Microsoft 365 plans compared for UK SMEs

Microsoft 365 has dozens of plan names and the differences are not obvious. This guide covers the plans most UK small and mid-sized businesses actually choose between, and how to decide. Plan contents, names and prices change, so treat this as a map and check Microsoft’s current plan comparison before you buy.

The three families

• Business plans (Business Basic, Business Standard, Business Premium) are designed for organisations with up to 300 users.
• Enterprise plans (Microsoft 365 E3 and E5, and the Office 365 equivalents) have no user cap and add more compliance and security depth.
• Frontline plans (F1 and F3) are for people who do not sit at a desk, such as shop-floor, warehouse or retail staff.

The plans at a glance

Plan	Best for	What to know
Business Basic	Staff who only need email, Teams and files	Office apps in the browser and on mobile, no desktop apps
Business Standard	Office staff who need the desktop apps	Adds desktop Word, Excel, PowerPoint and Outlook
Business Premium	Anyone handling client or sensitive data	Adds Defender for Business, Intune and Conditional Access (Entra ID P1)
E3	Organisations over 300 users, or needing more compliance	No user cap, includes Conditional Access
E5	A small group with specific security or compliance duties	Adds the wider Defender suite, Purview compliance, Power BI Pro and Teams Phone
F1 and F3	Shop-floor, warehouse and other frontline staff	Lower cost, with limits on storage and features

Business plans are capped at 300 users. The details change, so confirm them against Microsoft’s comparison before you buy.

What the business plans give you

Business Basic includes email, Teams, SharePoint and OneDrive, with the Office apps in the browser and on mobile, but not the desktop apps.

Business Standard adds the desktop versions of Word, Excel, PowerPoint and Outlook, plus extra Teams features such as webinars.

Business Premium keeps everything in Standard and adds the security and device management that most small businesses need but often lack: Microsoft Defender for Business, Microsoft Intune for managing devices, and Microsoft Entra ID features such as Conditional Access. It also includes email protection against phishing links and unsafe attachments through Microsoft Defender for Office 365, and sensitivity labels for classifying documents. Check the current plan comparison for the exact list, because Microsoft adjusts what each plan includes.

For most organisations under 300 people that handle client data, Business Premium is a sensible baseline for anyone who uses email, because it is the most direct route to the controls an insurer or client will ask about.

Why the plan matters for security

Every Microsoft 365 tenant has a baseline called security defaults, in Microsoft Entra ID. It asks users to register for multi-factor authentication and blocks some older sign-in methods. It is useful, but it is all or nothing.

If you want your own rules, such as requiring multi-factor authentication only from unfamiliar locations, or allowing sensitive apps only from managed devices, you need Conditional Access. That comes with Microsoft Entra ID P1, which is included in Business Premium, E3 and E5 but not in Business Basic or Standard. This single difference is the main reason security reviews often point businesses towards Business Premium.

When E3 or E5 makes sense

You need Enterprise plans if you have more than 300 users, or if you need capabilities that Business plans do not include, such as certain compliance, retention and eDiscovery features.

E5 adds the wider Microsoft Defender security suite, advanced compliance tooling in Microsoft Purview, Power BI Pro and Teams Phone. Those are valuable if you will use them. If you will not, they are cost with no benefit. A common pattern is E3 for most staff and E5 for a small group with specific security or compliance duties.

Frontline plans

Staff who use a shared device, a phone or a kiosk rarely need the full desktop suite. F1 and F3 are priced and designed for them. Check what each includes, because frontline plans carry limits on storage and features, and they are not a substitute for the plan an office worker needs.

Mixing plans by role

You can assign different plans to different people. A sensible split for a 120-person firm might be:

1. Business Premium for office staff and anyone handling sensitive data.
2. A lower tier or frontline plan for people who only need email and Teams.
3. A small number of higher-tier licences for administrators or specialists.

One caution: security features are licensed per user. If you use Conditional Access to protect the business, every user it covers needs a licence that includes it. Check that before you downgrade anyone.

Where Copilot fits

Microsoft 365 Copilot is a per-user add-on. It sits on top of a qualifying base plan, so choose your base plan first and then decide who genuinely needs Copilot. Microsoft has been changing how Copilot is packaged and priced, including options aimed at smaller organisations, so confirm the current eligibility and pricing on Microsoft’s Copilot licensing page before you buy. Buying it for everyone before a pilot is the expensive way to learn who uses it.

Things that change

• Plan names and contents. Microsoft renames and reshuffles plans from time to time. Entra ID was called Azure Active Directory until 2023, for example, and older guides still use the old name.
• Teams. Microsoft now sells some suites with and without Teams. Check which version you are being quoted.
• Price and term. Terms can be monthly, annual or multi-year, and the monthly option may cost more than paying annually. Compare quotes on the same term.

Common mistakes

• Standardising everyone on the highest plan “to keep it simple”.
• Holding two plans for one person, or add-ons for features a plan already includes.
• Forgetting frontline staff, who often cost far less on a plan designed for them.
• Different renewal dates for different licences, which removes your negotiating position at each renewal.

Questions to ask before you choose

1. How many people need each level of capability, and who decides?
2. Which security controls do we need, and which licence includes each one?
3. Do we exceed, or are we likely to exceed, 300 users?
4. Which of the extras in a higher plan will we actually use in the next twelve months?
5. What is the term, the billing frequency and the notice period on each option?

A simple way to decide

For each group of users, write down what they do, what data they touch, and which devices they use. Then pick the lowest plan that covers the security controls you need for that group. Review annually, because roles and Microsoft’s plans both change.

About this guide

Innoligo is an authorised Microsoft CSP partner. This guide is general information and applies whoever you buy your licences from. If you would like it mapped to your actual users and spend, an assessment covers the cost view and the security baseline together.

Microsoft, Microsoft 365, Entra, Intune, Defender, Purview, Teams and Copilot are trademarks of the Microsoft group of companies. This guide is independent and is not published or endorsed by Microsoft.