The 2023 Guide to Microsoft 365 Licensing

The 2023 Guide to Microsoft 365 Licensing

If you want to utilise Microsoft 365 within your organisation, you’ll need to acquire a license. There is a lot that goes into working out exactly which license you’ll need to obtain for whatever you need, as there are tons of Microsoft licenses that Microsoft supplies for businesses.

Each one of these licenses is unique and provides different features and restrictions. However, it can be fairly difficult to understand the minute difference between each Microsoft 365 plan.

However, choosing the wrong option can leave you stranded without an important feature (or indeed, paying extra for features you don’t need). So, depending on your requirements, finding the right license is important to ensure that you get all of the features that your organisation requires.

In this article, we’re going to go over the different types of Microsoft 365 licenses that you can acquire, and what those licenses are best suited for.

Microsoft 365 Business Licensing

Microsoft 365 Business Licensing is the main license to use the core Microsoft 365 applications (Word, Powerpoint, Outlook, Excel, etc.) throughout your organisation.

There are four licenses that Microsoft provides here, all with different levels of 365 functionality. All four licenses come with 1TB of cloud storage per user and standard security.

Microsoft 365 Apps for Business

Microsoft 365 Apps for Business is the basic bundle that includes both the desktop and web versions of the traditional Microsoft Office apps, including Word, Powerpoint, and Excel throughout your organisation. This bundle does not, however, include cloud-based communications tools like Sharepoint and Microsoft Teams.

This is suitable for small businesses that don’t require the Teams and meeting functionalities that are part of the other 365 bundles and simply require the traditional Microsoft Office application suite. This is useful for those who primarily work offline (although this licence does include OneDrive storage).

Microsoft 365 Business Basic

If you’re looking for a basic and affordable introduction to the Microsoft 365 suite, Business Basic is Microsoft’s base bundle. Users are granted a Microsoft Outlook work email and given access to the web and mobile versions of Office applications as well as Teams, Exchange, and Sharepoint capabilities.

However, this license does not include the desktop editions of 365 applications, meaning that offline work cannot be performed using this license. It’s also missing core business features such as webinars and large meetings, and database visualisation.

The basic package is great for small teams that are mainly working online, however, is not great if your business wants desktop applications and a business-oriented workplace. If you’re used to the traditional Office suite, you may find that these web apps aren’t as fully fledged.

Microsoft 365 Business Standard

Microsoft 365 Business Standard is the standard license for 365 Business. It’s the bog standard choice for any organisation looking to get the most out of Microsoft 365 without breaking the bank.

While including everything within the Business Basic license, you also get access to desktop versions of all of the 365 applications, as well as access to Microsoft Publisher — for layout design and publishing — and Access — for databases.

This license includes the ability to host webinars and large meetings, as well as the ability to work offline. However, this doesn’t include more complex business features such as remote device management and advanced security tools, nor does it include cyber threat protection.

Microsoft 365 Business Premium

Microsoft 365 Business Premium has all of your 365 needs covered. Providing tools such as Intune and Azure Information Protection, this license provides all of your organisations with a high level of security tools within the 365 toolsets.

Remote device management and the ability to apply advanced security tools make this the top solution for any organisation looking to get the most out of Microsoft 365.

We’d recommend Business Premium for large businesses and enterprises that regularly deploy work devices, host cloud apps and have high user counts.

Microsoft 365 Enterprise Licensing

Enterprise users demand better, more comprehensive security tools – and that’s exactly what Microsoft 365 Enterprise offers over Business tiers. These additional security and compliance features, such as Advanced Threat Protection and Advanced Compliance, give IT admins that extra peace of mind – no matter how many users and devices are using the organisation’s cloud infrastructure.

Microsoft 365 E3

Microsoft 365 E3 is a license that provides both the suite of 365 tools and the surrounding infrastructure — and also provides users with a licence for Windows 365 E3.

This version of Windows 11 includes enterprise-focused features – such as Azure Active Directory, Windows Autopilot – a useful tool for setting up and pre-configuring new devices and Microsoft Intune.

Rather than just supplying the 365 applications, Microsoft 365 E3 also allows you to take full advantage of the security benefits of the Windows ecosystem within your organisation as well.

Microsoft 365 E5

E5 takes this up a notch – providing some more useful security and automation tools to enterprise users. In addition to the tools provided by 365 E3, Microsoft 365 E5 also provides access to powerful tools such as an upgraded Azure Active Directory P2 and Power BI Pro, unlocking unbounded power throughout your organisation.

E5 also gives access to Microsoft Defender capabilities on top of the already provided security tools built into Azure and Windows, meaning that your organisation is safe.

This is the ultimate 365 license and is the standard for any business looking to have access to the best tools to reach its full potential.

Microsoft Enterprise Mobility + Security Licensing

Microsoft Enterprise Mobility + Security plans are designed for businesses that heavily rely on Microsoft’s identity management system and have adopted a robust cloud workflow. These plans are functionally quite similar to Microsoft 365 Enterprise, but there are a few extra Azure Directory and security features to play with.

Microsoft Enterprise Mobility + Security E3

Microsoft Enterprise Mobility + Security E3 is the base security license for 365 Security.

It includes powerful security tools that you can use throughout your organisation — such as access management, data protection, and threat analytics — without any of the 365 Productivity features of the full 365 E3 package.

A useful tool is Azure Information Protection, helping you discover, classify and protect sensitive data and see where it is stored and transferred throughout your organisation.

Microsoft Enterprise Mobility + Security E5

In addition to the security features of Microsoft Enterprise Mobility + Security E3, Microsoft Enterprise Mobility + Security E5 introduces higher-level security features such as Azure Active Directory and Windows Defender for Identity.

This license is suitable for anyone looking for a robust security solution for their organisation without needing any of the 365 applications.

Azure AD P1

Azure Active Directory Premium P1 is an identity management solution that is used for remote and institution-wide access security.

Giving access to multi-factor authentication and working seamlessly with cloud integrations, this tool is fully Azure enabled.

Azure AD P2

Azure Active Directory Premium P2 enhances the functionality of P1 with feature-rich enterprise-level identity management and risk-based conditional access.

Microsoft 365 Education Licensing

Microsoft 365 A3

Microsoft 365 A3 is the base desktop education license for Microsoft 365.

As well as the free online applications that come with the Microsoft 365 A1 License, the Microsoft 365 A3 license also includes desktop versions of each one of the online cloud-based 365 Office applications —

  • Outlook (online only)
  • Word (online only)
  • Excel (online only)
  • PowerPoint (online only)
  • OneNote
  • Exchange
  • OneDrive
  • SharePoint
  • Skype for Business
  • Teams
  • Sway
  • Forms
  • Stream
  • Flow
  • PowerApps
  • School Data Sync

Microsoft 365 A3 also gives you access to —

  • Publisher
  • Microsoft Access
  • Bookings

Each license is for one student/faculty member, which gives them access to all of these tools to be able to help supplement their learning.

Microsoft 365 A5

Microsoft 365 A5 offers everything that comes with Microsoft 365 A3, as well as also offering more intensive security management and analytics tools.

These features — such as Power BI Pro, identity protection, advanced threat protection, compliance, and data loss protection — help any educational institution ensure that they have the tools that they need to be able to protect their organisation.

Microsoft Defender

Microsoft Defender Security plans are designed to help organisations protect themselves by preventing and detecting advanced threats. For the uninitiated, Microsoft Defender is a business-orientated anti-virus software and threat detection system.

These plans specifically are optimised for small and medium-sized enterprises to be able to keep their organisations safe. Endpoint devices are monitored by sensors within Windows 11 to process behavioural signals and identify threats.

These licenses can be used under a mixed-licensing strategy with other Microsoft 365 plans such as E3 and E5, meaning that you’re free to opt in or out of the Microsoft Defender suite as you please.

Microsoft Defender for Business

Microsoft Defender for Business gives you access to the best protection available against cyber threats and other malicious forces that could put your organisation under threat.

Microsoft Defender for Business is built for small and medium-sized businesses, and the features that it brings include —

  • Antispam protection
  • Antimalware protection
  • Next-generation protection
  • Attack surface reduction
  • Endpoint detection and response
  • Automated investigation and response
  • Vulnerability management
  • Centralized reporting
  • APIs (for integration with custom apps or reporting solutions)
  • Integration with Microsoft 365 Lighthouse

Microsoft Defender for Endpoint Plan 1

Microsoft Defender for Endpoint Plan 1 is a more advanced protection solution for your organisation. The capabilities of the advanced tools provided in Endpoint are more advanced than those in Defender for Business.

Included with Endpoint Plan 1 are —

  • Next-generation protection (includes antimalware and antivirus)
  • Attack surface reduction
  • Manual response actions
  • Centralized management
  • Security reports
  • APIs

Microsoft Defender for Endpoint Plan 2

Microsoft Defender for Endpoint Plan 2 builds upon the advanced tools provided within Endpoint Plan 1, including everything in the prior package.

Also included are —

  • Device discovery
  • Device inventory
  • Core Defender Vulnerability Management capabilities
  • Threat Analytics
  • Automated investigation and response
  • Advanced hunting
  • Endpoint detection and response
  • Endpoint Attack Notifications

Microsoft Defender Vulnerability Management

Microsoft Defender Vulnerability Management is a toolset that is an add-on for Microsoft Defender for Endpoint Plan 2. This is a licensing package that provides more vulnerability assessment tools for your organisation, such as —

  • Security baselines assessment
  • Block vulnerable applications
  • Browser extensions
  • Digital certificate assessment
  • Network share analysis
  • Hardware and firmware assessment
  • Authenticated scan for Windows

These tools are a supplement for the Defender for Endpoint Plan 2 licence and don’t include that which is offered within Defender for Endpoint Plan 2 within its licensing.

How We Can Help

Microsoft 365 features a powerful suite of enterprise tools and applications to help your business unlock its full potential, but the process of choosing the right Microsoft 365 licence can be incredibly complex. The number of options targeted to different sectors and types of businesses can make it challenging to know what’s built for you.

By and large, we find that most small-to-medium businesses (SMBs) will opt for the Microsoft 365 Business Standard or Premium tier. If you’re not using Azure for identity management, running complex web apps or managing a large fleet of business devices, you might not need the features offered by Microsoft Enterprise licenses.

If you’re looking to get started with Microsoft 365, our experts are here to help. We can easily help you figure out which licenses are available to you, and walk you through the whole process of acquiring these licenses to be able to ensure that you’re covered for whatever your organisation’s needs are. Our experts know Microsoft 365 inside and out and will be able to help you make sure that you have everything you need.

Contact us and see how our team of Microsoft 365 experts can help you today!