It’s easy to see why Office 365 is everyone’s favorite cloud platform. It’s loaded with dozens of cutting-edge cloud apps, and offers multiple benefits like predictable pricing, continuous updates, and remote access to apps.

But deciding whether you need it is just the first step. The real challenge is actually picking the right Office 365 plan, and there are a lot to choose from.

“Microsoft gives people waaaay too many choices.”

To help you with the decision-making process, we’ve created a quick summary of the plans designed for businesses.

Business vs. Enterprise

Office 365 offers two “service families” for organizations: Business and Enterprise. The former is tailored towards small- and medium-sized businesses, while the latter is built for companies with over 300 employees or organizations that must adhere to industry-specific regulations. Between those service families, you have to decide on Business Essentials, Business, Premium, Enterprise E1, E3, or E5.

Business Essentials

For small businesses that need only the basic set of Microsoft tools, Business Essentials is a great starting point. At $5 per user per month, you get a business-class email app, 1TB of OneDrive storage, Microsoft Teams, and web-only versions of Word, PowerPoint, and Excel.


If you want desktop versions of Office productivity apps and cloud storage capabilities, Office 365 Business is the way to go. The downside is it costs $8.25 per user per month and lacks some of the online services from Business Essentials like Microsoft Exchange, Teams, SharePoint, and Skype for Business.

Business Premium

Business Premium is $12.50 per user per month and combines all the tools from Business and Business Essentials. This plan also includes Outlook Customer Manager for keeping track of your client interactions, Microsoft Bookings for scheduling appointments, and Microsoft StaffHub for managing your employees.


Enterprise E1 costs $8 per user per month and, similar to Business Essentials, has OneDrive, Exchange, SharePoint, Microsoft Teams, and web versions of Office productivity apps. The difference is it has Enterprise-specific features like data management tools and comprehensive content search and discovery functions.


Enterprise E3 is the mid-tier option that comes with all the features of Enterprise E1 and desktop versions of Office productivity apps. It’s pricier at $20 per user per month, but you get more features for your money, including data loss prevention, legal hold, encryption, and identity and access management.


By upgrading to the top-tier Enterprise plan, you get to enjoy all the aforementioned features plus advanced threat protection. This service will set you back $35 per user per month, but it’s well worth it if you’re in an industry that’s governed by tight data regulations like healthcare or finance.

If you collect large volumes of data, Enterprise E5 even includes Power BI and Delve Analytics so you can gain valuable insights into your business and make informed strategies.

Decision time

Now that you have a basic understanding of each plan, it’s important to assess your needs and budget before making a final decision. Ask yourself what features are important to you and if you’re willing to pay a higher price for enterprise-level features like data loss prevention and analytics software.

We can also conduct a comprehensive IT assessment to figure out your needs and recommend the perfect plan for your business. Contact us today to schedule a consultation.

Red Key is a leading Managed IT firm that is bringing AI to companies in New York City, Westchester County, Fairfield County Connecticut, California & beyond.