Microsoft 365 licences are best chosen based on how your people work, not just headcount. Below is a practical way to think about the main licence tiers.

Basic – budget-focused, just getting started

Best suited for very small or cost-sensitive organisations.

• Uses Microsoft apps via a web browser only
• No installed desktop versions of Office
• Email, files, and collaboration included
• Suitable for non-power users and simple needs

This works well when budgets are tight and staff are happy working entirely online.

Standard – the traditional starting point

Where many businesses begin.

• Includes downloaded desktop versions of Office apps
• Email, Teams, SharePoint, and OneDrive included
• Familiar experience for most staff
• Limited built-in security and device control

This suits organisations that want the full Office experience but don’t yet need advanced security features.

Premium – the recommended starting point for most SMEs

Now the most common recommendation for growing businesses.

• Everything in Standard
• Strong built-in cyber security features
• Device and mobile management included
• Identity protection and access controls

For most SMEs, Premium offers the best balance of usability, protection, and long-term value — without needing separate security tools.

E3 and E5 – advanced compliance and large organisations

Designed for complexity and regulation.

• Typically used by organisations with 300+ users
• Advanced data loss prevention and compliance tools
• Enhanced security, auditing, and reporting
• Higher cost and greater administrative overhead

These licences are usually required where regulatory, legal, or sector-specific compliance is a key driver.

The key takeaway

There’s no single licence that fits everyone. The best setups usually involve:

• Matching licences to roles, not giving everyone the same thing
• Starting simple, but choosing licences that won’t limit you as you grow
• Reviewing licences regularly as the business changes

Getting this right controls costs, improves security, and avoids disruptive changes later.

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