Choosing the right Microsoft Office 365 license is essential for any modern business looking to improve productivity, streamline operations, and control costs. With multiple licensing tiers — Office 365 E1, E3, and E5 — it can be confusing to know which one fits your organization best. In this guide, we explain the key differences, pricing, and features so you can make an informed decision.

Office 365 Licensing Prices (Per User/Month)

Microsoft Licensing Plan Price Per User Per Month
Microsoft 365 E5 (no Teams) $54.80
Microsoft 365 E3 (no Teams) $33.80
Microsoft 365 F3 (no Teams) $7.50
Microsoft 365 F1 (no Teams) $1.75
Microsoft 365 Business Basic (no Teams) $4.80
Microsoft 365 Business Standard (no Teams) $10.30
Microsoft 365 Business Premium (no Teams) $19.80
Microsoft 365 Apps for business $8.30
Microsoft 365 Apps for enterprise $12.00
Office 365 E1 (no Teams) $7.80
Office 365 E3 (no Teams) $20.80
Office 365 E5 (no Teams) $35.80
Office 365 F3 (no Teams) $3.50

The base cost per user for Microsoft 365 Business and Enterprise plans ranges from $4.80 to $54.80, which can become a significant investment for larger organizations. However, businesses can reduce overall IT expenses by bundling advanced features such as Rights Management and Cloud PBX within their Microsoft 365 licenses. Substantial cost savings are also possible for organizations that replace third-party tools for Anti-Virus, eDiscovery, Multi-Factor Authentication (MFA), and SIEM with built-in Microsoft 365 security and compliance capabilities.

Difference Between Microsoft 365 Enterprise, Microsoft 365 Business, and Office 365 Enterprise Plans

Many users use the terms Microsoft 365 and Office 365 interchangeably, but they are not the same product. These solutions are designed for different business needs and include different feature sets.

Office 365 is Microsoft’s core productivity suite that includes the familiar applications such as Outlook, Word, Excel, PowerPoint, and OneNote. It focuses primarily on collaboration and productivity tools and represents only one component of the broader Microsoft 365 ecosystem.

On the other hand, Microsoft 365 is a complete business solution that combines multiple technology suites into one integrated license. Microsoft 365 licenses are available in three main categories: Enterprise, Business, and Apps plans.

Microsoft 365 Enterprise Plans

Microsoft 365 Enterprise licenses bundle three major suites into a single solution:

  • Office 365 (productivity and collaboration tools)

  • Enterprise Mobility and Security (EMS) (identity, security, and compliance features)

  • Windows Enterprise (advanced operating system management and security)

These plans are available in different tiers such as E5, E3, F3, and F1, each offering increasing levels of security, compliance, and management capabilities depending on business requirements.

Microsoft 365 Business Plans

Some Microsoft 365 Business licenses also include all three suites—Office 365, EMS, and Windows—but with more limited features compared to Enterprise plans. These licenses are designed specifically for small and mid-sized organizations and are capped at 300 users per tenant, making them unsuitable for large enterprises that require unlimited scalability.

Office 365 Enterprise Plans

Office 365 Enterprise plans focus solely on productivity and collaboration tools without including the advanced security and device management features found in Microsoft 365 Enterprise plans. They are ideal for organizations that only need Office applications and cloud-based communication tools without full endpoint or identity management.

Important Note on Purchasing Through GoDaddy

We strongly advise against purchasing Microsoft 365 or Office 365 licenses through GoDaddy. These plans often come with hidden costs, restricted feature availability, and limited administrative control. Businesses may also face difficulties when migrating or expanding their Microsoft environment later.

For better flexibility, security, and full feature access, it is recommended to purchase Microsoft licenses directly through an authorized Microsoft partner.

Microsoft 365 E5

The Microsoft 365 E5 license is often viewed as a premium or luxury option because of its higher cost. However, in today’s cybersecurity landscape, it has become a strategic necessity for organizations that require advanced security, compliance, and automation features.

Most IT teams are already overworked and understaffed while cyber threats continue to grow at an exponential rate. Even when employees work from the office, constant internet connectivity makes every organization a potential global target. Sensitive business data and intellectual property can easily be exposed in unsecured environments.

IT professionals are responsible not only for maintaining critical business operations but also for protecting their organizations from both external and internal threats. With shrinking budgets and reduced workforce capacity, this responsibility becomes increasingly complex.

At a minimum, organizations should assign Microsoft 365 E5 licenses to users with broad system access or administrative privileges. We strongly encourage businesses to evaluate the potential financial and operational damage a security breach can cause—because it is no longer a question of if a breach will happen, but when.

Microsoft 365 E5 – Overview

Price: $54.80 per license / month
Best For: Enterprises seeking the most complete productivity, security, and compliance solution available.

What You’ll Get with Microsoft 365 E5

  • AI and rules-based automatic retention policies in Teams, Outlook, SharePoint, and OneDrive

  • Automatic sensitivity labeling in Microsoft 365 apps, Exchange, SharePoint, and OneDrive

  • Azure Virtual Desktop

  • Cloud user self-service password change and reset with hybrid on-premises write-back

  • Compliance Manager with Premium Regulations

  • Data Loss Prevention (DLP) for Teams chat, emails, files, and endpoints

  • Microsoft Advanced Threat Analytics

  • Microsoft Defender XDR Full Suite

  • Microsoft Purview Insider Risk Management and Information Barriers

  • Mobile Device Management (MDM) and Mobile Application Management (MAM)

  • Privileged Access Management and Privileged Identity Management

  • Risk-based Conditional Access and Identity Protection

  • Secure Score, Advanced Security Reports, and Access Reviews

  • Sensitivity labels based on advanced classifiers (Trainable Classifiers, EDM, Named Entities, Contextual)

  • User provisioning including Windows Autopilot and Single Sign-On (SSO)

  • Windows Autopatch

  • Windows Information Protection

  • Azure Information Protection Plan 2

  • Desktop client applications

  • Exchange Plan 2 (100 GB mailbox + up to 1.5 TB archive)

  • Microsoft Entra ID P2

  • Microsoft Intune Plan 1

  • Power BI Pro

  • SharePoint Plan 2 (1+ TB OneDrive storage)

Microsoft 365 E3

When compared to Microsoft 365 E5, the Microsoft 365 E3 license offers a similar set of productivity tools and storage capacity but does not include advanced machine-learning or automated security and compliance features.

Microsoft 365 E3 is designed for organizations that want strong productivity, collaboration, and security controls without the additional cost of automation and AI-driven protection included in E5.

Microsoft 365 E3 – Overview

Price: $33.80 per license / month
Best For: Employees who need best-in-class productivity and collaboration tools, and administrators who require a secure and compliant IT environment.

What You’ll Get with Microsoft 365 E3

  • Azure Virtual Desktop

  • Cloud user self-service password change and reset with hybrid on-premises write-back

  • Compliance Manager

  • Conditional Access

  • Data Loss Prevention (DLP) for emails and files

  • Manual retention labels

  • Microsoft Advanced Threat Analytics

  • Mobile Device Management (MDM) and Mobile Application Management (MAM)

  • Secure Score and Advanced Security Reports

  • User provisioning including Windows Autopilot and Single Sign-On (SSO)

  • Windows Autopatch

  • Windows Information Protection

  • Azure Information Protection Plan 1

  • Desktop client applications

  • Exchange Plan 2 (100 GB mailbox + up to 1.5 TB archive)

  • Microsoft Defender for Cloud Apps Discovery

  • Microsoft Defender for Endpoint Plan 1

  • Microsoft Entra ID P1

  • Microsoft Intune Plan 1

  • SharePoint Plan 2 (1+ TB OneDrive storage)

 

Microsoft 365 Frontline Licenses Overview

Microsoft Frontline licenses are designed for employees who require secure digital access but do not spend most of their time creating or managing content. These users often work in the field rather than at a desk, yet still need enterprise-grade security and compliance features.

For organizations with strict regulatory or compliance needs, the Microsoft 365 F5 Security and Compliance Add-On enhances security and compliance features to match those of a Microsoft 365 E5 license, while maintaining limited productivity tools and lower storage capacity.

Microsoft 365 F3 License

Microsoft 365 F3 closely aligns with the Enterprise Mobility and Security E3 suite. However, it excludes some advanced features such as Microsoft Defender for Endpoint Plan 1 and Data Loss Prevention (DLP) for emails and files. It also includes reduced productivity applications and lower storage limits.

Key Details

Price: $7.50 per user/month
Best For: Enterprises that require consistent security and compliance across frontline staff with limited productivity needs.

Features Included

  • Azure Virtual Desktop

  • Cloud-based self-service password reset with hybrid on-premises write-back

  • Compliance Manager

  • Conditional Access

  • Manual retention labels

  • Microsoft Advanced Threat Analytics

  • Mobile Device Management (MDM) and Mobile Application Management (MAM)

  • Secure Score and Advanced Security Reports

  • User provisioning with Windows Autopilot and Single Sign-On (SSO)

  • Windows Autopatch

  • Windows Information Protection

  • Azure Information Protection Plan 1

  • Microsoft 365 web and mobile apps (no desktop applications)

  • Exchange Kiosk (2 GB mailbox)

  • Microsoft Defender for Cloud Apps Discovery

  • Microsoft Entra ID P1

  • Microsoft Intune Plan 1

  • SharePoint Kiosk (2 GB OneDrive storage)

Microsoft 365 F1 License

The primary difference between Frontline and Enterprise licenses is the limited productivity tools and reduced storage. Microsoft 365 F1 further restricts access by offering read-only web and mobile applications instead of full editing capabilities. Both Microsoft 365 F3 and F1 do not support desktop applications.

Key Details

Price: $1.75 per user/month
Best For: Enterprises that need secure access for frontline workers with minimal productivity requirements.

Features Included

  • Azure Information Protection Plan 1

  • Cloud-based self-service password reset with hybrid on-premises write-back

  • Compliance Manager

  • Conditional Access

  • Exchange Kiosk (2 GB mailbox)

  • Manual retention labels

  • Microsoft 365 web and mobile apps (read-only)

  • Microsoft Advanced Threat Analytics

  • Microsoft Defender for Cloud Apps Discovery

  • Microsoft Entra ID P1

  • Microsoft Intune Plan 1

  • Mobile Device Management (MDM) and Mobile Application Management (MAM)

  • Secure Score and Advanced Security Reports

  • SharePoint Kiosk (2 GB OneDrive storage)

  • User provisioning with Windows Autopilot and Single Sign-On (SSO)

Microsoft 365 Business Licenses

Microsoft 365 Business plans are specifically designed for small and medium-sized businesses that do not require the full feature set of Enterprise licenses. Unlike Enterprise plans, which have unlimited user capacity, Microsoft 365 Business licenses are limited to 300 users per tenant.

These plans offer essential productivity tools combined with security and device management features, making them ideal for growing organizations that need reliable and cost-effective IT solutions.

Microsoft 365 Business Premium (No Teams)

Microsoft 365 Business Premium is the most advanced business license available without upgrading to an Enterprise plan. It includes business-grade versions of Microsoft Defender and Windows 11 Business, along with Microsoft Intune for device and application management. While it does not provide the complete Enterprise Mobility and Security (EMS) E3 suite, it offers a very close alternative for organizations that need strong security and compliance tools.

Key Details

Price: $19.75 per user/month
Best For: Businesses with fewer than 300 users that require enhanced security and compliance capabilities without the full EMS feature set.

Features Included

  • Azure Virtual Desktop

  • Cloud-based self-service password reset with hybrid on-premises write-back

  • Compliance Manager

  • Conditional Access

  • Data Loss Prevention (DLP) for emails and files

  • Manual retention labels

  • Mobile Device Management (MDM) and Mobile Application Management (MAM)

  • Secure Score

  • User provisioning with Windows Autopilot and Single Sign-On (SSO)

  • Windows Information Protection

  • Azure Information Protection Plan 1

  • Desktop Office applications

  • Exchange Plan 1 (50 GB mailbox + 50 GB archive)

  • Microsoft Defender for Cloud Apps Discovery

  • Microsoft Defender for Business

  • Microsoft Entra ID P1

  • Microsoft Intune Plan 1

  • SharePoint Plan 1 (1 TB OneDrive storage)

  • Windows 11 Business

Microsoft 365 Business Standard (No Teams)

Previously known as Office 365 Business Premium, Microsoft 365 Business Standard provides essential productivity tools such as desktop Office applications and business email. However, it does not offer the same advanced security and compliance capabilities found in Business Premium.

Key Details

Price: $10.25 per user/month
Best For: Businesses with fewer than 300 users that need desktop Office apps, cloud services, and professional email hosting.

Features Included

  • Desktop Office applications

  • Exchange Plan 1 (50 GB mailbox + 50 GB archive)

  • SharePoint Plan 1 (1 TB OneDrive storage)

  • Cloud-based self-service password reset

  • Compliance Manager

  • Exchange Online Protection

  • Mobile Device Management (MDM)

  • Secure Score

  • User provisioning with Windows Autopilot and Single Sign-On (SSO)

Microsoft 365 Business Basic (No Teams)

Microsoft 365 Business Basic is one of the most affordable plans that still includes Exchange Online Plan 1, making it a strong choice for frontline workers who rely heavily on email but do not require desktop Office applications or large storage capacities.

Key Details

Price: $4.75 per user/month
Best For: Organizations with fewer than 300 users that do not require desktop Office apps or extensive cloud storage.

Features Included

  • Cloud-based self-service password reset

  • Compliance Manager

  • Exchange Online Protection

  • Exchange Plan 1 (50 GB mailbox + 50 GB archive)

  • Mobile Device Management (MDM)

  • Secure Score

  • SharePoint Plan 1 (1 TB OneDrive storage)

  • User provisioning with Windows Autopilot and Single Sign-On (SSO)

Microsoft 365 Apps Licenses

Microsoft 365 Apps licenses focus exclusively on Microsoft’s core Office productivity suite, including Word, Excel, PowerPoint, and Outlook. Unlike one-time purchase versions of Office, these subscription-based licenses ensure that applications are always updated with the latest features and security enhancements.

These plans are ideal for users who only need Office applications without email hosting, advanced security tools, or cloud collaboration services.

Microsoft 365 Apps for Enterprise

Previously called Office 365 ProPlus, Microsoft 365 Apps for Enterprise is designed for large organizations that require advanced deployment controls, enhanced compliance features, and centralized IT management. It provides fully updated desktop Office applications (excluding Outlook and Teams) along with stronger policy and security controls than Microsoft 365 Apps for Business.

This plan is ideal for enterprises using third-party communication tools or for small to mid-sized businesses that require enterprise-grade IT control.

The Basics

Price: $12 per user/month
Best For: Users who depend heavily on Office applications and need compliance and basic business intelligence (email hosting and Teams not included).

Features Included

  • Delve

  • Microsoft 365 Mobile App

  • Microsoft Forms

  • Microsoft Whiteboard

  • Office Add-in Support

  • Office Applications (PC & Mac)

  • Office Cloud Policy Service

  • Office for the Web (including Visio)

  • Office Group Policy Support

  • Office Telemetry

  • OneDrive for Business Plan 1

  • Roaming Settings

  • Shared Computer Activation

  • Sway

  • Virtual Desktop Use Rights

Microsoft 365 Apps for Business

Formerly known as Office 365 Business, Microsoft 365 Apps for Business offers automatically updated Office desktop applications for up to 300 users. It does not include the advanced security, compliance, or administrative tools found in the Enterprise version.

The Basics

Price: $8.30 per user/month
Best For: Small businesses with fewer than 300 users that only need Office applications and cloud file storage (email hosting and Teams not included).

Features Included

  • Microsoft 365 Mobile App

  • Microsoft Forms

  • Office Applications (PC & Mac)

  • Office for the Web (including Visio)

  • OneDrive for Business Plan 1

Office 365 Enterprise Licenses Overview

Office 365 Enterprise provides Microsoft’s core productivity suite including Outlook, Word, Excel, PowerPoint, and collaboration tools. Unlike Microsoft 365 Enterprise plans, Office 365 Enterprise licenses do not include Windows Enterprise or advanced security suites (Enterprise Mobility + Security).

These plans are suitable for organizations that already use third-party security and operating systems.

Office 365 Enterprise E5 (No Teams)

Office 365 E5 delivers Microsoft’s most advanced productivity and compliance tools without the Windows and EMS security layers found in Microsoft 365 E5. It is best for organizations that rely on external security solutions but want maximum productivity features.

The Basics

Price: $35.80 per user/month
Best For: Organizations needing a full productivity suite without additional security or OS components.

Features Included

  • AI-based automatic retention policies (Outlook, SharePoint, OneDrive)

  • Automatic sensitivity labeling

  • Cloud self-service password reset with hybrid write-back

  • Compliance Manager

  • DLP for emails and files

  • Mobile Device Management (MDM)

  • Privileged Access Management

  • Secure Score

  • Advanced sensitivity labels (Trainable Classifiers, EDM, Contextual rules)

  • Desktop Office apps

  • Exchange Plan 2 (100 GB mailbox + up to 1.5 TB archive)

  • Power BI Pro

  • SharePoint Plan 2 (1+ TB OneDrive storage)

Office 365 Enterprise E3 (No Teams)

Office 365 E3 offers similar productivity and storage as E5 but with fewer automation features and without the advanced security included in Microsoft 365 E3.

The Basics

Price: $20.80 per user/month
Best For: Businesses that need core productivity tools without advanced security or compliance features.

Features Included

  • Cloud self-service password reset with hybrid write-back

  • Compliance Manager

  • Desktop Office applications

  • DLP for emails and files

  • Exchange Plan 2 (100 GB mailbox + up to 1.5 TB archive)

  • Manual retention labels

  • Mobile Device Management (MDM)

  • Secure Score

  • SharePoint Plan 2 (1+ TB OneDrive storage)

  • User provisioning with Windows Autopilot and Single Sign-On (SSO)

Office 365 Enterprise E1 (No Teams)

Office 365 E1 is the most economical Enterprise license and focuses on web-based productivity services. It can be paired with Microsoft 365 Apps for Business or Enterprise for desktop application access.

The Basics

Price: $7.80 per user/month
Best For: Users who do not require desktop versions of Outlook or Office applications.

Features Included

  • Compliance Manager

  • Exchange Plan 1 (50 GB mailbox + 50 GB archive)

  • Manual retention labels

  • Mobile Device Management (MDM)

  • Secure Score

  • SharePoint Plan 1 (1 TB OneDrive storage)

  • User provisioning with Windows Autopilot and Single Sign-On (SSO)

Office 365 Enterprise F3 (No Teams)

Available only through CSP partners, Office 365 F3 is the lightest Enterprise license. It provides minimal productivity and collaboration tools and does not include the security features of Microsoft 365 F3.

The Basics

Price: $3.50 per user/month
Best For: Desk-less, mobile, line, and floor staff who do not need desktop Office applications.

Features Included

  • Compliance Manager

  • Exchange Kiosk (2 GB mailbox)

  • Manual retention labels

  • Microsoft 365 mobile and web apps (no desktop apps)

  • Mobile Device Management (MDM)

  • Secure Score

  • SharePoint Kiosk (2 GB OneDrive storage)

  • User provisioning with Windows Autopilot and Single Sign-On (SSO)