Microsoft 365 for businesses, the complete guide (2026)
By Michal Lampe Sørensen · 8 min read · 1 May 2026
Last updated: 7 May 2026
Contents
TL;DR
Microsoft 365 has 3 tracks: Business (up to 300 users, $7-22/mo), Enterprise (unlimited, $39-99/mo) and Frontline ($3-10/mo). Business Premium ($22) is the best choice for most SMBs. E3 ($39) for 300+ users. E7 ($99) for AI-first enterprise. Prices increase July 1, 2026.
3 tracks: Business, Enterprise and Frontline
I get this question every single day: "Which Microsoft 365 plan should we get?" The answer starts with understanding the three tracks:
- •Business (Basic, Standard, Premium), for organizations up to 300 users. From $7 to $22/user/mo
- •Enterprise (E3, E5, E7), no user limit, advanced security and compliance. From $39 to $99/user/mo
- •Frontline (F1, F3), for retail, warehouse and production workers. From $3 to $10/user/mo
Key question: Do you have over 300 users? Then it's Enterprise. Under 300? Business is almost always right, unless you have specific compliance requirements.
Most customers we serve use one plan for everyone, but the smart ones use mix-and-match. 20 office workers on Premium + 50 frontline on F3 saves thousands per month.
Business plans: Basic, Standard and Premium
Business Basic ($6 → $7/mo from July 2026) Web apps only (Word, Excel in browser), Teams, 50 GB mail, 1 TB OneDrive. The cheapest plan. Only for those who exclusively use email and Teams.
Business Standard ($12.50 → $14/mo from July 2026) Everything in Basic plus full desktop Office apps (installed on PC/Mac). The starting point for most. If anyone uses Excel macros, PowerPoint or Outlook offline, Standard is the minimum.
Business Premium ($22/mo, unchanged after July 2026) Everything in Standard plus Intune device management, Defender for Business and Conditional Access. The security plan.
I recommend Premium for most businesses with 10-300 employees. The difference to Standard is $8/mo, cheaper than buying Intune + Defender separately. And the price does NOT increase in July 2026.
Enterprise plans: E3, E5 and E7
Microsoft 365 E3 ($36 → $39/mo from July 2026) Everything in Business Premium plus Windows Enterprise, unlimited users, 100 GB mailbox and eDiscovery Standard. From July 2026 also adds selected Intune Suite features (Remote Help, Advanced Analytics, Intune Plan 2) and Defender for Office 365 P1. The enterprise standard.
Microsoft 365 E5 ($57 → $60/mo from July 2026) Everything in E3 plus full Defender XDR, Purview advanced compliance, Power BI Pro and Teams Phone. For regulated industries and organizations with SOC approach.
Microsoft 365 E7 ($99/mo. GA May 2026) Everything in E5 plus Microsoft 365 Copilot, Agent 365 and Entra Suite. The new all-in-one. For organizations already paying E5 + Copilot ($90/mo), E7 costs just $9 extra.
Most enterprise organizations manage with E3. E5 is only worth it if you actually use advanced compliance, Teams Phone or Power BI. Otherwise you're paying for features you never touch.
Frontline plans: F1 and F3
This is where most businesses overlook savings.
F1 ($2.25 → $3/mo from July 2026) Teams on mobile/web, basic identity with MFA, no Exchange mailbox. For employees who only need communication. F1 includes web-based Copilot Chat (with commercial data protection) but not full Microsoft 365 Copilot.
F3 ($8 → $10/mo from July 2026) Teams with full functionality, SharePoint, Intune device management, 2 GB Exchange kiosk mailbox. For frontline workers using shared devices.
- •F licenses are not compatible with Microsoft 365 Copilot ($30/mo). Copilot requires at minimum Business Standard, E3 or higher as a baseline
- •F licenses cannot be combined with Power BI Pro for the same user
- •F licenses may only be used by frontline workers, typically employees who primarily work on shared devices or mobile
- •Per tenant there's a hard cap on how many F licenses can be assigned relative to Enterprise licenses (Microsoft's "Frontline Worker Policy")
The math: A business with 30 office workers on E3 ($39) and 70 frontline on F3 ($10) pays $1,870/mo. If all 100 were on E3: $3,900/mo. Savings: $2,030/mo = $24,360/year.
Mixed licensing is fully supported and a well-chosen strategy. Microsoft designed F plans for exactly this.
July 2026: What's changing?
July 1, 2026 brings the biggest changes in Microsoft 365 licensing in years:
- •Business Basic: +17% ($6→$7)
- •Business Standard: +12% ($12.50→$14)
- •E3: +8% ($36→$39)
- •E5: +5% ($57→$60)
- •F1: +33% ($2.25→$3)
- •F3: +25% ($8→$10)
- •Unchanged: Business Premium ($22) and E7 ($99)
- •Selected Intune Suite features: Remote Help, Advanced Analytics, and Intune Plan 2 (but NOT the full Intune Suite. Cloud PKI, Advanced Analytics etc. remain a separate add-on)
- •Defender for Office 365 P1 (Safe Links + Safe Attachments)
Removal of volume discounts: Enterprise Agreement Level A-D discounts eliminated. Everyone pays list price.
E7 Frontier Suite: Generally available from May 2026. Bundles E5 + Copilot + Agent 365 + Entra Suite.
My recommendation by business type
Recommendation by company size:
- •Startup under 10 employees: Business Standard ($14/mo), desktop apps and Teams is all you need
- •SMB 10-300 employees: Business Premium ($22/mo), security and device management included
- •Enterprise 300+ employees: E3 ($39/mo). Windows Enterprise and unlimited users
- •Regulated industry: E5 ($60/mo). Defender XDR, Purview, Teams Phone
- •AI-first organization: E7 ($99/mo), everything included, simplest license model
- •Mixed workforce: Premium + F3, office workers on Premium, frontline on F3
Not sure? Our free optimizer asks 9-18 questions and gives a concrete recommendation with price calculation.
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Find the right planFrequently asked questions
Which Microsoft 365 plan is best for SMBs?+
For most businesses with 10-300 employees, Business Premium ($22/mo) is the right choice. It covers Office apps, Teams, Intune, Defender for Business, and Conditional Access. Those are the essentials for both operations and NIS2 compliance. Under 10 employees without compliance requirements can manage with Standard ($14/mo).
What's the difference between Microsoft 365 Business and Enterprise plans?+
Business plans (Basic, Standard, Premium) are designed for organizations up to 300 users. Enterprise plans (E3, E5, E7) have no user cap, offer Windows Enterprise license, unlimited eDiscovery, and more advanced compliance features. When you hit 300 users, you must move to Enterprise.
How many Microsoft 365 license types exist?+
There are 10 main plans: Business Basic, Standard, Premium (up to 300), Office 365 E3/E5, Microsoft 365 E3/E5/E7 (unlimited), and Frontline F1/F3 (for shared devices). Add-ons include Microsoft 365 Copilot ($30/$21), Agent 365 ($15), Entra Suite ($12), Power BI Pro ($14), and Teams Phone ($10).