Home › Blog › Microsoft 365 licence types
Licensing · 15 September 2026 · 8 min read
Six plan families, two things a licence can be assigned to, three payment terms and three purchase channels. Forty names on Microsoft’s price list are combinations of those four axes. Here they are, with the rule that picks each one.
Business — Basic, Standard, Premium. Up to 300 users per tenant. Basic is mail, Teams and web apps; Standard adds desktop Office; Premium adds security (Intune, Entra ID P1, Defender for Business, Defender for Office 365 P1) and archiving. The default for any company under 300 people.
Enterprise — Office 365 E1, E3, E5 and Microsoft 365 E3, E5. No user cap. Office 365 E-plans are the apps and services; Microsoft 365 E-plans add Windows Enterprise, Intune and the security stack. E5 is the full set: Defender P2, Purview, Entra ID P2, Teams Phone. Most companies over 300 are on Microsoft 365 E3 with add-ons.
Frontline — F1 and F3. For people without a desk: a small mailbox, Teams on a phone, web apps. A fraction of the price; Microsoft checks the “no dedicated device” definition on audit.
Education — A1, A3, A5, licensed per faculty with student licences free or bundled. Accredited institutions only, eligibility checked before invoicing.
Government — G-plans, US public sector only; in Europe, government bodies buy commercial plans, sometimes with Open Value government pricing.
Standalone — Exchange Online Plan 1 and 2, SharePoint, Teams Essentials, Visio, Project, Power BI, and every add-on (Copilot, Defender, Purview, Entra, Intune). For when one workload is needed without a suite, or on top of it.
Nearly all Microsoft 365 licences are per user: one named person, up to five PCs and five phones. A few are per device: Teams Rooms, Intune device licences, Windows on shared kiosks. A shared mailbox needs no licence at all until it exceeds 50 GB or needs an archive. If you are counting machines rather than people, you are probably in the wrong family.
Monthly commitment: cancel or reduce any month, about 20% more per seat. Annual: cheaper, locked for the year, seats can be added but not removed until renewal. Three-year: available on a few SKUs, cheaper still. Under New Commerce the only free cancellation window is 72 hours from purchase. The working rule: annual for the headcount you are sure of, monthly for everything else. How cancelling and reducing works →
CSP — through a partner like us, invoiced locally in your currency, with the partner as support. Every Microsoft 365 plan is sold here. Open Value — a three-year volume agreement with Software Assurance; for perpetual server and desktop licences and for Visual Studio subscriptions, not really for Microsoft 365. Enterprise Agreement — 500 users and up, sold only by Licensing Solution Partners, of which we are not one. Direct from Microsoft — the Microsoft 365 admin center, credit card, no partner: the same prices, no support. Which channel sells what →
“Microsoft 365 Business Premium (no Teams), annual, CSP” is: Business family, Premium tier, EEA variant without Teams, per user, annual term, through a partner. “Exchange Online Plan 2, monthly” is: standalone, per user, monthly, through a partner. Once you read names this way, the price list stops being forty products and becomes six families with options.
How many people, and are they at desks? Under 300 at desks is Business; over 300 is Enterprise; not at desks is Frontline. What must not be able to go wrong — phishing, a lost laptop, a leaver deleting mail? That decides Basic, Standard or Premium, or which E-plan. Will the headcount change within a year? That decides monthly or annual. The plan finder asks exactly these and prices the answer.
Prices for every licence type, in six currencies with part numbers: the price list. Plan-by-plan comparison of what is inside: compare plans.
One email a month, at most
Postmortems, timelines, licensing changes that cost people money. No newsletter cadence, no digest of other people’s news. If a month has nothing worth your time, you hear nothing.
Please enter a work email address.
Done. Unsubscribe by replying to any email; we will not argue.
Scoping costs nothing
We will answer them about our own work, in writing, with the numbers. If the answers do not convince you, they should at least make the next partner’s answers easier to judge.