Which Microsoft 365 License is Right for Your Business?
Selecting the right Microsoft 365 license can feel overwhelming, but it doesn’t have to be. Each plan is designed to meet specific business needs, whether you’re a startup, a growing team, or an enterprise. This guide breaks down the most common licenses, (Business Basic, Business Standard, Business Premium, and Office 365 E3) to help you make an informed decision. We’ve included a Microsoft 365 license comparison guide too.
What is Microsoft 365?
Microsoft 365 is more than just productivity tools like Word, Excel, and Teams. It’s a cloud-based ecosystem that combines collaboration, communication, and security features tailored to businesses of all sizes.
The key to choosing the right plan lies in understanding what each license offers and how it matches your business needs.
The Four Key Licenses: A Detailed Look
1. Business Basic
Best for associate staff or businesses that primarily work in the cloud.
- What You Get:
- Web and mobile versions of Office apps like Word and Excel.
- 50 GB email mailbox per user with custom domain.
- 1 TB of cloud storage via OneDrive.
- Collaboration tools like Microsoft Teams and SharePoint.
- Who It’s For:
- Businesses with ad-hoc or associate staff using personal devices and accessing systems via browsers.
- Teams that don’t need desktop apps and prefer cloud-first working.
2. Business Standard
Perfect for small businesses that need both desktop and cloud-based tools.
- What You Get:
- Everything in Business Basic, plus:
- Full desktop versions of Office apps (Word, Excel, PowerPoint, etc.).
- Webinar capabilities with attendee registration and reporting.
- Microsoft Bookings for managing appointments.
- Everything in Business Basic, plus:
- Who It’s For:
- Small businesses seeking a balance of affordability and productivity.
- Teams needing offline access to Office apps.
3. Business Premium
Designed for organisations that prioritise security and device management.
- What You Get:
- Everything in Business Standard, plus:
- Microsoft Defender for Office 365 to safeguard against cyber threats.
- Microsoft Intune for mobile device and app management.
- Information protection tools to prevent accidental data sharing.
- Everything in Business Standard, plus:
- Who It’s For:
- Businesses looking to streamline IT with mobile device management through Intune.
- Charities (eligible for free access at the time of writing).
- Organisations managing sensitive data or a mobile workforce.
4. Office 365 E3
Built for enterprises or businesses with advanced compliance needs.
- What You Get:
- Everything in Business Premium, plus:
- Initial 5 TB of OneDrive storage per user, expandable to unlimited for subscriptions with five or more users.
- 100 GB email mailbox with long-term retention and the ability to send large attachments.
- Advanced compliance features like eDiscovery and legal hold.
- Everything in Business Premium, plus:
- Who It’s For:
- Enterprises requiring long-term email and file storage.
- Businesses in highly regulated industries that need extensive compliance and security tools.
Microsoft 365 License Comparison Chart
| Feature | Business Basic | Business Standard | Business Premium | Office 365 E3 |
|---|---|---|---|---|
| Office Apps | Web & Mobile Only | Desktop, Web & Mobile | Desktop, Web & Mobile | Desktop, Web & Mobile |
| 50 GB Mailbox | 50 GB Mailbox | 50 GB Mailbox | 100 GB Mailbox | |
| OneDrive Storage | 1 TB | 1 TB | 1 TB | 5 TB per user, expandable to unlimited |
| Collaboration Tools | Teams, SharePoint | Teams, SharePoint | Teams, SharePoint | SharePoint (Teams is an additonal license) |
| Advanced Security | No | No | Yes | Yes |
| Device Management | No | No | Yes (Intune) | Yes |
| Compliance Features | No | No | Limited | Advanced |
| User Limit | 300 | 300 | 300 | Unlimited |
Why Businesses Choose Different Licenses
- Budget-Friendly Cloud Tools:
Business Basic is a cost-effective choice for associate staff or businesses that rely on browser-based tools. - All-in-One Productivity for Small Businesses:
Business Standard offers offline and online functionality, making it a popular choice for small teams. - Enhanced Security and Device Management:
Business Premium is ideal for businesses looking to secure mobile devices and protect sensitive data with Microsoft Intune and advanced security features. Charities can also take advantage of this license for free. - Enterprise-Level Features:
Office 365 E3 is perfect for organisations needing longer email retention, compliance tools, and larger storage capacities, with scalability for growing teams.
Nxt Steps
Not sure which Microsoft 365 license is best for your team? Let Nxt Gen IT guide you through the decision-making process. We simplify the options, provide expert advice, and ensure a seamless setup tailored to your business.
👉 Contact Us Today to find the perfect Microsoft 365 plan for your needs!
If you’d like to compare features of Microsoft’s wider range of licensing, we recommend their license matrix. Not the easiest to read but very rich in terms of what is included.
Ben helps growing businesses turn technology into a driver of performance instead of a barrier. At Nxt Gen IT he works with SME leaders, recruiters, and fast-scaling teams to design solutions that improve reliability, strengthen security, and unlock growth.
With a background in email deliverability and cloud systems, Ben specialises in making sure businesses communicate effectively, keep data safe, and get the most from Microsoft 365. His experience spans solution design, managed IT services, and virtual CIO support, always with a focus on practical outcomes that reduce headaches for business owners.
Ben has supported organisations across the UK, from recruitment agencies struggling with inbox placement to SaaS firms scaling fast, and SMEs needing a trusted partner for their IT. He believes tech is never the end goal: growth is. His role is to make sure technology never gets in the way of it.