In this article, we’re going to look at the different flavors of M365, how to pick between them, and what value they provide to your business.

A correctly implemented Microsoft 365 is an enabler for your business, making it easy for your staff to work in teams and collaborate both internally and with external people in a secure manner. It also enables your employees to secure work from home/anywhere.

Apart from picking the right flavor of M365, the key to successful adoption is planning, end-user training, and ensuring your IT staff understands their new role.

Office 365

Microsoft has diminished its focus on Office 365 for quite a few years now and will continue to do so. For businesses smaller than 300 staff, it’s no longer an option, and for larger businesses, the recommendation is to look at Microsoft 365 plans (see below).

We’ll use the term SKU; it stands for Stock Keeping Unit and is a term that describes different licensing levels. Your first decision here is between Business and Enterprise SKUs. The former tops out at 300 users, so if you have a more significant business (or are expecting to grow), stick with the Enterprise flavors.

To clarify – Microsoft 365 Apps for Enterprise (what used to be called Office ProPlus) is the new name for desktop applications such as Word, Excel, etc., available for Windows and Mac – some SKUs include it, and some don’t.

On the other hand, all plans include Office Online (renamed just “Office” – not confusing at all), so Word, PowerPoint, etc., are running in a browser. Note that these online versions of Office are limited in functionality compared to their desktop brethren but are helpful for quick edits.

On the Enterprise side (which is only a name; it doesn’t have to be for a considerable business; for example, you could have five lawyers handling susceptible data in an SMB using Enterprise E5), there are Apps for enterprise that only give you Apps for enterprise and OneDrive file storage but no other cloud services.

E1 gives your Office (Online) and Exchange, OneDrive, SharePoint, Teams, Yammer, and Stream; E3 gives you Microsoft 365 Apps for enterprise in addition to E1’s cloud services, and E5 adds PowerBI as a cloud service, along with several security features.

Have a look at the official comparison, which clearly illustrates the differences between these plans.

Microsoft 365 and Office 365 Plan Options cover all the plans, including tailored versions for Education, Government, and country-specific flavors for China and Germany.

The most crucial point is that the different SKUs within each family aren’t mutually exclusive. In a small manufacturing business, you may have factory workers on Business Essentials, the office staff on Business, and the executives on Business Premium, and in a more significant business, users could be spread across E1, E3, and E5 licenses.

The Microsoft 365 and Office 365 platform service descriptions cover the platforms’ offerings in minute detail.

Microsoft 365

Building on top of the O365 plans above, M365 adds Windows 10 Enterprise, Endpoint Manager (Intune), and Azure Active Directory Premium.

For Business (up to 300 users), there are three options: M365 Business Basic, which gives you Office (online only), email, file sharing, Teams, and security features.

M365 Business Standard adds the desktop version of Office, “Microsoft 365 Apps for Business”, whereas M365 Business Premium adds iOS, Android, and Windows 10/11 device management and policy enforcement from Intune plus many advanced security features. See more here.

On the Enterprise side, there’s F3 (for “Frontline” workers, used to be called F1), which gives you Office (Online), Windows 10 Enterprise, Active Directory Premium P1, Azure Information Protection P1, and Intune on top of O365 E1.

E3 adds Active Directory Premium P1, Advanced Threat Analytics (ATA), Azure Information Protection P1, Windows 10 Enterprise, and Intune on top of O365 E3. Finally, E5 adds Active Directory Premium P2, Microsoft 365 Defender, Microsoft Defender for Endpoint, Microsoft Defender for Office 365, Microsoft Defender for Identity and Azure Information Protection P2, Windows 10 Enterprise, a host of security features and Intune on top of O365 E5.

It’s tempting to think, “I’m a small business, so I can save a few dollars with Business SKUs”, but you need to be aware of some limitations. Your OneDrive for Business is limited to 1TB per user in Business, whereas in Enterprise you can increase this with a support call.

Microsoft has made substantial changes to the Business Premium plan. It now includes all the features of Azure AD Premium Plan 1, so in addition to the security features already included (Conditional Access, self-service password reset, and MFA), this adds cloud app discovery, Azure AD Application Proxy, dynamic groups, and passwordless authentication.

There are a lot of valuable security features in the Enterprise plans, mainly M365 E5.

Be aware that you can move licenses between different SKUs (upgrade and downgrade) and upgrade Business SKUs to Enterprise SKUs.

This discussion has been around the total SKUs and what features they contain, but it’s also possible to purchase individual features such as just Azure Active Directory Premium P1 as a stand-alone feature, for instance. Depending on the needs of (some) of the users in your business, you can tailor an exact package with just the features they need.

A great way to understand all the different parts of M365, how they fit together, and a quick description of each service is the periodic table of Microsoft 365.

To properly protect your Microsoft 365 environment, use Hornetsecurity one-of-a-kind services:

To keep up with the latest Microsoft 365 articles and practices, visit our Hornetsecurity blog now.


The main takeaway from this article is not to assume that if you’re a small business, you should automatically opt for a Business SKU, investigate exactly what features will serve your business needs, and don’t be afraid to mix different SKUs for different worker roles.


What is the difference between Office 365 and Microsoft 365?

Difference between Office 365 and Microsoft 365:

Office 365: Focuses on cloud-based access to Microsoft Office apps and collaboration services.

Microsoft 365: Includes everything in Office 365 and adds Windows 10 integration, security features, and EMS.

Do I really need Microsoft 365?

Depends on your needs. If you mainly use Office apps and collaboration tools, Office 365 may be sufficient. If you need enhanced security, Windows 10 features, and device management, go for Microsoft 365.

What is Microsoft 365 best for?

Ideal for businesses and individuals needing a comprehensive solution. Combines productivity tools, collaboration services, and advanced security features for streamlined work and enhanced productivity.