Few people like to have long discussions about Microsoft licensing, but I do actually enjoy them.
Why?
Because your capability to do good things for a business all stems from how their users are currently licensed. You can also, with a shocking degree of confidence, judge an entire company’s security operation from a single screenshot of the license types they have, and how they are assigned.
Foot in the door
When people ask “What license should I buy?” my default answer for a business of 300 users or fewer is M365 Business Premium. There is no other SaaS subscription in existence that provides as much business value as that one does.
- Productivity & Apps
- Identity Security
- Device Security
- Basic Compliance Features via Purview
I could go on…
But what if you’re more than 300 seats?
Tough Conversations Begin
Let’s assume for global approximation that this is roughly what licenses cost, and that we’re paying this price, per month, for annual commit.
M365 Business Premium = £20
M365 E3 = £35
M365 E5 = £50
My small business has 300 users and pays £72,000 for the max limit for Business Premium, and we’ve had all the top experts in to configure it.
(£20 x 300 Users x 12 months) = £72,000
Those same experts also recommend that everyone has the same security and productivity experiences as we scale.
We hire 1 additional staff member, so we’re at 301
M365 E3 does not feel like an upgrade
To maintain consistency, I upgrade everyone to M365 E3
(£35 x 301 Users x 12 months) = £126,420
That’s a £54,420 increase! And we’re not done yet.
M365 E3 has FEWER security benefits than M365 Business Premium
Firstly, to maintain the Defender for Office 365 P1 benefit, I need to buy that for every user too
Assume that’s roughly £1.75 per user
AND I need to buy Defender for Endpoint P2 for each user to keep the EDR benefit I got with Defender for Business, which is about £5.
| License | QTY | Price | Extended Price |
| M365 E3 | 301 | £35 | £126,420 |
| Defender for Office P1 | 301 | £1.75 | £6,321 |
| Defender for Endpoint P2 | 301 | £5 | £18,061 |
| TOTAL: £150,082 |
Factoring all things I need, I am now paying £78,802 MORE than my Business Premium setup.
That is an increase of 109.45% to maintain feature-set that we got in Business Premium.
What this does
- Drives people away from using Microsoft solutions as they scale
- Encourages people to commit license misuse by only purchasing single licenses that have tenant-wide unlocks
- Frustrates commercial teams everywhere who have to advise Microsoft customers on the best route forward
“But E3 has things BP doesn’t”
Yes:
- Windows Enterprise License
- M365 Apps for Enterprise
- Teams Live Events
- Exchange Online P2 for 100GB Mailbox
- OneDrive P2
They are useful things, but I’d question whether it’s really worth an extra ~£12 per-user/month, and is it really the driver for upgrading?
What about M365 E5?
If you’ve done your job properly, you should be able to convince people that M365 E5 is ridiculously cheap for what it offers, IF people use the full feature set.
We did an exercise in the WinAdmins discord a few years back where we calculated that if you went third-party for all on offer, you’d be spending over $200 per user, per month. I’m not going to go more into that detail here because I think that license is good.
How could Microsoft fix this?
At the very least, the security benefit between M365 BP and M365 E3 should match.
- Throw in DFO P1 & EDR for DFE
- Increase the seat cap of Business Premium (temporary fix)
- Add more value into M365 E3 so it actually feels like an upgrade
There is a clear gap between SMB and Enterprise in Microsoft licensing, and I feel that it would be very difficult to fix this situation without causing too much turmoil for the strategic business teams. Long-term strategy is likely built on the success of Enterprise SKUs, so there needs to be a solution which means number still go up for every team involved at Microsoft.