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

One of the most asked questions, what is the difference between Office 365 Business Premium and 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 Premium good enough for your organisation?

It’s good to know that you can buy 300 Business licenses and then continue with Enterprise licenses. So the seat cap of 300 users doesn’t limit you in the total amount of users within your tenant. If Business Premium is good enough for your organisation you can start with 300 business premium 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 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 Premium and E3

If we look at the details of both plans, then you won’t find really big differences between the two at first glance. Except for the price difference of course. But if we dive deeper into the details you will see that there are some difference. Some are small and won’t be an issue, other could be on the long term.


A big difference between the two plans is the price and the commitment. You can only subscribe for 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.

Now the price difference is obvious, for a yearly commitment an Enterprise E3 license will cost you $ 20.- and a Business Premium 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 Premium 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 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 Addon for Business Premium. 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 Office 365 Business licenses.

It’s not only a license limitation but activating a Business Premium 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 Premium users can only use the Online services.

Group Policies

Larger organisations use Group Policies to control (office)application within a domain. This is only supported with 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 Ligitation 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 Premium 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.

Affiliate Disclaimer – if you sign up for Office 365 using my affiliate link I may receive a small compensation from Microsoft at no expense to you. Your support helps running this website and I genuinely appreciate it. I always try to make my reviews, articles and how-to’s, unbiased, complete and based on my own expierence. If you don’t want to use it, here’s a non-affiliate link to Microsoft.

Business vs E3 Comparison Chart

Business PremiumE3
Core Details
Price user/month (annual commitment)$ 12.50$ 20.00
Price user/month (monthly commitment)$ 15.00$ 20.00
Seat Cap300Unlimited
24/7 Phone supportOnly CriticalAll issues
Desktop version of Word, PowerPoint, Excel, Outlook, OneNote, Publisher
Web version of Word, Excel, PowerPoint, Outlook, OneNote
Office apps on tablets and phones
Standard Services
1TB cloud storage (OneDrive for Business)
Unlimited cloud storage (OneDrive for Business)
Email, Calendar (Exchange)
Communication and team sites (SharePoint)
Team hub (Teams)
Enterprise Social (Yammer)
Content discovery and search (Delve)
Manage tasks and teamworks (Planner)
Manage your business better (Invoicing, Bookings, MileIQ, Business center)
Manage customers (Connections, Listings, Outlook Customer Manager)
Advanced Services
Active Directory integration
Mobile Device Management (MDM) for Office 365
Licensed for hybrid deployment
Support for shared computer activation
Video content management
Compliance – Archiving, eDiscovery, hold
Information protection – message encryption, RMS, DLP
Enhanced Services
Advanced eDiscovery, secure attachments and URLs and access controls
End-user and organizational analytics (MyAnalytics & Power BI)
Exchange Online Advanced Threat Protection
Office 365 Cloud App Security
PSTN conferencing to dial into Skype meetings from anywhere
Advanced Data Governance
Advanced security with Advanced Threat Protection and Customer Lockbox
PSTN Calling (with Microsoft Phone System add-on)
More InfoMore Info
& Prices
More Info
& Prices

* MyAnalytics will be available for every business and enterprise plan with hosted exchange. Rolling out in January 2019


If we take all the details into account I recommend Business Premium 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 Office 365 Business Premium vs E3 comparison helpt you with selecting the right license for your organisation. If you have any question, just drop a comment below.

Sources: Office 365 Platform Description

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16 thoughts on “Office 365 Business Premium vs E3 – in-depth comparison with overview chart”

  1. 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.

  2. 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.

  3. 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?

  4. 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

  5. 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.

  6. 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?

  7. 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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