Microsoft 365 Business Standard vs Office 365E3 – in-depth comparison with overview chart

One of the most asked questions, what is the difference between Microsoft 365 Business Standard vs Office E3? The price of a Business Premium license is almost 40% lower than that from an E3 license and both share pretty much the same features. So why should you buy a more expensive E3 license? Or is Business Standard good enough for your organization?

It’s good to know that you can buy 300 Microsoft 365 Business Standard licenses and then continue with the Office 365 E3 licenses. So the seat cap of 300 users doesn’t limit you in the total amount of users within your tenant.

If Business Standard is good enough for your organization, then you can start with the 300 Business Standard plans and then give the rest of the users an E3 license. This little tip just saved you € 2.250 every month 😉

In this article, I will try to help you with comparing the two different Microsoft Office 365 plans. At the end of this article, you will find a chart with all the features compared next to each other for an easy overview.

The main difference between Business Standard and E3

The biggest difference between Microsoft 365 Business Standard and Office 365 E3 are the business apps. Business Standard is more focused on smaller companies. So it comes with Business apps like Microsoft Bookings and Invoicing.

E3 though has more intended for the large companies, something you see in the storage space of Exchange Online mailboxes and OneDrive. Also, some very useful compliance tools are only included in the enterprise plans.


A big difference between the two plans is the price and commitment. You can only subscribe to an annual commitment with an Enterprise plan. So while you pay per month, you are subscribed per year. If you want a monthly subscription, you can only go for the Business plans, they have a monthly commitment plan.

Now the price difference is obvious, for a yearly commitment an Enterprise E3 license will cost you $ 20.- and a Business Standard Licence only $ 12.50 (monthly commitment $ 15.00). You can check the prices for your country here at

In-place archive

Both plans come with Exchange Online, but Business Standard comes with Exchange Online plan 1 and E3 comes with Exchange Online plan 2. So what is the difference between does two?

The big difference is that Plan 2 comes with unlimited storage in the form of an in-place archive and a 100gb mailbox. Exchange Online Plan 1 “only” has a 50gb mailbox.

Besides the amount of storage, Exchange Online Plan 2 also has the following features:

  • Hosted Unified Messaging services that provide call answering, a dial-in user interface, and company automated attendant capabilities
  • DLP Policies to prevent data loss like Personal Identification Numbers or Credit Card number

Now if the amount of mailbox storage is the only deal-breaker for you, then you could also buy the Exchange Online Archiving Add-on for Business Standard. This cost only $ 3.00 per user per month so that is still cheaper than E3.

Virtualization Rights

If you are using a terminal server (like Remote Desktop or Citrix) or you are running virtualized desktops (VDI) then you can’t use Business Premium. This is not allowed within the Microsoft 365 Business licenses.

It’s not only a license limitation but activating a Business Standard license within a Remote Desktop or VDI session will count toward the 5 devices limit. So every server within the cluster will consume a license.

On-Premise Services

With Enterprise E3 you can use the user license in a hybrid environment. This means that the license can be used for both Exchange Online as the on-premise Exchange server. The same goes for SharePoint. Business Standard users can only use the Online Services.

Group Policies

Larger organizations use Group Policies to control (office) applications within a domain. This is only supported by the Enterprise plans. So without GPO support, your IT department can’t manage the Office application (setting security options, user preferences, template folders etc)

Data Loss Prevention and Compliance

The Enterprise plans come with all the features you need to prevent data loss and to make sure you are compliant with all the regulations. DLP policies allow you to set rules to get warned or to prevent sharing of Personal Identification Information or Bank and CreditCard Numbers.

Also, the In-Place Hold and Litigation Hold can be really important features. If your company deals with a lot of legal cases than these features allow you to collect all the evidence you need.


Both plans come with Excel, don’t worry. But there is a difference between Excel in Business Standard and Excel in E3. In the Enterprise plans Excel comes with the following additional features:

  • Spreadsheet Compare
  • Spreadsheet Inquire
  • Power Query
  • Power Pivot
  • Power View
  • Decoupled PivotTables and PivotCharts

So if you have some advanced Excel users or you are working with big data sets and want to do some powerful data analysis on it, then make sure you go for the Enterprise plans.


While Office 365 has a really good uptime, an issue can always occur. With Office 365 Enterprise plans you get 24/7 support for all issues. But with Business Premium you can only call for Critical issues.

Microsoft 365 Business Standard vs E3

  Microsoft 365 Business Standard Office 365 E3
  Starting at
$12.50 user/month
Starting at
$20.00 user/month
Included items More info More info
Core Details
Price user/month (annual commitment) $12.50 $20.00
Price user/month (monthly commitment) $15.00 $20.00
Seat Cap 300 Unlimited
Office Apps
Install Office on 5 Devices
Office Online
Excel Power Query and Power Pivot  
Use Office on Remote Desktop  
Standard Services
Onedrive Storage 1 TB Unlimited
Exchange Plan 1 Plan 2
Exchange Online Mailbox storage 50GB 100GB
Exchange Online Archive Storage 50GB Unlimited
SharePoint Plan 1 Plan 2
Business Apps
Stream Plan 1
Outlook Customer Manager
Microsoft Listings
Microsoft Bookings
Microsoft Invoicing
Insights by MyAnalytics
MyAnalytics (Full)
Advanced Services
Active Directory Intergration
Azure Rights Management
Mobile Device Management for Office 365
Licensed for hybrid deployment
Support for shared computer activation
Compliance – In-place hold, Data-loss prevention, in-place archive
More info More info
Buy Buy


If we take all the details into account I recommend Business Standard licenses only for smaller companies. The advantage of Group Policy, DLP, Compliance and Information Protection is something you really need in a larger environment.

I hope the Microsoft 365 Business Standard vs Office 365 E3 comparison helpt you with selecting the right license for your organization. If you have any questions, just drop a comment below.

Sources: Office 365 Platform Description

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24 thoughts on “Microsoft 365 Business Standard vs Office 365E3 – in-depth comparison with overview chart”

  1. Thanks Ruud, I use Microsoft 365 Business Standard. With that license, the “Data -> Get data -> Get Data from online Services” is grayed out. Is there an option to use Sharepoint online lists in excel without switching to E3?

  2. The url for this post is misleading google

    I was interested in Microsoft Business Premium vs E3 which this comparison is not.

  3. Hi!
    “If you are using a terminal server (like Remote Desktop or Citrix) or you are running virtualized desktops (VDI) then you can’t use Business Premium. This is not allowed within the Microsoft 365 Business licenses.”
    => you can use shared computers (RDS/TErminal Server) with Business Premium license.

  4. Hello – Thank you for the information. Do you know if Encryption is available in the Business Premium license?

  5. Hi
    Can you connect EM+S E3 (or even just Azure AD P2 ) to a business premium plan?
    We have business premium for our users but need to add additional security to block web access from outside of the office.
    Also you mentioned there is no litigation hold. Are retention policies available on Business Premium?


  6. Is there such a thing as Office 365 E3 ‘non-Enterprise’ ?
    Our licensing in the admin portal says we have Office 365 E3 and Microsoft 365 E3 but neither say ‘Enterprise’ – and our global admin is saying we don’t have things like PowerApps, Stream, Flow, etc… only SharePoint and Teams and desktop licenses for office.

    • No there is not a non enterprise version. The E in E3 stands for enterprise. With E3 you get the free version of Flow and PowerApps. They have some limitations like with Flow a limited amount of runs per month.

  7. Hi Ruud,

    According to my information, you miss out on two other important aspects. Perhaps you can add these two to your blogpost;

    – The possibility for PSTN calling with the Microsoft Phone System add-on. This Add-on is possible with E3 but not with Business Premium.
    – Using 3rd party plugins in Office.

    Question from my side; do you know if there is a difference between the SharePoint Plan that is used in Business Premium and E3?

    • I will update the article in a week or two. About your question, I don’t no them right now, but you could look them up in the SharePoint service descriptions.

  8. Hi, Ruud. Thank you for the helpful information in this article. Question.. if we have Business Premium mixed with E3, would ATP protect all accounts or only those assigned an E3 license?

  9. Hi Ruud
    Excellent Article. Thanks. Do you know if there is any limitation when connecting to Dynamics 365 Customer Engagement plan . I know all integration between Office 365 E3 plan and Dynamics 365 works nicely but do you know if there any limitation with Business Premium? Struggling to find any information on that, I’m just about to embark on a rollout of Dynamics 365 into a business Premium 365 setup

  10. Hello! Thank you very much for your article.

    Right now I am struggling with this decision because I am using an on-premises connectivity gateway to access my data with Powerapps and Flow.

    Most of my users have Office 365 Business Premium licenses, but apparently there is a small footnote at the pricing page that reads “On-premises connectivity is not available for Office 365 Business, Office 365 Enterprise E1 or Office 365 F1 SKUs.”. Now I don’t know if the Office 365 Business differs somehow from the Office 365 Business Premium, or if the Enterprise E3 can access this service. I have a ticket already about this, but the answer is not quite clear just yet.

    The problem is that Microsoft was not enforcing that tiny exception until now, so things that were running smoothly now pop odd dialogs to the end users about licensing and trials, which obviously is rigmarole to them.

    Any ideas?

    • I understand the confusion. I had to look into it as well, but as far I can understand and find in the documentation you should be able to use the on-premise connectivity gateway with a Bunisess Premium plan. Office 365 business is a different plan then the Office 365 Business Premium. The documentation clearly states that you can’t use the gateway only with business, E1 and F1.

      There is one limitation that might apply to your situation is that you can use the gateways only in the default environment. src:

      If you run into any limitation that is license related then the only option is to buy the Flow Plan 1 or 2. The E3 license won’t solve that issue for sure because it has the same limitations as the Business Premium plans when it comes to Flow and Power Apps.

  11. hi, thanks for this nice overview

    to make sure that I understand it, also Office 365 business premium supports e.g. outlook plug-in installation to allow synchronization with non-microsoft CRM tools?

  12. hi, thanks for this useful summary. I am a little shocked and disappointed that there is a limitation for Business Premium not being able to use add-on for CRM, weird decision as it makes the overall costs more expensive to anyone considering buying Dynamics CRM

    – therefore an excuse for the competitor CRM providers as I believe they allow their CRM add-ons to work with any version of Office

    • Hi Vincent,

      I double checked it with Microsoft. Documentation wasn’t really clear on this point, but I got an answer for you:

      Office Add-ins, ActiveX and BHO are supported in Office 365 Business Premium, but not supported in Office 365 Business and Office 365 Business Essentials.

      So I will change the article with the new information. Sorry for the inconvenience.

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