There are a lot of details that go into choosing a license for Office 365. In this section, we’ll take a look at those license and how you would start to go about choosing.

Each of the categories below has several options to choose from, in addition, there are several add-ons that you can purchase for each plan. We won’t break down all the details of each license type and all the services if this course but will point you in the right direction if you wish to do a full feature by feature comparison.

As I continue to build out content, this lesson may turn into a second email course that I’ll offer or even some premium content for those of you that wish to dive into it further.


Business Plans are the first category. These plans are targeted at the small business. There are three business plans offered.

  • Business: This is just desktop Office (Office 2016) and OneDrive for Business. This plan is great if you’re a small business just looking for some cloud storage base similar to Dropbox or Google Drive and also need a license of Office 2016 for your desktop and mobile device.
  • Business Essentials: This is the opposite of Business. It includes all the online services: Exchange, Skype for Business, SharePoint, OneDrive for Business, and other service targeted at the small business (although most of those features have also come to Enterprise plans as well now too). If you already have Office 2016 or don’t need the desktop version of Office, this plan is for you.
  • Business Premium: This is simply Business and Business Essentials bundled into a single plan. It combines the Office 2016 desktop license with all the online service and puts them in a single plan. If you’re looking for the full suite of Desktop, Mobile, and online services, this is what you want.

Since these plans are targeted at small business, there are a few limitations to be aware of:

  1. You can’t have more than 300 of any one of the licenses above. You can have 300 of Business and 300 of Business Premium, but you can’t have 600 Business Premium.
  2. While the price is cheaper than what appears to be the equivalent enterprise plans, the business plans are missing features, as well as the ability to expand, that you get with the enterprise plans.

While these plans do have their place for some business, I tend to try to steer people away from them and straight into the enterprise plans we’ll cover next. There is nothing preventing a business of one from purchasing an enterprise plan. They just give you more flexibility and options in the long run. If you are on a Business plan and wish to switch to an Enterprise plan, don’t worry, you are able to migrate from one to the other now as well.


These plans are my favorite. There are are actually four enterprise plans available:

  1. ProPlus: This is the equivalent of the Business plan above. Just the desktop license of Office 2016 for desktop and mobile as well as some OneDrive for Business Space.
  2. E1: This is similar to the Business Essentials plan. This plan is a limit set of the online services. Exchange, SharePoint, Skype for Business, etc. While it does look like ProPlus + E1 = E3, be careful, there are some differences in what is offered in the online services between E1 and E3.
  3. E3: This is the most common plan in enterprises. This includes both the Desktop and Mobile license of Office as well as the online services. It also includes additional features and greater limits to some of the online services.
  4. E5: The most expensive, but also the most comprehensive plan. This includes everything in E3 plus some additional add ones around additional security as well as voice calling with Skype for Business. If you are concerned about adding additional security to your Office 365 environment or want to replace your phone system with Skype for Business, you’ll want to take a close look at the E5 plan.

The enterprise plans have no minimum or maximum number of licenses you can get. So, if you are a company of one or two or a company of several thousand or even hundred’s of thousands you can leverage the enterprise plan. These plans contain more advanced features than the Business plans and have the ability to grow with your company.


To see a full feature breakdown, you can find a comparison of each plans services under the service descriptions here. . This compares all three business plans, E1, E3, E5, and F1 all side-by-side.


Education is its own special type of Office 365 environment. It’s also hard to get your hands on one. I have some limited experience working with the education tenant, as a client I’ve worked with a little bit is in the education space. The only way to really get experience with an education tenant though is to be in that space. There are some strict requirements for getting an education tenant. It also makes it easy to know if you should do get an education tenant or not…if you’re a verifiable education organization you can submit an application for one (you have to have a valid .edu email address to do it), if not, you’re out of luck.

An education tenant has its own type of license for both students and staff, some extra features (such as OneNote class notebooks), and some extra abilities around auto provisioning licenses (and users if needed). It also has some licenses to help provide alumni with an email address they can continue using after graduation.


Like education, this is another tenant you can’t just go out and get to see how it works and what’s included. You need to be a verified U.S. Government organization (think a valid .gov email address). This has a sort of subset of the enterprise plans. It has two “E” plans as well as two Exchange online plans you can use. While they tend to be label just like the Enterprise plans (E3 and E5) they have a subset of the feature of enterprise plans. This is due to the fact that in order to be valid government plans, these plans must adhere to very specific regulations and also have several certifications. Not all features and services in Office 365 meet the stringent regulations nor have the certifications. Therefore, they can’t be offered as part of the tenant. If you are working with or looking at getting a government tenant, be aware that newly announced features can take several months, or even a year or more, to make it to your government tenant.


The non-profit plans aren’t any different than the Business and Enterprise plans other than the price. It’s actually the exact same plans, just priced for non-profits. You can choose from any of these plans:

  • Business Essentials or Business Premium
  • E1, E3, and E5
  • Office 365 ProPlus

There is also non-profit pricing available for several add-ons such as PowerBI or Advanced Threat Protection.

As with the Government and Education plans, you have to be a verified non-profit in order to qualify for non-profit pricing.


That wraps up lesson 3 on choosing and Office 365 license. In the next lesson, we’ll take a look at creating an Office 365 tenant and logging into your tenant. This will be your first step in actually getting your hands dirty with Office 365.