license.

Which plan is the best for me?

Always start with the users. Are there less than 300? Then Business suites are likely best. More than that? Go for Enterprise. As for which particular plan to choose – it always depends on your business need. Talk to your people, find out what they use daily, and let that inform your choice.

How best to choose?

Start with a business need or a problem. Then, try to solve it with the cloud. If you do it the other way around – start with cloud features and try to find a need for them – you will fail. It won’t be a spectacular fail, though – you probably just won’t get a budget for the project.

What do others choose most frequently?

The usual mix of plans we recommend is E1 + E3 or E1 + E5. That’s right – you can mix and match if you need to.


This is just a snapshot of the options available when it comes to buying Office 365.

In essence, the more expensive the plan, the more options you have for collaboration, data analytics, and security. But this is really an understatement. It can be difficult to figure out exactly what you need.

Don’t worry though – we can help you choose the right plan. Let us know what you’d like to achieve and we’ll use our experience to recommend the best option for your business. We can also help you implement the services and train your people to make the best use of them. Contact us and let’s find you the right plan.

Key takeaways
  1. There are three main O365 suites: Business, Enterprise, and frontline workers.
  2. Within the Business Suite, 3 plans are available: Basic, Standard, and Premium. The Standard plan doesn’t include an Office client but has email and Yammer. Premium gives advanced analytics and security.
  3. The Enterprise Suite has 3 main plans: E1, E3, and E5. E1 doesn’t include Office client or information protection. E3 has most of the necessary features. If you’d like to have additional functionalities, such as Teams phone system or audio conferencing, consider the E5 license.

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