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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.
How Microsoft 365 Business Premium Compares to Office 365 E3
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
Timestamped Key Moments
- 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
What is the Core Difference Between Business Premium and Office 365 E3?
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.
How Business Premium Address Identity Based Attacks
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.
Device and Application Management Differences
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.
Endpoint and Email Security Comparison
Business Premium includes both Microsoft Defender for Business and Microsoft Defender for Office 365 Plan 1. Together, these protect against:
- Endpoint threats
- Phishing attacks
- Malicious links and attachments
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.
Data Protection Capabilities
Business Premium includes Microsoft Purview Information Protection and foundational data loss prevention capabilities. These controls allow organizations to:
- Classify sensitive data
- Apply encryption
- Reduce accidental data leakage across email and files
Office 365 E3 supports more advanced compliance scenarios. But for most environments, Business Premium covers the core controls without additional licenses.
Pricing Changes After July 1, 2026
|
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.
When Office 365 E3 is the Better Choice
Business Premium is capped at 300 users per tenant. E3 is the better fit when:
- Your organization exceeds 300 users
- 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.
How to Evaluate Licensing Without Overbuying
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.
