M3
M365 Licensing

Office 365 E3 vs Business Premium

45 shared features. 61 M365 Premium exclusives.

O365 E3 $23/mo M365 Premium $22/mo +$-1/mo delta

Last updated 2026-02-15

O365 E3

Office 365 Enterprise E3

$23/mo

45 features included

Core productivity + baseline security

Conditional Access, Defender P1

View full feature list →
+$-1/mo

M365 Premium

Microsoft 365 Business Premium

$22/mo

106 features included

Everything in O365 E3 + advanced security

Defender P2, advanced compliance, Phone System

View full feature list →

Overview

Office 365 E3 and Microsoft 365 Business Premium sit at nearly identical price points—$23 versus $22 per user per month—but serve fundamentally different audiences. Office 365 E3 is a productivity-first enterprise plan with no user cap, built for large organizations that handle security and device management through separate licensing. Business Premium is an all-in-one SMB plan capped at 300 users that bundles productivity, advanced security, and device management into a single SKU.

The biggest differentiator is security. Business Premium includes Microsoft Defender for Business, Intune device management, and Conditional Access—features that Office 365 E3 simply does not include. E3 counters with enterprise compliance tools, unlimited archiving, and no user ceiling, making it the default for organizations over 300 seats or those that already license security through Microsoft 365 E3/E5.

For organizations under 300 users choosing between these two plans, the question is whether you need enterprise-grade compliance tooling (E3) or integrated endpoint security and device management (Business Premium). Most SMBs get more practical value from Business Premium at a lower price.

Breakdown by Category

CategorySharedM365 Premium OnlyTotal
Devices02424
Identity12324
Security189
Productivity17320
Compliance7310
Collaboration19019

Feature Comparison

61 features
FeatureO365 E3
$23
M365 Premium
$22
Automated Investigation and Response PRD
—✓
Defender for Office 365 Plan 1 SEC
—✓
Anti-Phishing PRD
—✓
Real-Time Reports PRD
—✓
Safe Attachments SEC
—✓
Safe Links SEC
—✓
Azure Active Directory Premium Plan 1 IDN
—✓
Administrative Units IDN
—✓
Application Proxy IDN
—✓
Azure AD Connect Health IDN
—✓
Azure AD Reports IDN
—✓
Azure Multi-Factor Authentication (MFA) IDN
—✓
Cloud App Discovery IDN
—✓
Conditional Access IDN
—✓
Dynamic Groups IDN
—✓
Enterprise State Roaming IDN
—✓
External Identities IDN
—✓
Microsoft Identity Manager IDN
—✓
Password Protection IDN
—✓
Self-Service Group Management IDN
—✓
Self-Service Password Reset in AD IDN
—✓
Shared Account Password Roll-Over IDN
—✓
Single-Sign-On to other SaaS IDN
—✓
SMS Sign-In IDN
—✓
Temporary Access Pass IDN
—✓
Terms of Use CMP
—✓
3rd Party MFA Integration IDN
—✓
Endpoint Analytics DEV
—✓
Information Protection CMP
—✓
Intune DEV
—✓
Application Control DEV
—✓
Application Guard DEV
—✓
AppLocker DEV
—MDM
Assigned Access DEV
—✓
Azure AD Join IDN
—✓
BitLocker DEV
—✓
BitLocker to Go DEV
—✓
Cortana DEV
—✓
Automated Investigation and Response DEV
—✓
Endpoint Detection and Response (EDR) SEC
—✓
Threat Analytics SEC
—✓
Vulnerability Management (core) DEV
—✓
Block at First Sight DEV
—✓
Enhanced ASR DEV
—✓
Tamper Protection SEC
—✓
Web Content Filtering DEV
—✓
Domain Join DEV
—✓
Edge for Business DEV
—✓
Manage by MDM DEV
—✓
Microsoft Defender Antivirus SEC
—✓
Microsoft Store for Business DEV
—✓
Unbranded Boot DEV
—✓
Universal Print DEV
—✓
Voice, Pen, Touch, Ink, and Gesture DEV
—✓
Windows Autopilot DEV
—✓
Windows Conditional Access IDN
—✓
Windows Firewall SEC
—✓
Windows Hello for Business IDN
—✓
Windows Information Protection (retiring) CMP
—✓
Windows Update for Business DEV
—✓
Windows 11 Support Period DEV
—24 months

Who Should Choose O365 E3?

Office 365 E3 is the right choice for organizations over 300 users who need unlimited seats, or for enterprises that already license security and device management separately (e.g., through Microsoft 365 E3 or E5). E3 also fits organizations needing enterprise compliance features like unlimited archiving, eDiscovery, and Data Loss Prevention policies that Business Premium does not include. If your IT team manages security through a dedicated stack and you need a pure productivity suite at scale, E3 delivers.

Who Should Choose M365 Premium?

Microsoft 365 Business Premium is built for organizations under 300 users that want security and productivity in a single license. At $22/user/month—$1 less than E3—you get everything in Business Standard plus Microsoft Defender for Business (endpoint protection), Intune (device management), Conditional Access, and Azure Information Protection. If you are an SMB without a dedicated security stack, Business Premium eliminates the need to buy and manage separate security licenses.

Cost Analysis

O365 E3 monthly

$23

M365 Premium monthly

$22

Monthly delta

+$-1

Annual delta (per user)

+$-12

The Verdict

For SMBs under 300 users, Business Premium delivers better value at $22/user/month by bundling endpoint security and device management that would cost significantly more as add-ons to E3. For enterprises over 300 users or those needing advanced compliance, Office 365 E3 at $23/user/month provides the unlimited scale and compliance tooling that Business Premium cannot match.

Frequently Asked Questions

What is the difference between Office 365 E3 and Microsoft 365 Business Premium?
Office 365 E3 is an enterprise productivity suite ($23/user/month) with no user limit, focused on Office apps, Exchange, SharePoint, Teams, and enterprise compliance features like eDiscovery and unlimited archiving. Microsoft 365 Business Premium ($22/user/month) is capped at 300 users but bundles productivity apps with advanced security features including Microsoft Defender for Business, Intune device management, and Conditional Access.
Which plan is cheaper, Office 365 E3 or Business Premium?
Microsoft 365 Business Premium is $1/user/month cheaper at $22 versus $23 for Office 365 E3. Despite the lower price, Business Premium includes security and device management features that E3 lacks. However, E3 includes enterprise compliance tools and has no user cap, so the total cost depends on your organization size and what additional licenses you would need alongside each plan.
Does Business Premium include everything in Office 365 E3?
No. Business Premium includes the core Office apps, Exchange, SharePoint, and Teams, but it does not include several enterprise compliance features available in E3 such as unlimited archiving, advanced eDiscovery, and some Data Loss Prevention capabilities. Business Premium adds security features that E3 lacks, like Defender for Business and Intune, so neither plan is a strict superset of the other.
Can I use Business Premium for more than 300 users?
No. Microsoft 365 Business plans are capped at 300 users per tenant. If your organization exceeds 300 users, you must use enterprise plans like Office 365 E3, Microsoft 365 E3, or Microsoft 365 E5. There is no workaround for this limit.
Does Office 365 E3 include endpoint security?
No. Office 365 E3 is a productivity suite and does not include endpoint security features like Microsoft Defender for Business or Intune device management. To get these capabilities with E3, you would need to upgrade to Microsoft 365 E3 (which adds Windows, Intune, and security features) or purchase security add-ons separately.
Should I choose Business Premium or upgrade to Microsoft 365 E3 instead?
If you are under 300 users and your primary need is bundled security plus productivity, Business Premium at $22/user/month is the most cost-effective option. Microsoft 365 E3 at $36/user/month adds Windows 11 Enterprise, more advanced compliance tools, and removes the 300-user cap. Choose M365 E3 over Business Premium if you need Windows licensing, enterprise compliance, or expect to grow beyond 300 users.

Explore More

Office 365 Enterprise E3

Full feature breakdown

Microsoft 365 Business Premium

Full feature breakdown

Full Comparison Matrix

Compare all 21 plans side-by-side