Microsoft licence types come in two formats; Microsoft 365 and Office 365. Both of these offer a suite of popular Microsoft productivity apps and tools but differ in pricing, features, and licensing models.

We understand that it may be difficult to understand which one is right for you as there is conflicting and outdated information out there. By choosing the right licence, you’ll ensure your company isn’t over-licensing or under-licensing and more importantly, you’re paying the right amount. We’ve provided a brief overview below to help you better understand which licence type is best suited to your business.

Office 365 (O365) licences

The Office 365 licence plan is the more popular one compared to Microsoft 365. This is because it contains the most commonly used Microsoft Office applications; Word, PowerPoint, Excel, and Outlook. Many of the plans include hosted Microsoft Exchange mailboxes, additional security features, and compliance for standalone office applications like Project. Office 365 is split between Office 365 Business and Office 365 Enterprise.

Office 365 Business

The O365 Business plan is consists of Essential, Business, and Business Premium. These plans are ideal for clients that do not have many requirements, and as such they are priced accordingly. Be aware that O365 Business plans do not come with Shared Computer Activation for Office products, which means you cannot use these plans with Remote Desktop Environment in Azure.

Office 365 Enterprise

O365 Enterprise plans are made up of E1, E3, and E5. These plans are able to support over 300 users and are geared for enterprise productivity. The E3 plan is the most commonly used level, as it consists of the most widely used applications and features.

Microsoft 365 (M365) licences

Microsoft 365 combines the traditional features of Office 365 with enterprise mobility + security (EMS) and Windows 10. With increased features, it comes at a higher cost than Office 365 plans but provides a full cloud productivity solution. These plans also include a Windows 10 Enterprise licence, which can be used to license Virtual Desktops in Azure. MS365 is divided into Business, Enterprise, and Education.

Microsoft 365 Business

MS365 Business is best suited for SMB deployments. The plan includes Office 365 Business, basic EMS functions, as well as Intune for managing devices. This represents a slight improvement over the Office 365 Business Premium plans.

Microsoft 365 Enterprise

MS365 Enterprise plans are similar to the traditional Office 365 E3 and E5 plans whilst adding Windows 10 Enterprise licences and EMS features. It includes critical security features such as Azure Information Protection, Office 365 Advanced Threat Protection, and Microsoft Intune. There are 2 sub-plans tailored for frontline workers within MS365 Enterprise; F1 and F3, with F1 giving basic apps and functionality, and F3 granting more collaboration tools and security features.