Microsoft 365 plans explained

A plain-English guide to Microsoft 365 business plans — what each one includes, who it suits, and how to choose the right one.

Microsoft 365 comes in several plans, each with a different price and set of features. Choosing the right plan means you get what your team needs without paying for things you will never use.

Quick summary

For most small businesses, Microsoft 365 Business Basic or Microsoft 365 Business Standard will be the right choice. Basic covers email, OneDrive, and web apps. Standard adds full desktop installs of Word, Excel, PowerPoint, and more. Larger or more regulated businesses may need the Business Premium plan for advanced security.

The main business plans

Microsoft offers four plans in its Business family, designed for organizations with up to 300 users. Here is how they compare:

Feature	Business Basic	Business Standard	Business Premium	Apps for business
Business email (Exchange Online)	Yes	Yes	Yes	No
Web versions of the Office apps	Yes	Yes	Yes	Yes
Desktop installs of the Office apps	No	Yes	Yes	Yes
OneDrive	Yes	Yes	Yes	Yes
Microsoft Teams	Yes	Yes	Yes	No
SharePoint	Yes	Yes	Yes	No
Advanced security features	No	No	Yes	No
Max users	300	300	300	300

Business Basic, Business Standard and Business Premium each include 1 TB of OneDrive storage per user. Microsoft's official name for the web apps is Microsoft 365 Apps for the web, and note the lowercase "business" in Microsoft 365 Apps for business.

Prices change — check the Microsoft website

Microsoft adjusts its pricing periodically. The table above shows which features are included, not the exact price. Always check the current pricing at Microsoft 365 pricing for business before committing.

Which plan is right for you?

Microsoft 365 Business Basic

Good for teams who mainly work in a browser and don't need to install Word or Excel on their computer. You still get a full business mailbox, OneDrive storage, Teams, and the web versions of the Office apps.

Best for: Businesses on a budget, teams who use tablets or Chromebooks, or people who only occasionally need Office apps.

Microsoft 365 Business Standard

A popular plan for small businesses. You get everything in Basic, plus full desktop versions of Word, Excel, PowerPoint, and Outlook. Microsoft allows five installs per user on PC or Mac.

Best for: Most small and medium businesses that use Office apps regularly.

Microsoft 365 Business Premium

Includes everything in Standard, plus extra security and device management. Business Premium is the Business plan that includes Microsoft Entra ID P1, which is what lets you use Conditional Access policies instead of security defaults.

Best for: Businesses in regulated industries (healthcare, finance, legal), or any team that wants the strongest security.

Microsoft 365 Apps for business

This plan includes the Office desktop apps and OneDrive, but no business email. It also leaves out Teams and SharePoint. It is useful if your team already has email elsewhere but wants to use Word, Excel, and PowerPoint.

Best for: Teams who have email through another provider but need the Office apps.

Enterprise plans (for larger organizations)

If your business has more than 300 users, or you need advanced compliance and IT management tools, Microsoft's own guidance is to look at its enterprise plans — Microsoft 365 E3 and E5, and the Office 365 E1, E3 and E5 line. We can help you navigate these — just ask.

Switching between plans

You can change to a different Microsoft 365 for business plan from the Microsoft 365 admin center, under Billing → Your products (or Subscriptions, if your admin center is in Simplified view). Most of the time Microsoft can do this automatically: all users on the old plan are moved across, and the old plan is cancelled for you.

The change usually finishes in a few minutes and can take up to an hour. Billing on the old plan stops and billing on the new one starts the day the change completes, and depending on the plan you may get a prorated credit.

Check what you will lose before moving to a smaller plan

Moving from Business Standard to Basic means the desktop versions of Word, Excel, and PowerPoint will stop working. Microsoft also warns that if you move to a plan with fewer data-related services, you have to back up anything you want to keep yourself — that move often has to be done manually rather than automatically. Make sure your team is ready before you switch.

Common questions

Can different team members be on different plans?

Yes. You assign a license (and therefore a plan) to each person individually. One colleague could be on Business Standard while another is on Basic. This is useful if some staff need the full desktop apps and others don't.

Is there a free trial?

Yes. Microsoft currently offers a free trial of about a month for new business subscriptions — its own pages describe it as both "30-day" and "one month". Trial tenants are limited to 300 GB of pooled storage.

A trial turns into a paid plan on its own

At the end of the trial your subscription renews as an annual subscription by default. If you don't want to carry on, turn off recurring billing in the admin center under Billing → Your products before the trial ends. Do that and the trial simply expires without a charge.

Can I pay monthly instead of annually?

Yes. When you buy or change a subscription, Microsoft asks you to choose a subscription length and a billing frequency, so a monthly and an annual option are both available for the main business plans. Monthly gives you more flexibility to add or remove licenses. For what each option actually costs, check Microsoft's current pricing — we don't quote third-party prices here because they change.

What happens if I have more than 300 users?

The Business family of plans is designed for organizations with up to 300 users, and Microsoft says it reserves the right to enforce that 300-licence limit across the whole Business family. Its guidance is that organizations above 300 users should look at the Microsoft 365 enterprise plans instead.

Need a hand?

If you're stuck, email support@chykalophia.com and we'll help. Include your website address and a screenshot if you can.