There are various licensing models that Office 365 (Microsoft 365) offers from Business Basic to Enterprise. Depending on your business needs, choosing the right license can lead to optimization of costs and increase in productivity. In this article, we will go through the different licensing models/plans for Office 365. We will also mention efficient ways to migrate from local Exchange Server to Office 365.
How Licensing Works In Office 365?
Like any other online service, all operations and services of Office 365 is on the cloud. It doesn’t have a perpetual licensing and cost. Instead, it offers subscriptions based on the below payment methods:
- Yearly commitment with monthly payments.
- Yearly commitment with yearly payments.
The yearly commitment with yearly payments method is cheaper than the monthly payments method. Unlike traditional licensing and Exchange Server setup using the Capital Expenditure (CapEx), Office 365 is solely based on Operational Expenditure (OpEx) model, since all the services are on the cloud. So, there is no investment in infrastructure and hardware.
Different Licensing Models For Office 365
Below, we will be looking into the different licensing models for Office 365 – Frontline, Business, and Enterprise.
1. Office 365 Frontline (F) Model
As the name implies, this is the frontliners’ subscription, which is designed for frontline workers. This subscription offers essential communication, collaboration, and security tools. Compared to the other models, the frontline model is the least expensive one. It is commonly used in the following sectors.
- Retail: Store associates and shift managers.
- Manufacturing: Line workers and supervisors.
- Hospitality: Restaurant servers and coordinators.
The subscription includes functional mailbox, OneDrive, and other features with some restrictions and limitations, depending on the job. It is ideal for frontliners who do not need larger mailboxes and access to automation systems. The Frontline subscription is split between the F1 and F3 plans. These plans are mostly used for communication, scheduling, and lightweight collaboration work where the user wouldn’t have a full desktop or laptop and doesn’t require advanced email capabilities and large storage.
| Feature | F1 Plan | F3 Plan |
| Desktop Apps | None | None |
| Office Apps | Web Only | Web and Mobile Apps |
| Only Teams | 2 GB Mailbox | |
| OneDrive | 2 GB | 2 GB |
| Device Access | Mobile Only | Up to 5 Devices |
| Windows Access | None | Limited |
| Security Features | Basic Intune and Entra ID | Intune + Defender |
2. Office 365 Business (B) Model
This model is mostly used by small to medium-sized businesses and includes a bundle of tools, such as Word, Excel, PowerPoint, Outlook, and Teams, along with the use of cloud storage of OneDrive and SharePoint. In addition, it comes with the collaboration tools, such as co-authoring and file sharing. Other collaboration tools include Microsoft Teams, Bookings for scheduling, Planner for planning staff and projects, Forms for surveys, SharePoint sites, etc.
Usually, this is the model used for remote and hybrid staff members who use desktop or laptop with the need for full mailbox, OneDrive, and all the communication requirements.
There are three types of subscriptions – Business Basic, Business Standard, and Business Premium. These are commonly used as a starter for desk users for remote work, client communications, project collaboration, data storage, and webinars/customer engagement with the use of Microsoft Loop.
Both Business Basic and Standard are the same, except that the Standard has the Desktop version of the Office Apps (Word, Excel, PowerPoint, and Outlook), while the Business Premium offers more security, device management, and threat protection features.
Some limitations of this model are:
- Cap of 300 users per model. If a tenant has more than 300 users, they would need to switch to the Enterprise model.
- Limited Enterprise features, like analytics, compliance, and voice calling.
- This model is mostly for cloud-first solutions. If there is a need to integrate with on-premises servers, the Enterprise plans would suite better.
Here is a comparison of the three Business plans.
| Feature | Basic | Standard | Premium |
| Desktop Apps | Web Only | Full Desktop Apps | Full Desktop Apps |
| 50 GB / 75 GB Archive | 50 GB / 75 GB Archive | 50 GB / 75 GB Archive | |
| OneDrive | 1 TB / User | 1 TB / User | 1 TB / User |
| SharePoint | 1 TB (Total) | 1 TB (Total) | 1 TB (Total) |
| Device Access | Up to 5 Devices / User | Up to 5 Devices / User | Up to 5 Devices / User |
| Maximum Users | 300 | 300 | 300 |
| Security Features | Basic | Basic | Intune, Defender, Entra ID |
3. Office 365 Enterprise (E) Model
The Office Enterprise plans are designed for enterprises/companies keeping the scalability, security, and integration in mind. These licenses can coexist with any other license of Office 365 and bring a number of improvements and benefits.
The Enterprise E3 and E5 plans bring the same features as the Business plans when it comes to SharePoint and OneDrive, but offer 100 GB for the mailbox of the user, along with unlimited storage for the archive mailbox. The two plans come with the desktop apps, including all the Office applications, with the ability to be installed and utilized in a Remoted Desktop Services (RDS) scenario. The Enterprise E5 license also comes with the ability to have a cloud PABX telephone system to integrate Session Initiation Protocol (SIP) telephone lines with Microsoft Teams.
The E5 license also comes with the Cloud App Security, which is used to monitor and protect all the cloud-based applications of Microsoft and others, with the following:
- Detection of risky behavior.
- Prevention of data leaks through policies.
- Integration with identity and management tools.
- Monitoring of app usage.
The Enterprise models also focus on Enterprise Grade security and compliance. Advanced Threat protection is part of the Microsoft Defender and Entra ID. It also includes Data Loss Prevention (DLP) with eDiscovery and encryption of sensitive information. This also helps businesses to achieve global standards compliance, such as GDPR, HIPAA, and ISO. There is no limit on the number of licenses.
Takeaways And Conclusion
As you have seen, there are a number of Office 365 licenses to choose from. You can choose the right one, depending on the line of your business and other needs, such as security and integration. You can mix and match the licenses, depending on the needs and keeping the limitations in mind for the services needed. If you’re migrating from an Exchange Server on-premises to Office 365, you must ensure a seamless and smooth data migration so that the efforts and skills can be focused on security and protection of the data and users.
You can achieve this with the help of specialized Exchange migration tool, such as Stellar Migrator for Exchange. This tool offers any type of migration – from Exchange to Office 365 and vice versa, Exchange to Exchange, and Office 365 to Office 365 tenant. It can migrate primary mailboxes, user archives, and public folders with ease, while offering real-time monitoring, automatic mailbox matching, and delta (incremental) migration.