Microsoft 365 is comprised of many solutions that aid business collaboration and productivity. This includes core Office applications, cloud storage and collaborative tools.

By leveraging M365 across your organisation, you can empower everyone to work smarter and meet the challenges of the remote working world.

However, M365 is subscription-based, meaning you need the correct licence to use it. And there’s plenty of choice when it comes to licensing.

We’ve put together this guide to Microsoft 365 licensing to help you find the best option for your business.

What is Microsoft 365?

Microsoft 365 is a productivity suite that combines familiar Office apps (like Word, Excel, PowerPoint and Outlook) with cloud-based services and enhanced security features. It was formerly known as Office 365.

It’s designed to help individuals, businesses and enterprises achieve more. With cloud storage, it’s also built for the remote working environment, enabling your teams to work together even from separate locations.

M365 also benefits from twice-yearly updates, so you constantly gain new features and improvements.

The key benefits of M365 include:

• Work from anywhere: Access your files and applications from any device with an internet connection, thanks to cloud-based services and collaborative tools.
• Improved collaboration: Easily share and work on documents with others in real-time, preventing data being lost or stuck in multiple versions.
• Enhanced security: Protect your sensitive data with built-in security features, safeguarding your business against cyber attacks.
• Always up-to-date: Automatic updates allow you to get long-term value without having to move to new solutions.

What’s included in Microsoft 365?

Microsoft 365 comprises many tools and applications. These include:

Office applications:

• Word, for document creation and editing
• Excel, for spreadsheets and data analysis
• PowerPoint, for creating and sharing presentations
• Outlook, for email, calendar and contacts management
• OneNote, for digital note-taking

Cloud-based services:

• OneDrive, providing cloud storage for file backup and sharing
• SharePoint, for document management and collaboration
• Exchange, for email, calendar, and contacts management

Additional tools and features:

• Power Automate, to create automated workflows (though with limited use rights compared to the full Power Platform license)
• Power Apps, for creating custom business applications (again with limited use rights)
• Power BI, to visualise data and share meaningful reports (E5 only)
• Access, for database management
• Publisher, for desktop publishing
• Advanced protection against cyber threats with robust security features

The exact tools you get will depend on your plan type, as some contain more features than others.

How is Microsoft 365 licensed?

Microsoft 365 for businesses operates on a subscription model. It uses user-based licensing, with licences assigned to individual employees. You’ll pay for a license for every user, with the option to license on a monthly rolling contract or committing for 12 months to achieve the best price.

When it comes to licences, there are a few different plans to choose from, dependent on your needs and budget. M365 has options for both businesses and enterprises. The business options suit organisations with up to 300 users, while enterprise licences are ideal for bigger companies.

Let’s dive into the licensing options for each.

Microsoft 365 Business licenses_

Businesses with up to 300 users can choose from the below options:

• Microsoft 365 Business Basic: This plan provides essential cloud-based productivity tools like email, calendar and online versions of Office apps
• Microsoft 365 Business Standard: This plan includes desktop versions of Office apps, along with collaboration tools like SharePoint and Teams
• Microsoft 365 Business Premium: This plan offers all the features of Business Standard, alongside advanced security and management tools
• Microsoft 365 Apps for business: This plan focuses solely on desktop versions of Office apps without any cloud-based services

To compare exactly what you get under each plan, we’ve put together this handy table:

Microsoft 365 Enterprise licenses_

For enterprises with more than 300 users or advanced needs, Microsoft 365 also has enterprise options. These are:

• Microsoft 365 E3: This plan offers desktop versions of Office applications, advanced threat protection and additional features like Teams and Yammer.
• Microsoft 365 E5: The most comprehensive plan, offering all features of E3 plus advanced security, compliance and analytics capabilities, including Windows Virtual Desktop and Azure Information Protection.
• Microsoft 365 F3: Designed for frontline workers, this plan offers access to core productivity apps and services, but with limited features compared to E3 and E5. Any apps included will be exclusively for web and mobile.

Once again, we’ve put together a comparison table to show you the key differences:

Power Apps and Power Automate are also included within these licences, however they offer limited functionality compared to a full licence.

Choosing the right licence type will depend on the needs of your business and your budget, so spend time researching the options. A Microsoft partner will also be able to discuss different plans with you to uncover the best licence type for your business.

How much does a Microsoft 365 license cost?

A Microsoft 365 licence is priced as follows, for each type:

• Microsoft 365 Business Basic: £4.90 per user, per month if paid annually, or £5.88 if paid monthly
• Microsoft 365 Business Standard: £10.30 per user, per month if paid annually, or £12.36 if paid monthly
• Microsoft 365 Business Premium: £18.10 per user, per month if paid annually, or £21.72 if paid monthly
• Microsoft 365 Apps for business: £8.60 per user, per month if paid annually, or £10.32 if paid monthly
• Microsoft 365 E3: £33.10 per user, per month if paid annually, or £39.72 if paid monthly
• Microsoft 365 E5: £52.40 per user, per month if paid annually, or £62.88 if paid monthly
• Microsoft 365 F3: £6.60 per user, per month if paid annually, or £7.92 if paid monthly

Please note, these prices do not include VAT. Each plan will auto-renew at the end of the month or year (depending if you pay monthly or annually).

Some licence types are also available to try on a free trial, giving you a chance to experience it before you commit.

Why choose Infinity Group as your Microsoft 365 Partner_

If you’re ready to migrate your legacy systems to Microsoft 365, working with a Microsoft partner can ensure a smoother transition. This includes helping you to determine the best plan for your business needs and configure it correctly across your teams.

Infinity Group are one of the largest independently owned Microsoft partners in the UK. Our expert consultants are accredited in Microsoft 365, enabling them to help you plan, deliver and adopt it across your business.

By understanding your unique goals and requirements, we’ll ensure you get the most out of your Microsoft 365.

Our dedicated service desk is fully Microsoft certified, meaning we can hands-on support whenever you need it.

Find out more about Microsoft 365 and our services.