August 10, 2023

What M365 Licence Do I Need?

By Jamie Clark

Do you know which Microsoft 365 licence is right for your business? With the variety of M365 options available, from Microsoft 365 Business Basic up to E5 licensing, it can get confusing trying to figure out exactly which licence provides the capabilities your business needs.  

In this blog post, we will break down the key differences between all Microsoft 365 licences. Whether you need just the essentials or more advanced features, we'll cover which licence tier is the best fit based on your business needs and size.  

By the end, you'll understand the pros and cons of all M365 plans available. With this overview, you'll be able to make an informed decision on which M365 licence to choose to get the right set of services and applications for your business and budget. Let's dive in! 

Microsoft 365 Licences 

Microsoft offers several core licence options within its Microsoft 365 product line. These include: 

  • Microsoft 365 Business Basic  
  • Microsoft 365 Business Standard  
  • Microsoft 365 Business Premium  
  • Microsoft 365 E3  
  • Microsoft 365 E5  

This range of options allows you to choose the right set of apps, services, and features based on your organisation's size and specific business needs. Keep these M365 licence tiers in mind as we dive into the key differences between them in the next section. 

Microsoft 365 Business Basic 

What's Included:  

Microsoft 365 Business Basic provides web-based access to essential Office apps and collaboration tools. This includes Exchange Online for business email and calendar, web versions of Word, Excel, and PowerPoint, cloud storage with OneDrive, SharePoint Online, and team chat with Microsoft Teams.   

With Business Basic, you can access your email, documents, and contacts from your web browser without needing full Office desktop applications installed. However, advanced services like Desktop Office apps, and enterprise management capabilities are not included. 

Main Benefits: 

The core benefits of Microsoft 365 Business Basic are the ability to access business email through Exchange Online and use cloud-based Office web apps for basic document creation and editing. This provides a foundation for productivity and collaboration among small teams. The subscription can be scaled as needed for small or growing organisations. 

Best For:  

Due to the limited feature set, Microsoft 365 Business Basic works best for extremely small businesses, frontline workers, and organisations with very basic needs. For companies that only require essential email and Office web app access for a few users, Business Basic can provide a cost-effective option. However, most businesses will grow beyond its capabilities fairly quickly. 

Microsoft 365 Business Standard 

What's Included: 

Microsoft 365 Business Standard provides full, installed Office apps for desktops (Outlook, Word, Excel, PowerPoint) unlike the web-only access with Business Basic. This allows for the full Office suite capabilities on a local device.  

Business Standard also includes Exchange Online for robust email, calendar, and contacts. Additionally, there's SharePoint Online for intranet sites and content management, Teams for messaging and video meetings, and 1TB of cloud storage per user. 

Main Benefits:  

The main benefits of Microsoft 365 Business Standard are the full desktop Office apps, business-class email and collaboration tools through Exchange Online and SharePoint Online. It also offers integrations with Office mobile apps. This enhances productivity for users and teams. 

Best For: 

Microsoft 365 Business Standard is ideal for small businesses looking to equip teams with Office apps, basic file sharing/intranet, integrated email/calendar/contacts, and mobile access. It provides the essential collaboration and productivity tools small teams need without the advanced features required by large enterprises. 

Microsoft 365 Business Premium   

What's Included: 

Microsoft 365 Business Premium takes all the features of Business Standard like full Office apps, Exchange Online, and SharePoint Online and adds capabilities for identity management, security, and device management. This includes Azure Active Directory for user identity and access control, Intune for mobile device management, and advanced security tools. 

Main Benefits:  

The main benefits of Microsoft 365 Business Premium are: 

  • Apply security policies to help protect work data on company-owned and employee devices. 
  • Keep company data within approved apps across iOS, Android, and Windows PCs 
  • Remotely remove business data from lost or stolen devices 
  • Help protect against email threats, such as phishing that’s hidden in email attachments and links 
  • Restrict access to sensitive business information with Information Rights Management 

This robust set of security and management features mean managers can better monitor and protect company data. 

Best For:   

Microsoft 365 Business Premium is the ideal licence for growing small businesses that want to implement more IT controls and security measures. As well as if you are wanting to leverage Intune, Conditional Access or to get access to AVD. The advanced identity, policy, and data protection capabilities make Business Premium well-suited for regulated industries such as law or finance or any organisation with increased security needs. 

Microsoft 365 E3 

What's Included:  

Microsoft 365 E3 is designed for larger businesses and contains advanced capabilities like:  

  • Cloud storage 
  • Archiving and legal hold for compliance 
  • Advanced Threat Protection. 

E3 also provides desktop Office apps, Exchange Online, SharePoint Online, and Microsoft Teams. However, where it expands beyond lower tiers is with the advanced features that growing or highly regulated businesses often need. 

Main Benefits: 

The main benefits of Microsoft 365 E3 are that it offers robust scalability through add-ons like Enterprise Voice calling plans, provides powerful analytics and compliance tools, and supports the needs of large complex organisations. The advanced features in E3 go beyond the basics for productivity and collaboration. 

Best For: 

Microsoft 365 E3 licensing works best for organisations with over 300+ users, businesses that need to equip hundreds or thousands of employees with voice communications, analytics, archiving, enhanced security measures, and compliance tools. It has the scalability and support for advanced functionality that smaller businesses don't require. 

Microsoft 365 E5 

What's Included: 

Microsoft 365 E5 includes all the advanced capabilities of E3 like Enterprise Voice, analytics, archiving, and compliance tools.  

On top of that, it adds enhanced security, encryption, and data protection features. These include Azure Information Protection for classifying and encrypting data, Advanced eDiscovery, Advanced Data Governance, and Microsoft Cloud App Security. 

Main Benefits:  

The main benefits of Microsoft 365 E5 are the enterprise-grade security, compliance, and data protection measures it provides through capabilities like:  

  • Azure Information Protection 
  • Advanced Threat Protection 
  • Cloud App Security, 
  • Advanced eDiscovery.  
  • Analytics through Power BI and Excel 

For highly regulated industries, E5 can provide a comprehensive set of tools to safeguard data and meet legal requirements. 

Best For: 

Microsoft 365 E5 licensing is designed for the most highly regulated large enterprise organisations that have advanced compliance needs and strict data security requirements. The encryption, eDiscovery, and threat protection tools make it ideal for industries like finance and healthcare that handle sensitive data. It provides the maximum level of security and control. 


We've covered the core Microsoft 365 licence options. To recap, the main differences come down to: 

  • Business Basic provides email and Office web apps for very basic needs.  
  • Business Standard adds full, installed Office desktop apps and tools for enhanced productivity. 
  • Business Premium builds on this with identity management, security, and device management. 
  • E3 enables advanced features like analytics, archiving, and compliance. 
  • E5 takes this to the highest level with encryption, eDiscovery, and data protection. 

As you can see, the licences build on each other, adding more sophisticated features and enterprise capabilities as you go up the tiers.  

When choosing the right Microsoft 365 licence for your business, carefully evaluate how many users you need to support, what level of functionality is required, and what industry regulations you may need to comply with. Consider both your current and future business needs so you select a subscription with room to grow. 

If you need help determining the best Microsoft 365 licence for your specific organisation and situation get in contact with our expert team here at SpiderGroup. We can assess your business requirements and provide recommendations to help you select and deploy the optimal M365 plans and subscriptions.  

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