Business Premium vs E3
Choose the Right Microsoft 365 Plan for Your Users
Microsoft 365 Business Premium and Microsoft 365 E3 both combine productivity, collaboration, identity, device management, and security capabilities. The right choice depends on your organization’s size, user requirements, security and compliance needs, and how your Microsoft environment is structured.
Business Premium vs E3: what’s the difference?
Business Premium and E3 overlap in many of the capabilities organizations use every day, including Microsoft 365 applications, email, collaboration, identity management, and endpoint management.
The biggest difference is how the plans are positioned.
Business Premium: is designed for organizations with up to 300 users and combines Microsoft productivity tools with a strong set of security and device-management capabilities.
Microsoft 365 E3: is an enterprise plan designed to support organizations of any size, with additional enterprise capabilities across Windows, security, compliance, administration, and cloud storage.
Business Premium vs E3 feature comparison
Microsoft currently includes Entra ID Plan 1 and Intune Plan 1 with Business Premium, along with Defender for Business, Defender for Office 365 Plan 1, Purview capabilities, eDiscovery, and legal hold.
Microsoft 365 E3 supports organizations of any size and includes enterprise productivity, Windows Enterprise, identity, endpoint management, security, and compliance capabilities.
Because Microsoft regularly changes packaging and plan entitlements, exact feature requirements should be confirmed against current Microsoft licensing information before making a purchasing decision.
| Capability | Microsoft 365 Business Premium | Microsoft 365 E3 |
|---|---|---|
| Microsoft 365 desktop, web, and mobile apps | ✓ | ✓ |
| Exchange, SharePoint and OneDrive | ✓ | ✓ |
| Microsoft Teams | Available depending on plan configuration | Available depending on plan configuration |
| Microsoft Entra ID | Plan 1 | Plan 1 |
| Microsoft Intune | Plan 1 | Included |
| Endpoint security | Microsoft Defender for Business | Microsoft enterprise security capabilities |
| Email protection | Defender for Office 365 Plan 1 | Included security capabilities vary by current E3 packaging |
| Microsoft Purview | Information protection, DLP and compliance capabilities | Broader enterprise data security and compliance capabilities |
| Windows | Business-focused Windows capabilities | Windows Enterprise |
| User scale | Business plans limited to 300 seats total per tenant | Supports organizations of any size |
| Best fit | Organizations or user groups that fit within Business-plan limits and need integrated productivity and security | Enterprise environments requiring greater scale and enterprise-level management |
What does the 300-user limit mean for Business Premium?
Microsoft 365 Business plans are designed for organizations with up to 300 users.
Importantly, the limit applies to the Business family of plans combined within the tenant, including Business Basic, Business Standard, and Business Premium.
For example, an organization with 250 Business Premium licenses could provision only 50 additional Business-family licenses before reaching that limit. Microsoft recommends enterprise plans for organizations exceeding 300 Business-plan users.
This does not necessarily mean every organization approaching 300 users should immediately move everyone to E3. It means the licensing strategy needs to account for future headcount, user requirements, and which plans are appropriate for different roles.
When should you choose Microsoft 365 Business Premium?
Business Premium may be a strong fit when:
Your Business-plan users remain within Microsoft’s 300-seat tenant limit
Users need Microsoft 365 productivity and collaboration applications
You need Microsoft Entra ID Plan 1
You need Microsoft Intune Plan 1 for device management
Defender for Business meets your endpoint-security requirements
Defender for Office 365 Plan 1 meets your email-security requirements
The included Microsoft Purview capabilities meet your data-protection and compliance needs
You do not require the additional enterprise capabilities of E3
Business Premium includes a substantial security stack, so I would not position it simply as the less secure option. Microsoft currently includes Defender for Business, Defender for Office 365 Plan 1, Intune Plan 1, Entra ID Plan 1, Purview, eDiscovery, and legal hold.
Yes. Microsoft allows Business Premium to be combined with other Microsoft subscription offerings, so an organization does not necessarily need to move every user to E3 at once.
A mixed licensing approach can make sense when different user groups have different requirements.
For example:
Can you mix Business Premium and E3 licenses?
Users whose productivity, endpoint management, identity, and security requirements are already covered by Business Premium.
Users suited to Business Premium
Users who require enterprise capabilities, different Windows licensing, broader governance, or other requirements that justify E3.
The goal should be deliberate role-based licensing rather than allowing different SKUs to accumulate without a clear strategy.
Users suited to E3
How should multi-entity organizations approach Business Premium vs E3?
For an enterprise operating across subsidiaries, acquisitions, or multiple tenants, Business Premium vs E3 is rarely one organization-wide decision.
Different entities may have different:
Headcounts
User profiles
Security requirements
Compliance requirements
Microsoft agreements
Tenant structures
Growth plans
A smaller subsidiary may have requirements that fit Business Premium, while another part of the organization may require E3.
The important point is to evaluate licensing by requirement, rather than assuming that every entity in a corporate group needs the same plan.
Consider tenant strategy separately from licensing
Do not create or preserve separate tenants simply to take advantage of Business-plan seat limits.
Tenant architecture should first reflect security, governance, administration, M&A strategy, data requirements, and operational needs. Licensing should then be optimized within that architecture.
That is a more appropriate enterprise recommendation than treating separate Business Premium tenants as a licensing workaround.
What happens when your organization grows beyond Business Premium?
Reaching or approaching the Business-plan limit is a signal to reassess the environment, not necessarily to perform an immediate organization-wide migration.
Review:
Expected user growth
Which users currently have Business licenses
Which users actually require enterprise capabilities
Existing tenant structure
Security and compliance requirements
Microsoft agreement and renewal timing
You may ultimately use a combination of Business Premium and enterprise plans while transitioning the organization toward the licensing architecture that best supports its long-term requirements.
Business Premium or E3: which is right for your organization?
There is no universal winner.
Business Premium can provide strong productivity, identity, device management, security, and data-protection capabilities for organizations and user populations that fit within Microsoft’s Business-plan requirements.
E3 is designed for enterprise scale and becomes more appropriate when your organization needs broader enterprise capabilities, greater scale, or a more standardized enterprise licensing model.
Need to compare enterprise plans? See Microsoft 365 E3 vs E5
Ready to right-size your Microsoft 365 plans?
Tell us about your users, current Microsoft licenses, and how your organization is structured. ADNM can help determine where Business Premium, E3, or another Microsoft 365 option better aligns with your requirements.