Microsoft Business Licenses and Why You Might Purchase Them

Editor’s note: Microsoft is raising prices for all Business licenses April 1. Please refer to this blog post for the new prices.

Microsoft offers varying levels of Microsoft 365 Business licenses to accommodate small and large businesses with different needs.

It can be overwhelming trying to decipher what comes with each license, but we’re here to help.

We’ll discuss the six main Business licenses — Microsoft 365 Business Basic, Business Standard, Business Premium, Apps for business, Exchange Online Plan 1 and Exchange Online Plan 2 — what each version includes, what it costs and why you might purchase each license.

Microsoft 365 Business Basic

What is it?

Business Basic is Microsoft’s smallest and cheapest Business license that includes the bare bones of Microsoft 365 apps to help your organization create documents, spreadsheets, slideshows and collaborate.

What does it include?

Business Basic includes email and online versions of Word, Excel and PowerPoint, as well as Microsoft Teams for messaging and collaboration. Each user receives 1 terabyte of personal storage with OneDrive.

For a full list of features, see the chart below.

How much does it cost?

Business Basic costs $6 per user, per month with a committed plan or $7.20 per user, per month for an uncommitted plan.

Who would use it?

Small businesses or startups that just need the basics of Office products without desktop apps.

Microsoft 365 Business Standard

What is it?

Business Standard offers everything in the Business Basic license, plus desktop versions of Office apps, giving users both online and offline work options.

What does it include?

Business Standard includes everything in the Business Basic license, plus desktop versions of Word, Excel, PowerPoint and Outlook. It also includes Microsoft Loop, a collaboration tool where employees can create charts, task lists, tables, paragraphs and more.

For a full list of features, see the chart below.

How much does it cost?

Business Basic costs $12.50 per user, per month with a committed plan or $15 per user, per month for an uncommitted plan.

Who would use it?

Small businesses that want the desktop versions of Office apps to be able to work offline or who want Loop for project collaboration.

Microsoft 365 Business Premium

What is it?

Business Premium is Microsoft’s biggest and most expensive offering that emphasizes organizational security and offers online and desktop versions of Office apps.

What does it include?

Everything in the Business Standard license, plus advanced security measures that include conditional access, phishing protection, data encryption and security policies.

For a full list of features, see the chart below. Note: If the image is hard to see, click here.

How much does it cost?

Business Basic costs $22 per user, per month with a committed plan or $26.40 per user, per month for an uncommitted plan.

Who would use it?

While we recommend any small business purchase Business Premium because of its advanced security features, it’s geared toward organizations that have sensitive data to protect and want extra protection against email-based attacks.

Microsoft 365 Apps for Business

What is it?

Apps for business is a stripped-down version of Business Standard, including only the necessary Office apps without extra collaboration tools.

What does it include?

The desktop versions of Word, Excel, PowerPoint and Outlook, but no Teams or Loop. Users also get 1 TB of OneDrive storage. While this license does come with Outlook, it does not come with a custom business mailbox.

How much does it cost?

Apps for business costs $8.25 per user, per month with a committed plan or $9.90 per user, per month for an uncommitted plan.

Who would use it?

Those who want Business Standard but don’t need a messaging service like Teams, a collaboration tool like Loop or already have a business email through another provider.

Exchange Online Plan 1

What is it?

Exchange Online Plan 1 is simply email — the online version of Outlook.

What does it include?

Users get a 50 GB mailbox with 50 GB of archive space. No other Office apps or advanced security features are included.

How much does it cost?

Exchange Online Plan 1 costs $4 per user, per month.

Who would use it?

Employees who only use email and don’t need Word, Excel, PowerPoint or Teams.

Exchange Online Plan 2

What is it?

Exchange Online Plan 2 also is email only, but it comes with a bigger mailbox and some additional features.

What does it include?

Users get a 100 GB mailbox with up to 1.5 TB of archive space. It also includes built-in data loss prevention and cloud voicemail services with call answering, dial-in UI and an automated attendant.

How much does it cost?

Exchange Online Plan 2 costs $8 per user, per month.

Who would use it?

Employees who receive several emails per day, especially if they contain large attachments like photos, audio or video files. Note: Exchange Online Plan 2 can be combined with other Microsoft 365 licenses if employees need Office apps and more mailbox storage.

As noted earlier, the Apps for business, Business Basic, Standard and Premium licenses can be purchased with a committed or uncommitted plan. You can read more information about committed and uncommitted plans here.

In a later post, we’ll also break down some of the more popular add-ons for Microsoft 365.

Find the Right Microsoft 365 License for Your Organization

Microsoft 365 is a great tool to increase productivity, security and profitability, but you want to make sure you get the right licenses for the right employees.

Contact us today to schedule a consultation, and we’ll discuss the pros and cons of each license to help you better understand your choices.

Stay updated! Get tips and insights delivered to your inbox weekly by subscribing to our newsletter.