Microsoft 365 licensing, decoded: which plan actually fits your business
Microsoft repackaged its Business and Enterprise plans again in 2026. Here’s what actually separates Basic, Standard, Premium and E3 once you strip away the marketing names.
Most of the licensing confusion we see isn’t about price — it’s about not knowing which features are already included versus which ones need to be bought separately. Microsoft’s July 2026 packaging changes moved the goalposts again, so it’s worth a fresh look even if you last compared plans a year or two ago.
Business Basic: the lean entry point
Basic gives you web and mobile Office apps, business email, Teams and cloud file storage, but not the full desktop applications. It suits teams that live in a browser and rarely need Word or Excel installed locally. It’s also the one plan Copilot can’t attach to, since the desktop apps it integrates with aren’t part of it.
Business Standard: where most SMBs land
Standard adds the full desktop versions of Word, Excel, Outlook and PowerPoint on top of everything in Basic. For most office-based teams this covers the day-to-day need comfortably, and it’s the plan Copilot attaches to most cost-effectively for businesses that don’t yet need advanced device management or security add-ons.
Business Premium: security without the enterprise price tag
Premium builds on Standard with Microsoft Defender for Business, Intune device management, Conditional Access policies and Azure Information Protection. For a South African SMB that handles any client data worth protecting — which is most of them — Premium is usually the more defensible default than Standard, because phishing protection and device management stop being optional extras you have to bolt on later.
E3: for when you outgrow the 300-user cap
Business plans are capped at 300 users. Once you’re past that, or you need unlimited mailbox and OneDrive storage, Windows 11 Enterprise licensing, or advanced compliance tools like eDiscovery and Purview Information Protection, E3 becomes the relevant conversation. It carries a materially higher price than Premium, so it’s worth confirming you actually need those enterprise-grade extras rather than just assuming bigger is better.
A quick way to sense-check your current plan
If you’re paying for Basic but staff are constantly asking for desktop Office — you’re under-licensed. If you’re on Standard and have bought a separate antivirus, MDM tool, or email security add-on — Premium may already cost less than Standard plus those extras combined. If you’re on E3 purely for storage or mailbox size, and Business Premium’s new 100 GB mailboxes would cover it — you may be over-licensed. Licensing reviews are one of the quickest wins we do for clients, precisely because the plans get repackaged often enough that last year’s right answer isn’t always this year’s.