Microsoft 365 Business vs Enterprise: Which Plan Does Your Business Need?
Microsoft 365 has a lot of plans. Business Basic, Business Standard, Business Premium, E3, E5. For Australian SMBs, picking the right plan is important because the cost difference between a plan that’s too cheap and one that fits is often less than you’d expect, but the cost difference between one you need and one you don’t have can be substantial.
The conventional wisdom is simple: small businesses use Business plans, large enterprises use Enterprise (E3/E5) plans. In 2026, that’s not actually accurate anymore. Some small businesses genuinely need E3. Some larger businesses are better off with Business Premium. It depends on what you’re actually doing.
The Plans at a Glance
Business Basic: AUD $8–9/user/month. Email, Office online (cloud only), basic Teams.
Business Standard: AUD $12–14/user/month. Everything in Basic plus desktop Office apps, advanced Teams features.
Business Premium: AUD $20–22/user/month. Everything in Standard plus advanced security, basic compliance.
Enterprise E3: AUD $25–28/user/month. Desktop Office, Teams, advanced security, compliance, advanced Exchange.
Enterprise E5: AUD $45–50/user/month. Everything in E3 plus advanced analytics, eDiscovery, advanced threat protection.
Business Basic: Email and Cloud Office Only
This is the entry-level plan. You get email, Office apps in browser, 1TB cloud storage per user, basic Teams, and basic task management.
Who this is for: Businesses that don’t need desktop Office. Mostly email and cloud documents.
Why you wouldn’t: No desktop Office. Your team can’t use Word, Excel, or PowerPoint offline. They’re always in browser.
Business Standard: Desktop Office Included
This adds desktop Office apps (Word, Excel, PowerPoint, OneNote, Access, Publisher for Windows), advanced Teams features, and advanced Outlook features.
Who this is for: Most small businesses. Especially if your team uses Office documents regularly or works hybrid/remote.
Why you’d upgrade to Premium: You need security features that Business Standard doesn’t include (MFA enforcement, Conditional Access, Insider Risk, Defender for Office 365).
Business Premium: Advanced Security and Basic Compliance
This adds: Defender for Office 365, device management (Intune), Conditional Access, threat intelligence, basic Data Loss Prevention (DLP), audit logs, eDiscovery, MFA enforcement, and more.
Who this is for: Australian SMBs with compliance requirements. Especially if you handle customer data (Privacy Act compliance), financial data, or health information.
Cost-benefit: AUD $20–22/month per user. For a 20-person team, that’s AUD $400–440/month. Compared to Business Standard, you’re paying an extra AUD $160–200/month for comprehensive security. If you ever get phished or have a security incident, that investment pays for itself many times over.
Why you wouldn’t: You genuinely don’t care about advanced security and compliance. (But you should.)
Enterprise E3: Full Enterprise Features, Advanced Compliance
This is a big step up from Business. You get: advanced eDiscovery, advanced Compliance Manager, Information Protection (Advanced DLP, encryption, labeling), Advanced Threat Analytics, Customer Lockbox, advanced reporting, unlimited archiving, and advanced hold and retention policies.
Who this is for: Larger businesses, regulated industries (finance, healthcare, law), or businesses with serious compliance or legal hold requirements.
Why you’d upgrade to E3: You’re in a regulated industry and compliance is a real requirement. Or you’re large enough that internal investigations, legal holds, and data retention are regular activities.
Pricing: E3 is typically more expensive than Business Premium at face value, but with enterprise discounts it often becomes cheaper per user. For a 200-person company, enterprise licensing might be significantly cheaper than Business plans.
Enterprise E5: Full Enterprise with Advanced Security and AI
E5 adds: Defender for Endpoint, Defender for Identity, Insider Risk Management, Advanced Audit Log, Privileged Access Management, attack simulation, and advanced analytics.
Why you’d use it: You need comprehensive threat detection across endpoints, email, identity, and insider threats. Or you’re a large organisation that needs to detect and respond to serious security incidents.
Why most SMBs wouldn’t: Cost. E5 is expensive (AUD $45–50/user/month). For a 20-person team, that’s AUD $900–1,000/month. Unless you’re in a high-risk industry (finance, healthcare, critical infrastructure), that’s hard to justify.
What’s Actually Included by Security Tier
MFA: Included from Business Premium up. Not in Basic or Standard.
Defender for Office 365: Business Premium and above.
Device Management (Intune): Business Premium and above.
Conditional Access: Business Premium and above.
Data Loss Prevention (DLP): Basic version in Business Premium. Advanced version in E3.
Defender for Endpoint: E5 only.
Insider Risk Management: E5 only.
Compliance and Australian Regulatory Requirements
If you’re subject to Australian Privacy Act compliance, or you work in healthcare, finance, or aged care, your plan choice matters.
Australian Privacy Act compliance: You need at least Business Premium for MFA, audit logging, and basic DLP. E3 gives you better audit logs and advanced DLP. Most SMBs are fine with Premium for Privacy Act work.
Healthcare: Business Premium is a floor. Realistically, E3 or higher if you’re handling sensitive health data.
Financial services: Depends on what you do. Stockbroker? E5. Accounting firm? Business Premium to E3. Small advisory business? Business Premium might be enough.
Common Mistakes in Plan Selection
Buying too cheap (Business Basic or Standard) and regretting it. Most SMBs end up upgrading within 6 months because they realise they need MFA, audit logs, or better email protection. Start with Business Premium and save the pain.
Buying too expensive (E5) without needing it. If you’re a 15-person consulting firm, E5 is wasteful. Business Premium or E3 is better.
Not thinking about security during plan selection. Plan choice is partly a security decision. Business Premium has features (MFA, Defender) that Business Standard doesn’t.
Assuming all users need the same plan. You can use different plans for different users. Your accountant might need E3. Your receptionist might be fine with Business Standard.
What to Do Now
If you’re on Business Basic or Standard: Evaluate whether you need Business Premium. If you care about security or compliance, upgrade. It’s usually worth it.
If you’re on Business Premium: This is a good place for most SMBs. Consider E3 only if you’re in a regulated industry with heavy compliance requirements.
Related reading: security considerations | cloud adoption
If you’re on E3 or E5: Review whether you actually need these features. If you’re a small business on E5, you might save significant money by moving to Business Premium and buying specific add-ons you need.
Next Steps
Don’t just accept the plan your current vendor put you on. Review your current usage, your compliance requirements, and your security needs. You might be overpaying, or you might be underpaying and not getting features you need.
