Everything You need to know About Microsoft 365 Licenses
Carol Njenga
1/9/20252 min read


Everything You Need to Know About Microsoft 365 Licenses
Microsoft 365 offers a range of subscription packages designed to meet the needs of individuals, businesses, and educational or non-profit organizations. Here's a breakdown of the key options available:
Consumer Packages:
Microsoft 365 Personal:
Designed for single users, this plan includes access to Office apps like Word, Excel, PowerPoint, OneNote, and Outlook. It also offers 1TB of OneDrive storage and advanced security features.
Microsoft 365 Family:
Perfect for households, this plan supports up to six users. Each user gets 1TB of OneDrive storage and full access to Office apps, making it ideal for families or shared use.
Commercial Packages:
Microsoft 365 Business Basic:
Ideal for small businesses, this plan includes web-based Office apps, email hosting, Teams, and 1TB of OneDrive storage. It doesn't offer desktop Office apps but provides essential collaboration tools.
Microsoft 365 Business Standard:
This plan includes desktop Office apps (Word, Excel, PowerPoint, etc.), Teams, email hosting, and 1TB of OneDrive storage. It’s suitable for businesses needing a complete Office solution.
Microsoft 365 Business Premium:
Offering all the features of Business Standard, plus advanced security features like device management, advanced threat protection, and data loss prevention. Ideal for businesses that require more robust security and compliance tools.
Microsoft 365 Apps for Business:
This plan includes only the Office apps (Word, Excel, PowerPoint, etc.), without email hosting or other business services. It’s a more affordable option for those who don’t need the full range of business tools.
Non-Profit & Education Sector:
Non-Profit Packages:
Microsoft offers discounted Microsoft 365 plans for non-profits, such as Microsoft 365 Nonprofit Business Basic, Business Standard, and even free versions like Microsoft 365 Nonprofit Business Premium for qualifying organizations. These plans offer similar features to their commercial counterparts but at a significantly reduced cost.
Education Packages:
Microsoft 365 Education A1: Free for eligible institutions, this plan provides web-based Office apps, OneDrive, and Teams collaboration tools.
Microsoft 365 Education A3 & A5: Paid plans that offer additional features like desktop Office apps, advanced security, and enterprise-level compliance tools. A3 includes more advanced tools for classrooms, while A5 offers premium security and analytics.
Enterprise Packages:
Microsoft 365 E3:
Designed for larger businesses, the E3 plan offers full access to Office apps, Teams, email hosting, and enterprise-level security features. It includes rights management, data loss prevention, and compliance tools.
Microsoft 365 E5:
This is the most comprehensive enterprise package. It includes everything in E3 plus advanced security tools like Microsoft Defender, audio conferencing, and analytics tools. Ideal for organizations with higher security and compliance needs.
Key Differences Between Enterprise Packages (E3 vs. E5):
Security & Compliance: E5 offers more advanced features, such as Microsoft Defender for Office 365, enhanced data loss prevention, and additional compliance tools.
Analytics & Collaboration: E5 includes Power BI Pro, which offers business analytics tools, as well as Audio Conferencing for Teams meetings, a feature not available in E3.
In summary, Microsoft 365 offers a variety of licenses designed to meet different needs—from personal use to large enterprise operations. Consumer packages like Microsoft 365 Personal and Family are ideal for individuals and households, while commercial plans such as Business Basic and Business Premium cater to businesses of various sizes. The Enterprise plans, especially E3 and E5, are designed for large organizations with complex needs, offering advanced security, analytics, and compliance tools. For non-profits and educational institutions, discounted and even free plans are available to ensure accessibility.