Choosing Microsoft 365 Licences: Which Plan Suits Your SME?

Choosing Microsoft 365 Licences: Which Plan Suits Your SME?

Microsoft 365 is the productivity suite most SMEs run on. But which plan should you choose? Business Basic, Business Standard, Business Premium, or Enterprise? The choice is confusing and the consequences are significant: too few features and you miss essential tools, too many and you pay for things you never use. This guide helps you make the right call.

Key takeaways (TL;DR)

• Business Standard is the best choice for most SMEs (office work with desktop apps)
• Business Premium is a must for security-conscious organisations (Intune, Defender, Conditional Access)
• Price difference between Standard and Premium: roughly €10 per user per month - often well worth the investment
• The Copilot add-on costs an extra €30 per user per month - test it with a pilot group first to see whether it adds value
• An annual contract is 15-20% cheaper than paying monthly, but locks you in for 12 months

The Microsoft 365 landscape

Microsoft offers dozens of licence variants. For SMEs (up to 300 users), the Business licences are the relevant ones. Here are the main categories.

Microsoft 365 Business Basic

The entry-level plan for cloud-first businesses.

Included:

• Web versions of Word, Excel and PowerPoint
• Email with a 50GB mailbox
• OneDrive with 1TB of storage
• Teams for chat and meetings
• SharePoint for collaboration

Not included:

• Desktop apps (Word, Excel, PowerPoint)
• Advanced security features
• Device management (Intune)

Best for: Businesses that mostly work in the browser and don't create complex documents.

Microsoft 365 Business Standard

The most popular choice for SMEs.

On top of Basic:

• Full desktop apps for Windows and Mac
• Outlook desktop app
• Publisher and Access (Windows only)
• Webinar features in Teams

Best for: Most office environments where people create documents, spreadsheets and presentations.

Microsoft 365 Business Premium

Productivity plus security and management.

On top of Standard:

• Entra ID P1 (formerly Azure AD P1)
• Intune for device management
• Microsoft Defender for Business
• Azure Information Protection P1
• Conditional Access

Best for: Businesses that take security seriously, support remote working or need to meet compliance requirements.

Comparison table

When to choose which plan

Choose Business Basic if:

• Your team mainly works in the browser
• You don't build complex Excel models or large presentations
• You have separate security tools or accept basic protection
• Budget is your main consideration

Note: Without desktop apps you will run into limitations with advanced Excel use, macros or large documents.

Choose Business Standard if:

• Your team works with complex documents, spreadsheets or presentations
• You need the desktop experience of Outlook, Word and Excel
• Security matters, but you already have other solutions in place or accept a basic level
• You want to host webinars through Teams

This is the sweet spot for most SMEs that put productivity first without advanced security requirements.

Choose Business Premium if:

• Security is a priority for your organisation
• You want to manage devices centrally with MDM
• You need to meet compliance requirements (GDPR, NIS2, industry-specific rules)
• You have remote workers and want to implement Conditional Access
• You want one platform for both productivity and security

The added value lies in the security features you would otherwise have to buy separately.

Premium security features in the spotlight

Business Premium includes security features that would otherwise cost thousands of euros.

Microsoft Defender for Business

Endpoint protection for all your devices.

• Antivirus and anti-malware
• Endpoint Detection and Response (EDR)
• Automatic isolation of threats
• Threat analytics and reporting

This is enterprise-grade security, now available to SMEs.

Microsoft Intune

Device management for Windows, Mac, iOS and Android.

• Central configuration and policies
• App distribution
• Compliance monitoring
• Remote wipe if a device is lost

Conditional Access

Access control based on context.

• Block access from risky locations
• Require MFA for suspicious sign-ins
• Give only compliant devices access to company data
• Session restrictions for sensitive apps

Azure Information Protection

Data classification and protection.

• Labels for confidential documents
• Automatic encryption
• Tracking of sensitive files
• Prevention of accidental sharing

Common mistakes

Going too cheap

Choosing Basic when your team needs desktop apps leads to frustration and workarounds. The savings don't outweigh the lost productivity.

Underestimating security

Picking Standard without thinking about security can prove expensive when an incident hits. The investment in Premium is often lower than the cost of a single ransomware attack.

Overprovisioning

Not every employee needs Premium. A receptionist has different needs from a finance manager. Mix licences where it makes sense.

No adoption plan

Buying licences is not the same as using them. Invest in training and adoption to get value from your investment.

Mixing licences

You don't have to give everyone the same plan. Microsoft lets you mix plans within a single tenant.

Example:

• Management and IT: Business Premium (security features needed)
• Office staff: Business Standard (desktop apps needed)
• Warehouse staff: Business Basic (Teams and email only)

That way you optimise costs while everyone gets what they need.

Add-ons and extensions

Sometimes you need a specific feature that isn't part of your base plan.

Popular add-ons:

• Microsoft Copilot: AI assistant for productivity
• Power BI Pro: Advanced business intelligence
• Project: Project management
• Visio: Diagrams and flowcharts
• Extra OneDrive storage: More than 1TB per user

Weigh up whether the add-on is worth it, or whether upgrading to a higher plan works out cheaper.

Enterprise alternatives

For organisations with more than 300 users or specific enterprise needs, there are the E licences (E3, E5). These offer:

• An unlimited number of users
• Advanced compliance tools
• eDiscovery and archiving
• Advanced analytics

For most SMEs, the Business licences are sufficient.

The role of a Microsoft partner

Choosing licences is complex and the consequences are long-lasting. A Microsoft 365 partner can help with:

• Assessing your current situation and needs
• Advice on the optimal licence mix
• Migration and implementation
• Training and adoption
• Ongoing management and optimisation

Partners often have access to more flexible terms and can help with volume negotiations.

Keeping costs under control

A few tips to keep costs in check:

Regular reviews: Check every month whether licences are still in use. Inactive accounts cost money.

Offboarding process: Make sure licences are released as soon as an employee leaves.

Annual contracts: A commitment often earns a discount compared with monthly payments.

Trial periods: Test new features through trials before you buy.

Decision tree

Follow this decision tree to choose quickly:

1. Do you need desktop apps (Word, Excel, Outlook)?

   • No → Business Basic may be enough
   • Yes → Go to question 2

2. Do you need advanced security (EDR, MDM, Conditional Access)?

   • No → Business Standard
   • Yes → Business Premium

3. Do you need specific add-ons (Copilot, Power BI)?

   • Assess each add-on on its own merits

Getting started

The right licence choice is a balance between functionality, security and cost. For most SMEs, Business Standard or Business Premium is the best choice, depending on your security requirements.

Take the time to map out your needs. Talk to your team about what they need. And bring in a specialist if the choice remains unclear. The right licences are the foundation for productive and secure working.