The Question Everyone Asks

When you start looking at Microsoft 365 subscriptions, the licensing matrix feels designed to confuse you. Business Premium, E3, E5, add-ons, standalone plans. Microsoft doesn’t make this easy, does it?

For a small business with 10 to 20 users, the question is straightforward: do you actually need E3 or E5, or is Business Premium enough?

After working with these plans and testing them in real environments, I can give you a direct answer. For most small businesses, Business Premium is not just enough. It’s the right choice.

What Business Premium Actually Gives You

Business Premium is not a stripped-down version of the enterprise plans. It’s a complete package built specifically for small and medium businesses, with a cap at 300 users.

In a single license you get the full Microsoft 365 productivity suite including Exchange Online, Teams, OneDrive, and SharePoint. You get Intune Plan 1 for device management and app deployment. You get Entra ID Premium P1 which means Conditional Access and proper MFA enforcement. You get Defender for Business for endpoint protection with EDR capabilities. And you get Defender for Office 365 Plan 1 for email security.

That’s not a starter pack. That’s a complete security and management platform. The kind of setup that would have required multiple products and significant budget just a few years ago now comes bundled in one SKU.

  • Includes Office apps, email, Teams, OneDrive, SharePoint, etc.
  • Intune Plan 1 basic device management and compliance policies.
  • Entra ID Premium P1 identity and access control (MFA, Conditional Access).
  • Information Protection & Defender for Business endpoint protection and basic threat defense.
  • Focused on SMB security & management with a ~300 users cap.

The Security Question

This is where people get nervous. They assume Business Premium must have gaps because it costs less than the enterprise plans.

Here’s the reality: Business Premium protects against the threats that actually hit small businesses. Phishing attempts get blocked by MFA and Conditional Access. Malware and ransomware get caught by Defender for Business. Unmanaged devices get blocked by Intune compliance policies. Unauthorized access gets stopped before it starts.

The tools are designed to work without a dedicated security team watching dashboards all day. You just need to configure them properly, set your policies and they do their job.

What matters more than the license tier is whether you actually use what you have. An E5 subscription with default settings is less secure than a properly configured Business Premium tenant. I’ve seen it happen.

As for subscription comparison, I’ve used this great site: https://m365maps.com/matrix.htm#000001000001001000000

Where Business Premium Stops

Business Premium is optimized for control and baseline security. It doesn’t try to be everything.

You won’t get Intune Plan 2 features like Advanced Analytics or Remote Help. There’s no Endpoint Privilege Management for removing local admin rights at scale. No Cloud PKI for certificate automation. No Windows Enterprise features like Autopatch or Quick Machine Recovery. And no Security Copilot for AI-assisted threat hunting.

These aren’t accidental omissions. They’re enterprise features designed for environments with hundreds or thousands of devices, dedicated IT teams, and complex compliance requirements. At 10 to 20 users, you probably don’t need them yet.

How E3 Changed Recently

Microsoft quietly upgraded what E3 includes. It’s no longer just Office plus compliance tools.

E3 now includes Intune Plan 2 with Remote Help and Advanced Analytics. It includes Windows Enterprise E3 with Autopatch readiness and better recovery options. The gap between Business Premium and E3 has widened on the management and recovery side.

E3 makes sense when device count grows, when recovery time becomes critical, and when you need deeper visibility into what’s happening across your fleet. It’s the step up when scale starts to matter.

But here’s what catches people off guard: E3 doesn’t automatically include the security features many assume it has. Defender for Business is actually a Business Premium thing. With E3, you often need additional security add-ons to match what Business Premium includes out of the box.

What E3 includes:

  • All Office apps, email, Teams, OneDrive, SharePoint and enterprise storage.
  • Intune Plan 1 (same basic Intune as Business Premium).
  • Entra ID Premium P1 same foundational identity as Business Premium.
  • Enterprise features such as larger mailboxes, Windows Enterprise rights, and broader compliance controls.

When E5 Actually Makes Sense

E5 is not about getting more features. It’s about reducing risk in environments where risk is already high.

You move to E5 when you’re dealing with privileged access sprawl across your organization. When you need certificate lifecycle management at scale. When your security team needs AI-assisted investigation tools. When compliance and audit requirements demand advanced retention and forensic capabilities.

If those problems don’t sound familiar, E5 is probably overkill. It’s powerful, but most of that power sits unused in small business environments.

What E5 includes:

  • All E3 capabilities plus multiple advanced security and compliance tools.
  • Entra ID Premium P2 (advanced identity protection and governance).
  • More advanced Defender services, Cloud App Security, and tools like Insider Risk Management.
  • Power BI Pro, Teams Phone system, and expanded analytics.

The Practical Decision

For a small business starting fresh today, Business Premium makes the most sense. It delivers modern identity security, proper device management, and solid endpoint protection without unnecessary complexity. You can actually manage it without hiring dedicated security staff.

You should consider moving to E3 when your user count pushes past the 300 limit, when enterprise recovery features become important, or when you need the analytics capabilities that come with Intune Plan 2.

You should consider E5 when security operations become a full-time job, when compliance requirements demand advanced tooling, or when you’re actively dealing with the kind of threats that need investigation capabilities beyond what standard tools provide.

Until you hit those points, Business Premium is not a compromise. In my opinion, it’s the optimized choice.

Why I Started Here

For this blog, I deliberately chose Business Premium as my testing ground. Not because it was cheaper, but because it reflects what most real environments actually run.

Enterprise features are impressive on paper, but they don’t teach you how Microsoft 365 management actually works day to day. Business Premium does. The skills and patterns you build here transfer directly to larger environments later.

Think of it this way: Business Premium teaches you how modern Microsoft cloud management works. E3 shows you how it scales. E5 shows you how it’s defended when things go seriously wrong.

This progression matches how most IT careers actually develop. Start with the fundamentals, build real experience, then move up when the problems demand it.