Microsoft 365 Licensing Doesn't Need to Be Complicated
Microsoft 365 comes in several different business plans, and at first glance the names can make choosing between them harder than it needs to be.
For most small businesses, the decision usually comes down to three main options:
- ✓Microsoft 365 Business Basic
- ✓Microsoft 365 Business Standard
- ✓Microsoft 365 Business Premium
All three are designed for businesses, but they suit different ways of working.
The best licence is not necessarily the most expensive one. It is the one that gives each user the services and level of security they actually need.
Microsoft 365 Business Basic
Business Basic is the entry-level Microsoft 365 business plan and can be an excellent choice for businesses that mainly work through a web browser or mobile device.
It provides the core cloud services most small businesses need, including professional business email, OneDrive and SharePoint.
- ✓Business email using your own domain
- ✓Exchange Online email and calendars
- ✓1 TB of OneDrive cloud storage per user
- ✓SharePoint for shared business files and information
- ✓Web and mobile versions of Microsoft 365 apps
- ✓Microsoft Forms, Bookings and other cloud services
If somebody already has suitable desktop software or is happy working primarily through the browser, Business Basic can provide a lot of functionality without paying for desktop Office applications they do not need.
Microsoft 365 Business Standard
Business Standard includes the cloud services found in Business Basic but adds the full desktop Microsoft 365 applications.
That makes it a natural choice for users who want the familiar installed versions of Outlook, Word, Excel and PowerPoint on their computers.
- ✓Everything in Business Basic
- ✓Desktop Outlook
- ✓Desktop Word
- ✓Desktop Excel
- ✓Desktop PowerPoint
- ✓Microsoft 365 desktop apps kept up to date as part of the subscription
For many small office-based businesses, Business Standard provides a good balance between professional email, cloud collaboration and the traditional desktop Office experience.
Basic vs Standard vs Premium
The simplest way to think about the three plans is:
| Capability | Business Basic | Business Standard | Business Premium |
|---|---|---|---|
| Professional business email | Yes | Yes | Yes |
| OneDrive & SharePoint | Yes | Yes | Yes |
| Web & mobile Office apps | Yes | Yes | Yes |
| Desktop Office apps | No | Yes | Yes |
| Intune device management | No | No | Yes |
| Conditional Access | No | No | Yes |
| Defender for Business | No | No | Yes |
In short: Basic = cloud services. Standard = cloud services + desktop Office. Premium = Standard + advanced business security and device management.
When Does Business Basic Make Sense?
Business Basic can be a very sensible choice when a user does not need the installed desktop Office applications.
For example, it may suit:
- ✓Staff who mainly use email through a browser or phone
- ✓Employees who primarily access shared files and web applications
- ✓Occasional or lightweight Microsoft 365 users
- ✓Businesses that want professional email and cloud storage without desktop Office
There is little benefit in paying for Business Standard simply because it sounds more complete if a particular user will never use the desktop applications.
When Does Business Standard Make Sense?
Business Standard is often a good fit for employees who spend much of their day working on a computer and rely on the traditional Office applications.
It may be appropriate when users regularly work with:
- ✓Desktop Outlook
- ✓Word documents
- ✓Excel spreadsheets
- ✓PowerPoint presentations
You still receive the cloud collaboration benefits of Microsoft 365, but users also have the full desktop applications they are accustomed to.
You Don't Have to Give Everyone the Same Licence
This is something businesses sometimes overlook.
Microsoft 365 licences are assigned to individual users, so your entire company does not necessarily need to be on the same plan.
For example, a business might use:
Business Standard for office staff who need desktop Office applications
Business Premium for users or devices requiring stronger security and management
The right combination depends on how people actually work.
Choosing licences user by user can avoid unnecessary cost while still giving the people who need additional capabilities the right tools.
A Quick Note About Microsoft Teams
Microsoft licensing can vary by market and purchasing route, and Microsoft has changed the way Teams is bundled with some Microsoft 365 subscriptions.
That means it is worth checking the exact licence being purchased rather than assuming every version of a plan contains precisely the same bundle.
If Teams is important to your business, confirm that the specific licence or bundle you are buying includes the Teams functionality you require.
Don't Choose on Price Alone
It is tempting to simply choose the cheapest licence for everyone.
But licensing decisions should start with how the business works.
A cheaper licence that prevents an employee from using the desktop applications they need is not good value. Equally, paying for Premium for somebody who only needs a basic mailbox and cloud access may be unnecessary.
The aim is to match the licence to the user rather than forcing every user into the same package.
The CloudMonsta View
For many small businesses, the decision can be kept fairly simple.
Business Basic is a strong starting point when users mainly need professional email and Microsoft cloud services.
Business Standard makes sense when users also need the full desktop versions of Outlook, Word, Excel and PowerPoint.
Business Premium is worth considering when the business wants to properly manage devices and strengthen security as it grows.
The important thing is not to buy licences simply because they are the cheapest or because they have the most features.
Choose the plan that matches how each person works and what the business needs to protect.