Microsoft 365 Basic vs Standard vs Premium vs E3: Security

A 25-person engineering firm in Ottawa is renewing its Microsoft 365 licences. The IT provider suggests moving from Business Standard to Business Premium, for about ten dollars more per user each month. The managing partner pushes back: Word, Outlook and Teams already work fine. So what would the extra money actually buy?

Almost entirely one thing: security. For day-to-day productivity, Standard and Premium are nearly identical. For protecting accounts, devices and email, the gap is wide. And once you pass 300 users, the conversation changes, because Microsoft 365 E3 enters the picture.

What every plan has in common

Even the cheapest plan isn't defenceless. All four include MFA for work accounts, Exchange Online Protection spam and malware filtering, Microsoft Purview Audit (Standard) and Secure Score, which measures your tenant's security posture.

Microsoft also provides security defaults at no cost: mandatory MFA, blocked legacy authentication and protection for administrative actions. That's the bare minimum to switch on in Basic or Standard. If you're still deciding how people should authenticate, our guide to choosing phishing-resistant MFA compares the options.

Data location doesn't depend on the plan either. For a tenant signed up in Canada, Microsoft commits to storing certain data at rest in the country, including mailbox content.

Basic and Standard: productivity first

According to Microsoft's own comparison table, Basic and Standard have exactly the same security features. What separates them is the desktop apps, Clipchamp, Loop and webinars. Picking Standard over Basic does nothing for your protection.

Their limits are clear. With the free version of Entra ID, there's no Conditional Access: you can't require a managed device or block a sign-in based on context. Security defaults apply to everyone, with no exceptions. Device management is limited to Basic Mobility and Security, a free mobile device management tool. And no endpoint protection is included.

You can close part of that gap: Microsoft sells Defender for Business on its own for CA$4.10 per user per month on an annual commitment, for organizations with up to 300 users.

Business Premium: the security upgrade

Premium adds four building blocks that change the picture.

• Entra ID P1 unlocks Conditional Access: require a compliant computer to open company files, block sign-ins from outside the country, apply stricter rules to admins.
• Intune Plan 1 manages Windows and macOS computers as well as phones, and checks their compliance.
• Defender for Business protects endpoints with detection and response (EDR), automated investigation and remediation, and vulnerability management.
• Defender for Office 365 Plan 1 adds Safe Links, Safe Attachments and impersonation protection, which helps against business email compromise.

On top of that you get sensitivity labels and data loss prevention (DLP) for email and files, plus a 1.5 TB archive per user. For a team of 25 on an annual commitment with Teams, the difference over Standard comes to CA$270 a month.

The real trap lies elsewhere: none of these features protect anything until someone configures them.

Microsoft 365 E3: beyond 300 seats

Business plans are capped at 300 licences across the whole family. E3 has no user limit and includes Windows 11 Enterprise E3, Intune Plan 1 and Entra ID P1. Since July 1, 2026, it also includes Defender for Office 365 Plan 1.

Watch the endpoint side, though. E3 comes with Defender for Endpoint Plan 1, which provides next-generation antivirus and attack surface reduction, but not EDR or automated investigation, according to Microsoft's comparison table. Under 300 users, Business Premium therefore gives you more complete endpoint protection for CA$23.10 less per user per month.

With or without Teams

In Canada, Microsoft sells each plan with or without Teams, and the version without Teams costs less. According to Microsoft, Premium without Teams keeps Entra ID, Intune and Defender. That version can make sense if your company already relies on another video conferencing tool.

How to choose

Work through these questions in order:

1. How many users will you have in three years? If you'll pass 300, plan for E3, plus a separate EDR solution.
2. Do you handle personal or financial information? An accounting firm, a clinic or a payroll company has every reason to aim for Premium, at least for its most exposed staff.
3. Do people work remotely or on personal devices? Then Conditional Access and Intune become essential.
4. Is the budget tight? Standard, security defaults and Defender for Business make a reasonable floor until you can move to Premium.

Whichever plan you pick, the licence is only the starting point. Our Microsoft 365 security audit guide lists the settings to check, and our Microsoft 365 and Google Workspace audit measures the gap between what you pay for and what's actually turned on.