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Office 365 License Comparison

Office 365 License Comparison: Business Plans Vs. E5, E3 and E1

Choosing an Office 365 license is a critical step before migrating to the cloud. With multiple options for small, medium and enterprise businesses, navigating the differences can get overwhelming. This Office 365 license comparison will reveal the options available within Business and Enterprise options available to help you make the correct choice for your organization.

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Price Comparison for Office 365 Business Plans and Enterprise Licenses

When comparing Office 365 licenses, price is one of the first questions decision-makers ask. Here are the prices of each Office 365 Business and Enterprise license:

1 Year Agreement ($/user/month) 1 Month Agreement ($/user/month)
Office 365 Business Essentials $5.00 $6.00
Office 365 Business Plan $8.25 $10.00
Office 365 Business Premium $12.50 $15.00
Office Enterprise E1 $8.00 Annual Commitment Only
Office Enterprise E3 $20.00 Annual Commitment Only
Office Enterprise E5 $35.00 Annual Commitment Only
Office Enterprise Pro Plus $12.00 Annual Commitment Only

The base price per user for Office 365 Business and Enterprise Plans ranges from $5 to $30, and this cost can quickly add up for larger organizations. On the other hand, if you rely on certain functionalities like Rights Management or cloud PBX, bundling these services into your license can actually save your organization money.

To better weigh the costs to your organization, let’s compare the features of the Office 365 Business and Enterprise plans.

How Office 365 Enterprise and Business Plans Differ

Both the Office 365 Business plans and Enterprise plans are available for organizations with fewer than 300 employees.

Because larger companies are more likely to be using Office 365, you might be contemplating whether to go with a Business or Enterprise option.

Here are some major features you gain with Office 365 Enterprise plans:

  • Skype for Business Cloud (now Microsoft Teams) PBX and PSTN conferencing (PSTN calling is available as an add-on in E3 and E5)
  • Advanced Information Protection
  • Advanced Threat Protection
  • Active Directory integration
  • Power BI
  • Delve Analytics
  • Litigation Hold
  • Unlimited archive and mail storage
  • Enterprise app management

Enterprise plans are only available when purchased as a one-year commitment. However, Business plans are available month to month (for a slightly higher per-user price) and in yearly subscriptions.

Here’s a breakdown of all Office 365 Business plans so you can better understand how they differ.

Office 365 Business Plans

Office 365 Business plans were created for small businesses with fewer than 300 employees that might not need all the bells and whistles Office 365 offers.

Here’s what’s included in each Office 365 Business plan for small companies.

Office 365 Business Essentials

Looking to get basic Office 365 functionality? Office 365 Business Essentials offers business email with 50 GB mailbox storage, custom email domain and web versions of essential Office 365 applications like Outlook, Word, Excel and PowerPoint.

Here’s what you need to know about the Business Essentials license:

The Basics
Price $5/user/month (1-year agreement) or $6/user/month (1-month agreement
Who It's For Companies with fewer than 300 users that don’t rely heavily on Office 365 applications, online storage or need desktop applications
What You'll Get
Email with 50 GB mailbox
Custom email domain addresses
Web versions of Office 2016 applications: Outlook, Word, Excel, PowerPoint
1 TB of OneDrive storage
SharePoint (company-wide intranet and team sites to connect people to content, expertise and processes.)
Skype for Business: Unlimited HD video conferencing for up to 250 people.
Microsoft Teams chat-based workspace
Microsoft Planner to manage tasks and teamwork
Yammer to collaborate across departments and locations
FastTrack deployment support (when purchasing 50+ seats)
24/7 phone and web support

Office 365 Business

Next is the Office 365 Business plan. Here are the price and specs for this license option:

The Basics
Price $8.25/user/month (1-year agreement) or $10/user/month (1-month agreement)
Who It's For Businesses with fewer than 300 users that only need Office applications, cloud file storage and sharing (email hosting not included)
What You'll Get
Desktop versions of Office 2016 applications: Outlook, Word, Excel, PowerPoint and OneNote
Office Online: Web versions of the Office 2016 applications Outlook, Word, Excel and PowerPoint
OneDrive and 1 TB of OneDrive storage
FastTrack deployment support (for purchases of 50+ seats)
24/7 phone and web support

Office 365 Business Premium

The most expensive Business plan is Office 365 Business Premium. This license costs more than the Enterprise E1 option, so comparing the features is essential to choosing the right option.

The Basics
Price $12.50/user/month (1-year agreement) or $15/user/month (1-month agreement)
Who It's For Businesses with fewer than 300 users that need the latest desktop versions of Office applications, cloud services and email hosting.
What You'll Get
Email with 50 GB mailbox
Custom email domain addresses
Desktop versions of Office 2016 applications: Outlook, Word, Excel, PowerPoint, and OneNote
Web versions of Office 2016 applications: Outlook, Word, Excel, and PowerPoint
1 TB of OneDrive storage
SharePoint (company-wide intranet and team sites to connect people to content, expertise and processes)
Skype for Business: Unlimited HD video conferencing for up to 250 people
Microsoft Teams chat-based workspace
Microsoft Bookings to enable customers to schedule appointments
Microsoft Planner to manage tasks and teamwork
Yammer to collaborate across departments and locations
FastTrack deployment support (with purchase of 50+ seats)
24/7 phone and web support

Next, we take a look at the Office 365 Enterprise plans. As mentioned above, these are only available on a one-year commitment basis.

Office 365 Enterprise Plans

Office 365 Business plans are great for companies just starting out or that only require limited functionality. For organizations with 300+ users or those looking for a more robust solution, Office 365 Enterprise plans are available. With Enterprise plans, you can choose from Office 365 E5, E3 or E1 licenses.

Office 365 Enterprise E1

E1 is the cheapest Enterprise plan (and actually costs less than the Business Premium license). Here’s what you get with the E1 license:

The Basics
Price $8/user/month (annual commitment)
Who It's For Users that don't need desktop versions of Outlook or Office applications but still require eDiscovery and data governance.
What You'll Get
Email 50 GB mailbox (only accessible from Outlook online)
Skype for Business web conferencing, IM, online meetings and presence
OneDrive for Business
Video Sharing
Web versions of Office 2016 applications: Outlook, Word, Excel, and PowerPoint
File sharing and 1 TB OneDrive storage
HD video conferencing
Team sites
eDiscovery search
Data Governance manual classifications and manual policies for retention and deletion

Here’s how Office 365 Enterprise E1 differs from Business Premium:

  • With E1, you can only access email via the online application.
  • With E1, you lose desktop versions of Office applications. You must use the online versions of Outlook and other Office applications like Word or PowerPoint online.

Office 365 Enterprise E3

The E3 license is one of the more popular options for digital-driven businesses. You gain email, archiving, information protection and more storage options for only $5-$7.50 more per user per month than Business Premium.

Here’s what’s included in E3:

The Basics
Price $20/user/month (annual commitment)
Who It's For Businesses that need more advanced BI, compliance, email, security and voice capabilities.
What You'll Get
Everything included in the Office E1 License
Office Client Apps
Legal compliance and archiving needs for email: archiving, eDiscovery hold and export, mailbox hold
Information protection: message encryptions, rights management, data loss prevention
Azure Rights Management and document management functions: archiving, rights management, data loss prevention and document-level encryption.
Email storage for in-place archive
Unlimited OneDrive storage
eDiscovery legal hold
eDiscovery export and case management
Hosted voicemail support

The Office 365 Business Premium plan is most comparable to the Enterprise E3 plan in terms of base features.

Unlike Business Premium, E3 includes: 

  • Exchange Online Archiving (EOA) and Legal Hold
  • Unified eDiscovery Center
  • Rights management, data loss prevention and encryption
  • Ability to add on PSTN

Office 365 Enterprise E5

Building off the E1 and E3 business plans, Office 365 E5 is the highest tier Microsoft offers. With this license, you gain: 

The Basics
Price $35/user/month (annual commitment)
Who It's For If you use or plan to use Skype for Business Cloud PBX, we recommend the Office 365 E5 license. For $35/user/month, you gain a complete, consolidated phone system along with all functionality available within Office 365.
What You'll Get
Everything included in E3 and E5 licenses
Enhanced security features: Advanced ediscovery, secure attachments and URLs and access controls
Microsoft’s Business Intelligence tools for end user organizational analytics
Enterprise voice with Skype for Business (on-premises only)
Skype for Business Cloud PBX
Unlimited OneDrive storage
PSTN conferencing to dial in to Skype meetings from anywhere
Cloud-based call management
Advanced analytics with Power BI Pro and Microsoft MyAnalytics
Advanced eDiscovery
Advanced Data Governance
Advanced security with Advanced Threat Protection and Customer Lockbox
Enhanced visibility and control of your Office 365 environment

Next, we look at Office 365 Enterprise ProPlus. It is the last Enterprise plan offering.

Office 365 Enterprise ProPlus:

Office 365 Enterprise ProPlus offers a unique option for users who don’t need email access but require more advanced functionality than the Office 365 Business plan offers.

The Basics
Price $12/user/month (annual commitment)
Who It's For Users that rely heavily on Office 365 applications on mobile devices, do not need email access but require compliance and basic business intelligence.
What You'll Get
File sharing and 1 TB OneDrive online document storage
Fully installed Office on PC/Mac
Office apps on tablets and phones
Self-service BI in Excel
Office Online: Create, view and edit rights for online versions of core Office apps for collaborating on documents
Sway for Office 365
eDiscovery search
On-premises Active Directory sync for single sign-on
Mobile device management

If any license doesn’t suit your needs, you can also add on specific features like Skype Cloud PBX. But often, the cost of upgrading is cheaper than ballooning a license with monthly add-on charges. (Read more about add-ons here.) You can also mix and match licenses depending on user needs to better control costs.

Agile IT’s cloud licensing services make it easy to purchase, transfer and manage your licenses. As your cloud solutions provider, Agile IT handles all billing and subscriptions for your Office 365 products. You continue paying Microsoft the monthly license fee, and we take care of the rest.

Have questions about which Office 365 license is right for your organization? Request a quote to see how much you can save.



  • Sharon Fry says:

    Excellent article, exactly what I was looking for!
    A question regarding the statement, “With E1, you can only access email via the online application.” Does this mean if a user already has a retail version of Office 2010, 2013, or 2016 on their computer, that Outlook will not be able to be used as the client desktop application?
    Thank you!

    • Gaby Ramirez says:

      Hi Sharon,

      I’m glad you found this article helpful. That’s a great question. If you’ve already purchased the retail version of Office 2010, 2013 or 2016 separately, you can access Outlook via the client desktop application (except if you purchased a home and student license).

      Please let me know if you have any other questions.

      Thank you!

      • Spyridon Karampinis says:

        Let me add something more

        E1 Users are allowed to use POP3 or IMAP protocol and not MAPI to connect to O365 Mailbox

        Kind regards

        • Sedate says:

          There is no issue with connecting to an E1 subscription with your own version of Outlook. Support is available for IMAP, POP AND MAPI. I support many E1 subscription users using Outlook to connect and the MAPI feature is present in the Admin panel for each E1 licensed user

  • Aaron Brown says:

    Microsoft’s site is a little confusing so I wanted to ask here:

    We want something like E1 but with Office applications.

    1) I read that OBP only supports up to 300 users. Is this correct or incorrect?
    2) Does OBP support archiving online as well as manual retention / deletion policies like E1. In addition, if Office Business Premium supports archiving, does outlook provided in OBP offer in-place archiving in Outlook program itself?
    3) Are there any online services included with E1 that are not available with Office Business Premium?
    4) We’re here trying to figure out if it’s worth paying $12.50 vs $20 of E3. Not all users would need E3 but would like to at least have the features of E1 but with office desktop applications and with the online services of E1.

    I am going by this article here so you can see what I am confused.

    • Rochelle Willoughby says:

      Hi Aaron,
      Thanks for reaching out. To answer your questions:

      1. That is correct: https://products.office.com/en-us/compare-all-microsoft-office-products?tab=2. The maximum users are listed in the more information settings.
      2. The version of Outlook provided in Business Premium is the same as the one in E3/E5, so application features are the same. If you’re looking for something along the lines of Online Archiving and In-Place hold at the Exchange server level, Online Archiving is not available with Business Premium without an add-on license. In-Place holds in Exchange Online are being retired and transitioned to the new Security and Compliance Center retention settings.
      3. E1 and Business Premium are feature mirrored essentially. E1 is obviously missing the local Office install as well as not having a maximum user limit.
      4. It is possible to mix and match licenses within Office 365. Something like 300 users on E3 and 150 on E1. We’ve handled migrations and licensing for customers who do this fairly often. Just keep in mind that if you have any type of compliance requirements, at minimum you should be looking at E3. Things like Data Loss Prevention (DLP), eDiscovery, and litigation hold aren’t available in E1 or Business Premium. Additionally, not all accounts may need all of the Office 365 applications. If you have users who only need email with Online Archiving for example, there is the Exchange Online Plan 2 license.

      Please let me know if you have any further questions. Thanks again!

  • Manikandan Narayanan says:

    Good Article,

    In E3 License, Can I restrict providing One Drive to Users to avoid Data leaking. If it is not possible to restrict then Can I put access control like location based or device based etc., That is, I do not want users to download any Intellectual property related documents in any of their personal devices or outside of our company premises.
    Pl reply.

  • Paul Adeleke says:

    I have a E3 license, and at some point I get a message that says I am getting out of storage while using the online version. WHat does this mean ? How can I see what storage space is used up and how can I increase the storage. I dont seem to see anything under subscription.

    By the way, I am not using the full features of 365 as I have my 4 email accounts setup as connected accounts and using it for about 3 years now, My office 365 one-drive is pretty empty and I dont use other BI features or lync etc.
    Please assist

  • Don McGowen says:

    I am looking to build a tenant for our Test domain. There will not be many mailboxes. We want something to use for testing Powershell creating mailboxes as well as some other things. We also do not need to send email externally. Do we still need to buy the Domain so Office 365 can authenticate it? I can’t add another domain to our existing Tenant without authenticating. And last, what version would you recommend and where do I start?

    • Gaby Ramirez says:

      Hi Don,
      Thanks for reaching out. If you want to use a vanity domain in Office 365, you must own and verify it in the tenant. A lot of times, our customers just use a subdomain of their primary (like test.agileit.com). Hope that helps. Please let me know if I can answer anything else for you.

  • Hi,
    We are a fairly small and building enterprise.
    Right now we have a mixture of Enterprise E1, Business Premium and Business licenses.
    I need to offer a large percentage of my employees the desktop version of office with an Azure domain presence.
    Will the above license breakdowns do this for me or am I just asking for trouble?
    Are the Business accounts no able to access their online capabilities without also having an Enterprise License?


    • Gaby Ramirez says:

      Hi Steve, thanks for reaching out. E1 doesn’t include the full Office Pro Plus desktop software, only the web applications. The online components in the small business plans will function just the same as their enterprise counterparts. It’s just that Business and Business Premium have maximum user count limits.

      Hope that helps!

  • Gordon Hampson says:

    Can I use an outlook app on a phone to view my email with E1

    • Sean Spicer says:

      You can use any email app to access email with E1, but it does not include any of the applications, as you are limited to the web apps. Office 365 web apps do work on mobile devices, but the experience is not the greatest, compared to the Office 365 native mobile apps.

  • Technig says:

    Which one is best for reducing the cost for 50-100 users? We currently using office 2013 and want to upgrade.

    • Sean Spicer says:

      The specific answer is “it depends”. Are you subject to any compliance requirements and do you use any additional security platforms? E1 is most cost effective for small teams, E3 is cheaper for larger groups, but the services rolled into E5 make it the best overall solution, even though it can be more expensive. Additionally, you can combine license types, so splitting your licenses can be offer even better savings. If you want to discuss your unique needs, you can book a 30 minute call with us here.

  • Dean says:

    I Have a customer going on Maternity leave and she needs to have Excel on the Server so when she logs into the server via RDP to do some work she has Excel to work on accounting generated Business report spreadsheets. What is the Cheapest legal way of putting just Excel on a Server 2012 R2 Server for one user to have access to? I have tried installing Office 2016 and it tells me it needs a Volume licence. There must be a cheap easy way of achieving this. I have suggested Open Source or Google Sheets but she is not comfortable in that environment.

    Any suggestion would be more than welcome.

    • Sean Spicer says:

      I’m not sure why she needs to use RDP for Excel. I would suggest just getting a single Office 365 for business license at $10.month (month to month, $8 is paid annually), and she would have her own Excel. Additionally, Microsoft recently uncapped the number of devices a user could have office installed on, but limited concurrent active devices to 2, so if she has an O365 license she uses at work, she can use it at home as well.

  • hirdey gupta says:

    Hi Sean, great article and discussion. My company is pretty slow in adopting cloud technologies. We have all the Microsoft product on premise today like Outlook, office products, SharePoint and so on. We, however, have convinced management to go SharePoint online at this point. This does not impact the business a lot and at the same time get to experience moving one thing to the cloud. Question is
    1> Can we get just subscription license for SharePoint only. If true then what else is included and the pricing
    2> Does it make sense to go with one of the Essential ones if there is no price difference in 1>
    Thanks and appreciate all your help

    • Sean Spicer says:

      Hirdy, Yes, you can license JUST SharePoint online, but you should be aware of the economy of scale. The functionality of the essential licenses (and the choice of any license really) depends on your company’s specific needs. Often essentials is used for first line workers who do not need a full office productivity suite all the time, but who may need occasional access to email, documents, etc. I’d suggest giving our cloud service advisors a call, as they are experts at aligning Microsoft licensing with business needs.

  • Steve Nelson says:

    Just the comparison I was looking for. Great write-up!
    All of my questions have been answered.

  • Javier says:

    Interrested in theMicrosoft Team app. If I have 6 people in a team each needs to buy a license at a monthly fee of $8 for a one year plan?

  • Fred says:

    So in summary, what is the major difference between E3 and E5?

    • Sean Spicer says:

      Security and Data Loss Protection abilities. With E5, you get governance controls like eDiscovery and litigation hold. More important you get the Advanced Threat Protection suite, which protects your users against malware, malicious URLs and zero-day attacks across mail, teams, SharePoint and OneDrive. It has also recently been expanded to include both manual and automated threat investigation and response capabilities.

  • Lisa Sheehy says:

    I need something that is HIPPA-compliant, with encryption (in-transit and at rest) etc. Otherwise we don’t need much, just Word, Excel and Power Point. 5 users. What system would be best?

  • Alexandros A. T. says:

    Hello Sean,
    I currently have an Exchange Online E1 plan and i was trying to figure out what are the exact restrictions and advantages i will have if i change my plan to office 365 business essentials.
    Both have 50gb mailboxes / free teams (up to a limit) / free online versions of ms office.
    The O365 BE has as extra the 1TB onedrive for business / SharePoint / and yammer and limit to 300users.
    The price difference is fine if we gain a 1TB onedrive for business.
    But our concerns is what do we loose except limitation to 300 users?! Is there other administrative limitations? Ex policies restrictions in shared mailboxes or so?

    Thank you for your time,

    • Sean Spicer says:

      Alexandros, give us a call. That 1tb is to start companywide, but you also get an additional .5tb per person. Honestly, moving from Exchange E1 to Office 365 is always going to be a net benefit, unless you business has a specific need for hosted exchange.

  • Johan says:

    Hi Sean,
    I have a question regarding an information provided on Microsoft website about Office 365 E3 plan. According to the information i can assing licenses up to 20 users. My question is, are these 20 licenses free or do i have to pay $20/user/month or the payment perhaps applies for when i want to add more than 20 users?

  • Jan says:

    I need dial in number and code functionality in MS TEAMS. Which license model support that out of the box

  • Richa Gupta says:

    We are a fairly small and building enterprise consist of 20 employees.
    Right now we have a mixture of licences like Home/Student and Office.
    We do indulge in lot of PPTs/ external-internalEmails and in extensive RnD for the accurate data.
    Will the above license breakdowns I am bit confused as to which one would suit our company.
    Does the antivirus comes along with the MS software. Apologies for sounding completely a layman.

    • Sean Spicer says:

      If you are looking for Antivirus/Anti-Malware, you will want to get Microsoft Windows Enterprise E3 for your users, which is an add-on license. If you want to bundle it in an all encompasing suite, Microsoft 365 E-3 includes Office 365, Windows Enterprise and the Enterprise Mobility and Security Suite, this gives you constantly updated versions of all of it, as well as advanced security for your information, devices and desktops.

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