Microsoft 365 Business Premium and Office 365 E3 sit at nearly the same price point but delivery very different security and management outcomes.
The decision comes down to whether your licenses align with how identity, devices, email, and data are protected inside your tenant.
With Microsoft pricing and feature changes taking effect on July 1, 2026, this comparison matters more than ever.
In this episode of "What’s New with Microsoft," Wade Walker (VP, Microsoft Alliance at Sourcepass MCOE) compares Microsoft 365 Business Premium and Office 365 E3.
The discussion covers three areas:
How Microsoft defines each license
Where security and management capabilities differ
How those differences affect real-world licensing decisions
00:00 - Introduction and comparison context
01:10 - How Microsoft frames Office 365 and Business Premium licensing
01:35 - Business Premium security and management features
02:00 - Identity security with Microsoft Entra ID Plan 1
02:35 - Device and application management with Intune
03:01 - Endpoint protection with Defender for Business
03:20 - Email security and phishing protection
03:47 - Data loss prevention and information protection
04:15 - July 1, 2026 pricing changes
04:57 - When Office 365 E3 is still the better option
05:38 - Decision framework for choosing the right license
Office 365 E3 is a productivity-focused license. It delivers email, collaboration tools, and desktop applications. Security, identity controls, and device management are added separately.
Microsoft 365 Business Premium is a bundled baseline. It combines productivity with built-in identity protection, endpoint security, device management, and data protection. Microsoft positions it as the right next step for organizations that want security enforced by default.
Identity based attacks are the most common entry points into Microsoft tenants.
Common examples include:
Password spray attacks
MFA fatigue
Token theft
Business Premium includes Microsoft Entra ID Plan 1. This enables conditional access, consistent MFA enforcement, and modern access controls across the tenant.
Office 365 E3 does not include Entra ID Plan 1 by default. It must be licensed separately. Without it, identity protection gaps are difficult to avoid.
Business Premium includes Microsoft Intune Plan 1. This allows organizations to apply consistent policies across:
Windows
macOS
iOS
Android
These controls apply regardless of device ownership. Office 365 E3 does not include Intune. Comparable functionality requires additional licensing.
Business Premium includes both Microsoft Defender for Business and Microsoft Defender for Office 365 Plan 1. Together, these protect against:
Starting July 1, 2026, Defender for Office 365 Plan 1 will be added to Office 365 E3. This narrows one gap, but endpoint protection and device management remain separate purchases under E3.
Business Premium includes Microsoft Purview Information Protection and foundational data loss prevention capabilities. These controls allow organizations to:
Office 365 E3 supports more advanced compliance scenarios. But for most environments, Business Premium covers the core controls without additional licenses.
|
License |
Current Price |
Price After July 1, 2026 |
|
Microsoft 365 Business Premium |
$22/user/month |
$22/user/month |
|
Office 365 E3 |
$23/user/month |
~$26/user/month |
Business Premium becomes the lower-cost option while still building identity, device, endpoint, email, and data protection. E3 will require add-ons to reach a comparable security baseline.
Business Premium is capped at 300 users per tenant. E3 is the better fit when:
Large mailbox storage is a requirement
Advanced compliance needs drive the decision
Security is standardized on non-Microsoft tooling
How to Decide Between Business Premium and Office 365 E3
Business Premium is a strong default for environments under 300 users. Identity controls, device management, endpoint protection, and data protection are included by default.
Office 365 E3 is the right choice when scale, storage, or advanced compliance are the primary drivers and security is handled outside Microsoft's native stack.
The right license depends on where security and management controls are expected to live inside the tenant. Some environments need security bundled by default. Others build controls through separate licenses. Understanding that distinction reduces overlap and unnecessary spend.
For ongoing updates on Microsoft licensing and platform changes, the Demystifying Microsoft podcast covers what matters most.
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Nicole Walker