Trying to make sense of Microsoft 365 Licensing Options

In this blog post I’ve tried to explain why Microsoft seems to have moved from talking about Office 365 to talking about Microsoft 365 and have tried to explain what the top level product options are under the enterprise and business licensing streams.

 

Microsoft have moved in their terminology from talking about “Office 365” to “Microsoft 365” – what’s that about?

I think this is mainly about changes in marketing strategy from Microsoft, upsell and a general direction of travel.

Microsoft have a number of successful trademarks – their name for one, Office 365 for a second, Windows, and Dynamics plus many others. But how do they effectively leverage the trademarks?

For some time Microsoft has been successfully selling Office 365 but the exact product SKUs plus the associated bundles and add-ons has been a confusing miasma that takes a formal licensing degree to navigate through.

Part of the shift of focus from Office 365 to Microsoft 365 has been try to make this miasma easier to navigate – Microsoft 365 bundles in Office 365, some OS elements, plus some security elements to create a total bundle that Microsoft believe matches most customers requirements.

The shift also better leverages the Microsoft brand – unfortunately it has had the consequence of leaving a lot of customers confused as to what they need to buy and under what prior licensing circumstances.

 

Hang on a minute – what’s all this with business and enterprise?

Microsoft have split their business customers into two essential groups –

  • Businesses – organisations requiring 300 of less licenses

  • Enterprises – organisations with any number of users (but typically more than 300 to get best pricing)

I think this is mainly in order to enable them to prioritize different types of incentives to different groups – good sensibly priced attractive bundles for SMBs, and a more customized set of offerings for larger Enterprises.

 

Enterprise Product Set

Who should buy the Enterprise Products?

The Enterprise branded products should be purchased by organisations who require more than 300 licenses / seats and therefore cannot buy the “Business” products – or by organisations for whom the “Business” offerings don’t match what they are looking for.

 

The Core Products – Microsoft 365 E3 and E5

The primary products Microsoft is focusing on are the Microsoft 365 E3 and E5 products – there are similar to the older Office 365 E3 and E5 plans but with some added functionality.

  • Microsoft 365 E3: All Office apps on web and desktop install, including email hosting, sharepoint, onedrive and teams plus limited analytics relating to how an individual works, some enhanced threat analytics and antivirus capabilities, some enhanced data loss and information protection controls. Also includes Windows Enterprise, Intune, Windows Autopilot, Azure AD Premium Plan 1 and Microsoft Endpoint Configuration Manager.

  • Microsoft 365 E5: Everything that is contained in the Microsoft 365 E3 plan plus Teams audio calls & telephone system, Power BI Pro, Azure AD Premium Plan 2, MS defender advanced threat protection, Microsoft 365 Advanced Threat Protection, and Azure Advanced Threat Protection, Azure Information Protection Plan 2, Cloud App Security, and enhanced eDiscovery, Customer Lockbox, etc.

When choosing between these two a customer will need to be asking whether they require just the OS and Office 365 and the ability to manage these with a basic security and data governance wrap or whether they want the full security and data management capablities offered by the E5 bundle.

 

Microsoft 365 E5 – A Total compliance solution

It should be fairly obvious to the casual observer that the Microsoft 365 E5 bundles is really aimed at organisations wanting a all encompassing bundle that will meet their security, governance and compliance requirements in addition to providing the OS, Office 365 and the ability to effectively manage these. A few examples of this:

  1. Customer Lockbox: Assists in meeting obligations under the GDPR in regards to data processing

  2. Azure Information Protection Plan 2: Assists in meeting obligations under the GDPR in regards to document classification, labelling and compliance.

  3. Various Threat Protection Capabilities: Assists in meeting obligations under structures such as Cyber Essentials Plus and ISO27001 ISMS requirements.

This is a more expensive bundle than most the others and if an organisation decides to buy it they will need to beware of the number of different projects they would have to initiate in order to properly take advantage of all the available features and services.

 

Can I still buy the “Office 365” suite without the extra bits in the “Microsoft 365”?

The basic answer is yes, but the naming might be different.

  • For organisations with any number of users (as opposed to up to 300 users) to get the Office 365 suite online and local install including the Outlook client, Onedrive for Business, Sway and Forms but excluding Sharepoint, Exchange, and Teams you need to buy “Microsoft 365 Apps for Enterprise

  • For organisations with any number of users (as opposed to up to 300 users) to get the Office 365 suite online only (no local install) including Sharepoint and Exchange but excluding the right to connect to an Outlook client you need to buy “Microsoft 365 F3”.

  • For organisations with any number of users (as opposed to up to 300 users) to get the Office 365 suite online only (no local install) including Sharepoint and Exchange but including the right to connect to a separately licensed Outlook client you need to buy “Office 365 E1”.

  • For organisations with any number of users (as opposed to up to 300 users) to get the full Office 365 suite both online and local install including Sharepoint, Exchange, Teams, Onedrive including the Outlook client you need to buy “Office 365 E3”.

  • For organisations with any number of users (as opposed to up to 300 users) to get the full Office 365 suite both online and local install including Sharepoint, Exchange, Teams, Onedrive including the Outlook client plus improved threat protection, information protection, Power BI Pro, and advanced compliance features you need to buy “Office 365 E5”.

It should be noted that Microsoft 365 F3 is targeted at users who do not have a dedicated device – but that the license includes Windows 10 Enterprise, on a per user basis.

 

Microsoft 365 F3 and Office 365 E1 seem quite similar – how do I choose?

They are quite similar aren’t they? They are both designed for front line workers who only have access to the Office 365 suite of products online – so the users are occasional users who typically read content rather than create it.

FeatureWhat Post April 2020 Microsoft 365 F3 IncludesWhat Office 365 E1 Includes
Email Storage2GB50GB
Email AccessOnline only – on browser or phone appOnline – on browser or phone app
On Outlook by a separately licensed version of Outlook
Skype for Business / TeamsInstant Messaging
Availability Status
Attend Meetings
Access to all features:
Instant Messaging
Availability Status
Attend Meetings
Desktop Sharing
Video Conferencing
Web Conferencing
Scheduling of Meetings
File Sharing & Storage2GB cloud storage for One drive for Business1TB cloud storage for Onedrive for Business
Flow (Power Automate)Cannot create flows
Limited to 2000 steps per month
Can create flows
No limits
Use of user dedicated deviceF-SKUs cannot be used for users with a dedicated device (defined as a work device with a screen larger than 10.1″ used more than 60% of total work time)E-SKUs can be used for users with dedicated devices

 

Isn’t there a Microsoft 365 F1 product too?

Yes. The current iteration of the Microsoft 365 F1 product includes EMS E3, Microsoft Teams, Sharepoint and Yammer Enterprise, Stream and Read-Only access to Office Web / Mobile apps and no email. This makes it pretty limited in its usage.

It should also be noted that Microsoft have really muddied the waters here by renaming the pre-April 2020 product “Microsoft 365 F1” as “Microsoft 365 F3” and then introducing the new “Microsoft 365 F1” that is different to the former (now renamed) one… so wherever you read about these products you need to be clear which version of F1 the document is talking about.

 

So do Office 365 E1, E3, E5 and F1 no longer exist?

From Microsoft’s website looking on 05th June 2020 it appears you can still buy these Office products with the exception of “Office 365 F1” which has been renamed “Office 365 F3”.

 

So when should I buy An Microsoft 365 product rather than a Office 365 product?

Just to be clear – the enterprise products that exist overall then are:

  • Microsoft 365 F1, F3, E3 and E5

  • Office 365 F3, E1, E3 and E5

  • Microsoft 365 Apps for Enterprise

Microsoft 365 E3 and Microsoft 365 E5 have corresponding Office 365 E3 and Office 365 E5 products. Thus Microsoft 365 E3 contains all the features of Office 365 E3. So, what do you get additionally to Office 365 in Microsoft 365?

The added features / functionality are Intune, Windows 10 Enterprise, Windows Autopilot, SCSM and SCEP, Windows Hello, improved analytics capabilities, improved identity protection, improved threat protection, and improved information protection capabilities.

So if you want an all encompassing solution covering OS, security, identity, MDM and extended Office productivity rather than just the extended Office productivity suite then buy Microsoft 365 E3 or E5.

 

What do you recommend?

Our recommendations are as recommended below:

ScenarioSolution
Our email is hosted elsewhere and we don’t want to migrate it but we want to make use of Outlook and the other Office desktop products
We have more than 300 users
Microsoft 365 Apps for Enterprise
We want our email on Office 365, but only want to be able to use the Office suite online.
Occasional user – no dedicated device.
We have more than 300 users
Microsoft 365 F3
User only uses email occasionally and needs only small mailbox (2GB).
Only need online access to Office 365 and email.
Occasional user – no dedicated device.
We have more than 300 users
Microsoft 365 F3
User only uses email occasionally and needs larger mailbox (50GB).
Only need online access to Office 365 and email.
We have more than 300 users
Office 365 E1
We want our email on Office 365, but don’t want the locally installed version of the Office suite – we already have licensing for this separately.
Regular user – dedicated device.
We have more than 300 users
Office 365 E1
We want our email on Office 365, but don’t want the locally installed version of the Office suite – we only really need to use the online versions.
Regular user – dedicated device.
We have more than 300 users
Office 365 E1
We want our email on Office 365, we want to be able to use both online and locally installed versions of the Office suite.
Our OS and MDM is separately licensed
We have more than 300 users
Office 365 E3
We want our email on Office 365, we want to be able to use both online and locally installed versions of the Office suite.
We want a solution that provides us with our operating system and the tools to manage it, plus provides us mobile device management.
We have more than 300 users
Microsoft 365 E3
We want our email on Office 365, we want to be able to use both online and locally installed versions of the Office suite.
Our OS and MDM is separately licensed.
We want a full security and compliance bundle that will keep us and our data safe.
We have more than 300 users
Office 365 E5
We want our email on Office 365, we want to be able to use both online and locally installed versions of the Office suite.
We want a solution that provides us with our operating system and the tools to manage it, plus provides us mobile device management. But beyond this we want a full security and compliance bundle that will keep us and our data safe.
We have more than 300 users
Microsoft 365 E5

 

Business Product Set

Who should buy the Microsoft 365 Business products?

Organisations that require no more than 300 seats (licenses) should use the Microsoft 365 Business products.

 

Can I still buy the “Office 365” suite without the extra bits in the “Microsoft 365”?

The basic answer is yes, but the naming might be different from previously.

  • For small businesses needing up to 300 seats to get the Office 365 suite online only including email hosting, sharepoint, onedrive and teams you need to buy “Microsoft 365 Business Basic” which was formally called “Office 365 Business”.

  • For small businesses needing up to 300 seats to get the Office 365 suite online and desktop install including Outlook and Onedrive but excluding email hosting, sharepoint and teams you need to buy “Microsoft 365 Apps for Business” which was formally called “Office 365 Business”.

 

So what are the other Microsoft 365 Business products?

There are two other options open to you as detailed below:

  • Microsoft 365 Business Standard: All Office apps on web and desktop install, including email hosting, sharepoint, onedrive and teams.

  • Microsoft 365 Business Premium: All Office apps on web and desktop install, email hosting, sharepoint, onedrive and teams. Plus Intune, PC security policy controls and Azure Information Protection.

 

So what would you recommend?

Our recommendations are as per the table below:

ScenarioSolution
Our email is hosted elsewhere and we don’t want to migrate it but we want to make use of Outlook and the other Office desktop products

We have no more than 300 users
Microsoft 365 Apps for Business
We want our email on Office 365, but only want to be able to use the Office suite online.

We have no more than 300 users
Microsoft 365 Business Basic
We want our email on Office 365, we want to be able to use both online and locally installed versions of the Office suite.

We have less than 300 users
Microsoft 365 Business Standard
We want our email on Office 365, we want to be able to use both online and locally installed versions of the Office suite.

We also want the license to include Mobile Device Management and Windows 10.

We have no more than 300 users
Microsoft 365 Business Premium

 

What about non-profits?

We’ve not covered the non-profit plans from Microsoft in this blog post but will do so in a later blog post.

 

Disclaimer

The changes to the licensing plans around Office 365 and Microsoft 365 are complex and at times its unclear whether a document from Microsoft is referring to a new or old SKU for the product. As such there may be errors in this post – these are wholly my fault and when I know about them I’ll fix them.

 

References

Microsoft 365 Business Basic, Apps for Business, Business Standard, Office 365 Enterprise E1, E3, E5 and F3 plan definitions page (leads to other pages):

https://docs.microsoft.com/en-us/office365/servicedescriptions/office-365-platform-service-description/office-365-plan-options

Detail about the renaming of Microsoft 365 Enterprise F1 to F3 and the introduction of the “new” F1:

https://www.microsoft.com/en-us/licensing/news/m365-firstline-workers

Microsoft 365 Enterprise E3, E5 and F3 comparison page:

https://www.microsoft.com/en-gb/microsoft-365/compare-microsoft-365-enterprise-plans

Microsoft 365 Apps for Business, Office E1, E3 and E5 comparison page:

https://www.microsoft.com/en-gb/microsoft-365/business/compare-more-office-365-for-business-plans

Microsoft 365 Business Basic, Standard and Premium comparison page:

https://www.microsoft.com/en-gb/microsoft-365/business

Comparison is about halfway down the page but doesn’t include “Apps for Business” which is shown separately at the bottom of the page.

Microsoft 365 Apps for Business:

https://www.microsoft.com/en-gb/microsoft-365/business/microsoft-365-apps-for-business?activetab=pivot%3aoverviewtab

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