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 is the most affordable and 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 specifically for businesses with fewer than 300 users. Here is how they compare:
| Feature | Business Basic | Business Standard | Business Premium | Apps for Business |
|---|---|---|---|---|
| Business email (Outlook) | Yes | Yes | Yes | No |
| Web versions of Office apps | Yes | Yes | Yes | Yes |
| Desktop installs of Office apps | No | Yes | Yes | Yes |
| OneDrive (1 TB per user) | Yes | Yes | Yes | Yes |
| Microsoft Teams | Yes | Yes | Yes | No |
| SharePoint | Yes | Yes | Yes | Yes |
| Advanced security features | No | No | Yes | No |
| Max users | 300 | 300 | 300 | 300 |
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.com/en-us/microsoft-365/business/compare-all-plans 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 full Outlook email, OneDrive storage, Teams, and the online versions of all 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
The most popular plan for small businesses. You get everything in Basic, plus you can install Word, Excel, PowerPoint, and Outlook as full desktop applications on up to five devices per user.
Best for: Most small and medium businesses that use Office apps regularly.
Microsoft 365 Business Premium
Includes everything in Standard, plus advanced security and device management tools. These are designed for businesses that handle sensitive data or need tighter control over company devices.
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 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 also offers Microsoft 365 E3 and E5 enterprise plans. These are sold differently (often through volume licensing or a Microsoft partner). We can help you navigate these — just ask.
Switching between plans
You can upgrade or downgrade your plan at any time from the Microsoft 365 admin center. Upgrading takes effect immediately. Downgrading usually takes effect at your next billing date.
Check what you will lose before downgrading
Downgrading from Business Standard to Basic means the desktop versions of Word, Excel, and PowerPoint will stop working. Make sure your team is ready for that change before you switch.
Common questions
Related guides
- What is Microsoft 365?
- Microsoft 365 billing explained
- The Microsoft 365 admin center, explained
- Adding a user in Microsoft 365
- Google Workspace vs Microsoft 365: pricing compared
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