Microsoft 365 licences for SMEs: are you paying too much?

by Geert | 3 December 2025, updated October 2026

Recently an organisation of barely twenty people called us. They had Microsoft 365 E3 licences. E3 is meant for large enterprises. What they needed was Business Premium: comparable capabilities for their situation, but considerably cheaper. The difference over a year? Thousands of euros, flushed away by a wrong purchase that once seemed "safe" to someone.

Conversations like that are no exception. Microsoft 365 licences are confusing, and Microsoft has no interest in simplifying them. In this article we put the five licences relevant to SMEs side by side, with prices, and we show the pitfall where most misconfigured tenants end up.

The five licences in a row

Licence	Price (approx.)	Core	For whom
Business Standard	~€10/user/month	Full Office + Teams + email, without advanced management or security	SMEs that need "just" Office and email
Business Premium	~€20/user/month	Standard plus Intune, Entra ID P1 (MFA, Conditional Access), Defender for Business, DLP	Most SMEs with permanent employees
F3 (Frontline)	~€7-8/user/month	Web and mobile apps, Teams, email, and surprisingly also Intune and Entra ID P1	Production, warehouse, shop staff, drivers
E3	~€36/user/month	Enterprise licence, comparable to Business Premium in apps, but with less built-in security	Organisations above 300 users
E5	>€50/user/month	Everything in E3 plus the full security and compliance suite, telephony, analytics, Security Copilot	Heavily regulated sectors, larger organisations

Prices are indicative and change regularly; treat them as an order of magnitude, not a quote. Microsoft meanwhile also announced that Security Copilot is now included in E5. Good to know, but for most SMEs that changes nothing about the calculation below.

Business Standard: the basics

What is in it? The full Office suite on desktop (Word, Excel, PowerPoint, Outlook), Teams, Exchange Online, OneDrive and SharePoint. Everything a small team needs to work professionally.

What is missing? Advanced security and device management. No Intune, no Conditional Access, no Defender. That is fine if you deliberately arrange those management and security functions elsewhere, or if you do not yet run business-critical processes in the cloud.

For whom? The small business or service provider that wants Office and email, without an in-house IT lead. Or the organisation that deliberately uses non-Microsoft solutions for management and security. Note: Business licences are limited to a maximum of 300 user accounts per tenant. That limit applies to all Business plans.

Business Premium: the default for most SMEs

Business Premium is Standard plus the layer that makes the difference between "we have Office" and "we have a managed, secured working environment":

• Microsoft Intune for central management of laptops, smartphones and tablets, with policies you push instead of configuring manually.
• Entra ID P1 with Multi-Factor Authentication and Conditional Access: policy that determines who gets access to what, under which circumstances.
• Microsoft Defender for Business for advanced protection against malware and attacks on your devices.
• DLP and basic information protection to prevent sensitive data leaking out unauthorised.

In short: enterprise-grade security at an SME price. You no longer need to buy separate antivirus or device management products. Per user, Premium is more expensive than Standard, but if you count the separate security products you would otherwise need, it is often the cheapest route to a secure environment.

F3: do not underestimate it

F3 is designed for employees who do not sit behind a computer all day: production, checkout, warehouse, healthcare, logistics. Only web and mobile apps, Teams, email, limited storage. But here lies a common miscalculation: F3 also includes Intune Plan 1 and Entra ID P1. So for these employees too you can enforce device policy, require MFA and apply Conditional Access.

The price is a fraction of Business Premium. For groups of employees who only need communication and simple documents, F3 is the only licence that makes sense. If you give all these users the same package, you pay monthly for features that never get clicked.

E3: the paradox that costs you money

Here it gets interesting, because this is where the conversation with that twenty-person organisation went wrong. E3 looks like Business Premium: full Office, cloud services, Intune, Entra ID P1. But the crucial difference lies in what is missing: Defender for Endpoint and the DLP baseline that Business Premium brings by default must be bought separately with E3, or arranged through an upgrade to E5.

So you pay more per user for less built-in security. That is not a smart move, it is a paradox you as a customer need to be aware of.

So why does E3 exist? One hard reason: the 300-user limit. Above 300 users Microsoft can technically block the purchase of Business Premium. E3 is the logical step for a growing organisation that outgrows the Business bracket. Below that limit there is almost no scenario in which E3 is the better choice for an SME.

E5: when is it worth it?

E5 adds to E3: the full security and compliance suite, Teams telephony, analytics and recently Security Copilot. It is the licence for organisations where compliance requirements are strict, reporting is mandatory, and threats are proactively hunted: finance, insurance, healthcare, government.

For an SME, E5 is rarely justifiable, unless you as a smaller player must meet very specific requirements. There is a smart middle road though: E5 licences only for those who really need them, for example your one security lead, and the rest on Business Premium or E3.

Smart combinations: the mix is the saving

Microsoft allows you to mix different licence types in one tenant. That is exactly where the savings sit:

• Frontline staff on F3. Identify who does not work at a desk continuously and give those roles F3 instead of Premium.
• Above 300 users: keep the first group on Business Premium and give new employees E3, optionally supplemented with separate Defender add-ons where needed.
• Critical roles on E5, the rest not. Only if the strict requirements are genuinely role-bound.
• Scale up and down monthly. Through a Cloud Solution Provider model you pay per month per user. Start small and adjust as you grow.

Keeping that mix right requires insight, and someone who tracks the changes in Microsoft's offering. Prices and bundles shift regularly; what is right today may look different next month.

How Dunetrails helps

We follow the licence landscape, analyse which licence fits which group of users in your organisation, and proactively raise it when there is money to save or when a limit (such as the 300-user cap) approaches. No tool selling: if your current mix is right, we simply say so.

Want to know whether your organisation has overpaying licences? We see that in a read-only analysis of your tenant, part of our Microsoft 365 Security Audit. Your production keeps running, you get facts.

Or first test for free whether your email domain can be spoofed: the email scan takes 2 seconds.