Comparing Microsoft Office 365 Enterprise Plans: Getting Your Licensing Strategy Right | Blog

Selecting the right Microsoft Office 365 licensing plan is a critical decision for organizations that can lead to greater cost savings, negotiating power, and flexibility. Read on to discover how Everest Group’s 5S Framework can make this complicated task easier and see our expert analysis comparing the various license plans to make the best choice.

Since its inception at the start of the century, Microsoft Office has become one of the leading business productivity suites, with more than 1 million companies worldwide now subscribing to Microsoft 365 (M365) and over 731,000 companies in the United States alone using the family of office software.

Introduced in 2017, Microsoft 365 brought together the best of Office, Windows, and Enterprise Mobility and Security (EMS) and eventually replaced Office 365 three years later. As part of this move, previous O365 subscriptions for small- and medium-sized businesses as well as the enterprise-level Office 365 ProPlus subscriptions were renamed with M365 branding.

Many enterprises grapple with the decision over whether to use Microsoft 365 or Office 365. Having gone through several feature and licensing model iterations over the past years, Microsoft has a plethora of licenses to choose from. Thus, selecting the right license can often be tricky and confusing. But by getting this strategy right, organizations can obtain higher cost savings and greater flexibility.

To help clients select the optimal license plan and the right fit for their organizations, Everest Group has curated a set of guiding principles called the 5S Framework that considers budget, requirements, inventory, plans, and usage. See below for a snapshot of the framework applied for M365 licensing. To read more about the 5S Framework, see our prior blog.

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Selecting the appropriate plan

Choosing whether users require an M365/O365 suite or if acquiring individual components would better meet their needs is one of the most important decisions enterprises face. Suites usually make sense when you need at least three online services such as Exchange, SharePoint, or Teams. It is more cost-effective to buy a suite if your organization requires more online services.

The below table summarizing the main features of Microsoft Enterprise Plans (suites) with data being sourced directly from Microsoft can help you choose the appropriate license plan based on your requirements:


 Features/License Plans Microsoft 365 Apps for enterprise (FKA O365 ProPlus) Office 365 E1 Office 365 E3 Office 365 Microsoft 365 E3 Microsoft 365 E5
Office apps (PowerPoint, Word, Excel, OneNote, Access (PC only)) X X (partially, web apps) X X X X
Email and calendar (Outlook, Exchange, Bookings) X (partially) X X X X X
Meetings and voice (Teams) X (partially) X (partially) X (partially) X X (partially) X
Social and intranet (SharePoint, Yammer)   X X X X X
Files and content (OneDrive, Stream, Sway) X (partially) X X X X X
Task management (Power Apps, Power Automate, Planner, To Do) X (partially) X X X X X
Advanced analytics (MyAnalytics, Power BI Pro)   X (partially) X (partially) X X (partially) X
Device and app management X X (partially) X X X X
Identity and access management X X X X X (partially) X
Threat protection       X X (partially) X
Information protection     X (partially) X X (partially) X
Security management         X X
Advanced compliance     X (partially) X   X


The next step after choosing the offering that will deliver maximum value to your enterprise is getting the Microsoft licensing right. Merely deciding which plan to select is not enough, how to license it is equally important since discounts are directly linked to this. An enterprise’s ability to negotiate with Microsoft also depends on the nature of its contract. See more details on the contracting models in our next blog in this series.

While every organization has its own set of requirements to consider, using this framework will help you negotiate effectively and attain the best licensing fit for your Microsoft/Office 365 portfolio. For a more detailed analysis, please reach out to [email protected].

Explore more about Everest Group’s benchmarking offerings.


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