Microsoft 365 glossary

Policy-based access control in Entra ID. Controls who can access what, from which devices and locations. Requires minimum Entra ID P1 (included in Business Premium and E3+).

Included in: Business Prem · M365 E3 · M365 E5 · M365 E7

Read more: Conditional Access explained, the most underrated feature in Microsoft 365

AI assistant integrated into Word, Excel, PowerPoint, Outlook and Teams. Uses your organization's data via Microsoft Graph for contextual work. Costs $30/user/mo as add-on or included in E7.

Included in: M365 E7

Read more: Microsoft 365 Copilot, what does it actually cost?

Free AI chat feature available in all Microsoft 365 plans. Can answer questions based on web data, but does not access your organization's files and data (unlike Microsoft 365 Copilot).

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

Endpoint security solution designed for businesses with up to 300 users. Includes threat detection, automated response and vulnerability management. Included in Business Premium.

Included in: Business Prem

Enterprise endpoint security platform. Plan 1 (P1) includes basic protection and is in Business Premium and E3. Plan 2 (P2) adds automated investigation and response and is in E5/E7.

Included in: Business Prem · M365 E3 · M365 E5 · M365 E7

Extended Detection and Response. NOT a standalone license but an umbrella term for the Microsoft 365 Defender portal. The XDR experience activates when you have E5's underlying Defender components (Defender for Endpoint P2, Defender for Office 365 P2, Defender for Identity, Defender for Cloud Apps). With fewer components, you get correspondingly less XDR coverage.

Included in: M365 E5 · M365 E7

Rules that prevent accidental sharing of sensitive data (social security numbers, credit cards, confidential documents). Basic DLP is in Business Premium and E3. Endpoint DLP requires E5.

Included in: Business Prem · M365 E3 · M365 E5 · M365 E7

Tool for searching, preserving and exporting data across Exchange, SharePoint, OneDrive and Teams. Standard is in E3, Premium (with AI analysis and advanced filtering) requires E5.

Included in: M365 E3 · M365 E5 · M365 E7

Microsoft's cloud-based identity and access management service. All M365 plans include Basic. P1 (Conditional Access) is in BP/E3+. P2 (Identity Protection, PIM) is in E5/E7.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

Microsoft's licensing agreement for large organizations (typically 500+ users). Provides volume discounts and ability to lock prices for 1-3 years. Note: volume discounts were removed on 1 November 2025.

Basic email protection against spam, malware and phishing. Included in all M365 plans with Exchange Online. This is the baseline. Defender for Office 365 adds advanced protection.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

Employees who primarily work outside the office (retail, warehouse, factory, hospital). Microsoft offers F1 ($3/mo) and F3 ($10/mo) with limited functionality at a lower price.

Included in: M365 F1 · M365 F3

Purview feature that identifies potential internal threats (data leaks, intellectual property, policy violations) via behavioral analysis. Only in E5 and E7.

Included in: M365 E5 · M365 E7

Cloud-based Mobile Device Management (MDM) and Mobile Application Management (MAM). Manages devices, apps and security policies. Plan 1 is in Business Premium and E3+.

Included in: Business Prem · M365 E3 · M365 E5 · M365 E7

Advanced Intune package with Endpoint Privilege Management, Cloud PKI, Enterprise App Management, Remote Help, and advanced analytics. E3 gained Remote Help, Advanced Analytics, and Intune Plan 2 (partial) on July 1, 2026. The full Intune Suite is only in E5 and E7.

Included in: M365 E3 · M365 E5 · M365 E7

Requires two or more verification methods at login (password + phone/app). Included free in all Microsoft 365 plans via Security Defaults. Conditional Access provides advanced MFA control.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7 · M365 F1 · M365 F3

Business intelligence tool for data visualization, reports and dashboards. Can share reports with other Pro users. Included in E5 and E7, otherwise $14/user/mo add-on (rose from $10 to $14 in April 2025).

Included in: M365 E5 · M365 E7

Unified platform for compliance, data protection and governance. Includes DLP, Sensitivity Labels, eDiscovery, Insider Risk and Information Barriers. Scope depends on your license.

Included in: M365 E3 · M365 E5 · M365 E7

Defender for Office 365 features that scan URLs and attachments in real-time for malware and phishing. Part of Defender P1 (Business Premium and E3) and P2 (E5/E7).

Included in: Business Prem · M365 E3 · M365 E5 · M365 E7

Consumption-based pricing for Security Copilot. Costs $6 per SCU. E5 and E7 include a number of SCUs. Used for AI-assisted security analysis.

Included in: M365 E5 · M365 E7

Classifies and protects documents and emails (e.g. 'Confidential', 'Internal Only'). Manual labeling is in BP/E3. Automatic labeling with AI requires E5.

Included in: Business Prem · M365 E3 · M365 E5 · M365 E7

Platform for file sharing, collaboration and intranet. Full SharePoint is included in all M365 plans, while F1 and F3 have a limited SharePoint Kiosk with 2 GB. Integrated with Teams, OneDrive and Microsoft Search.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

PBX functionality in Microsoft Teams, replaces traditional phone systems. Includes call queues, auto-attendant and voicemail. Included in E5/E7, otherwise add-on.

Included in: M365 E5 · M365 E7

Microsoft's discount program for businesses buying many licenses. Level B-D provided 6-12% discount (Level A was already list price). IMPORTANT: Volume discounts were removed on 1 November 2025, everyone pays list price.

Read more: July 2026: Microsoft raises prices, what does it mean for you?

Automates setup and deployment of new Windows devices. The user turns on the PC, signs in, and Autopilot configures everything automatically. Requires Intune (BP/E3+).

Included in: Business Prem · M365 E3 · M365 E5 · M365 E7

Microsoft's platform for chat, video meetings, file sharing and collaboration. Included in almost all Microsoft 365 plans. A free version with limitations is also available. Teams replaces Skype for Business and is central to the Microsoft 365 ecosystem.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7 · M365 F3

Cloud-based file storage with 1 TB per user. Syncs files across devices and enables sharing and collaboration. Included in all Microsoft 365 plans except F1. OneDrive for Business is the enterprise version with advanced administration.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

Cloud-based email server that powers Outlook mailboxes. Business and Enterprise plans provide a 100 GB mailbox (Business plans since 1 July 2026). Includes calendar, contacts and tasks. Exchange Online Protection (EOP) against spam and malware is included in all plans.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

Microsoft's cloud computing platform for hosting, databases, AI and infrastructure. Azure is separate from Microsoft 365 but shares the identity system Entra ID. Azure Active Directory (now Entra ID) is what controls login and access to all Microsoft cloud services.

A free login that provides access to Microsoft's consumer services (Outlook.com, personal OneDrive, Microsoft Store). A Microsoft account is NOT the same as a Microsoft 365 license. For business use, you need a Microsoft 365 tenant with a work or school account.

Office 365 plans include only productivity apps and services (Exchange, SharePoint, Teams). Microsoft 365 plans add Windows Enterprise licensing, Intune device management and advanced security features. Microsoft recommends Microsoft 365 plans for new customers. Office 365 plans are being gradually phased out.

Included in: M365 E3 · M365 E5 · M365 E7

Read more: E3 vs E5, is the extra $20 worth it? · Microsoft 365 for businesses, the complete guide (2026)

Desktop versions of Word, Excel, PowerPoint, Outlook and more. Can be purchased as a one-time purchase (Office LTSC 2024) without updates, or as part of a Microsoft 365 subscription with ongoing updates. One-time purchases do NOT get new features or security updates after release.

Included in: Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

Microsoft's platform for building, customizing and deploying custom AI agents and workflows. Enables creating chatbots, automating tasks and integrating with business data. Pricing starts from $200/mo as a separate product.

Former individual Copilot license for personal users at $20/mo. Microsoft retired the product on 6 October 2025 and replaced it with Microsoft 365 Premium (personal subscription with Copilot built in). No business relevance, organizations should use Microsoft 365 Copilot ($30/user/mo) as an add-on to a Business, Enterprise or F plan.

Microsoft's new licensing model for seat-based offers, GA on 10 January 2022 (legacy CSP transition was mandatory from March 2022). Requires 12-month commitment with a 7-day cancellation window (extended from the original 72 hours). Monthly billing costs 5% more. NCE applies to all Microsoft 365 plans purchased through CSP partners. Microsoft raised list prices on July 1, 2026. Pricing follows your renewal date, so an agreement signed before that date keeps the old price until it next renews.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

Read more: July 2026: Microsoft raises prices, what does it mean for you? · Microsoft 365 prices in DKK, complete overview (2026)

Your organization's Microsoft 365 instance with all users, licenses, data and configurations. One tenant = one Azure Active Directory (now Entra ID). All your SharePoint sites, Exchange mailboxes, Teams data and OneDrive files belong to your tenant. Copilot with tenant grounding can access data in your tenant.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

Separate Microsoft 365 cloud designed specifically for US and allied government agencies. GCC, GCC High and DoD environments have stricter compliance requirements and data residency guarantees. License prices and feature availability may differ from commercial plans.

Licensing model where organizations purchase Microsoft 365 licenses through a certified Microsoft partner instead of directly from Microsoft. The partner handles billing, support and advisory. All CSP purchases now occur through NCE (New Commerce Experience) with 12-month commitment.

Included in: Business Basic · Business Std · Business Prem · M365 E3 · M365 E5 · M365 E7

AI concept describing giving an AI model access to organization-specific context. In Microsoft 365 context: Copilot Chat is NOT grounded (uses only web data), while Microsoft 365 Copilot is grounded via Microsoft Graph and can access your SharePoint files, emails, Teams messages and calendar. Grounding is the difference between a generic AI and an AI that knows your business.

Included in: M365 E7

Agentic automation layer inside Microsoft 365 Copilot. You describe a task in natural language, and Cowork breaks it into steps and executes them across M365 (Outlook, Word, Excel, PowerPoint, Teams, calendar and research). Cowork shows each step, you approve sensitive actions, and it runs on Work IQ. It requires an M365 Copilot license and is billed on a usage basis via Copilot Credits.

Included in: M365 E7

Read more: Copilot Cowork: when Microsoft 365 Copilot performs the tasks itself

The intelligence and context layer that powers Microsoft 365 Copilot and agents with shared, real-time context across the organization. Built on three layers: Data, Memory and Inference. Work IQ is the reason Copilot and Cowork understand your business. It is not a separate purchase: it comes with the M365 Copilot license.

Included in: M365 E7

Read more: Work IQ explained: the context engine behind Copilot and Cowork

Usage-based billing unit for Copilot Cowork tasks, added on top of your M365 Copilot license. PayGo (pay-as-you-go) costs $0.01 per credit, or you can prepay (P3) for a discount. The price per task depends on model usage, context retrieval, tool calls and runtime, so it is a variable cost you should budget and monitor.

Included in: M365 E7

Read more: Copilot Cowork: when Microsoft 365 Copilot performs the tasks itself