Pricing for Office 365: Determining the Right Plan for Your Organization

By Rosemarie Withee, Ken Withee, Jennifer Reed

Office 365 is a SaaS solution running in the public cloud offered on a subscription basis by Microsoft. Each subscription is comprised of one or more licenses depending on the organization’s needs. Subscriptions can be purchased directly from Microsoft or through a Microsoft Cloud Solutions Provider (CSP). When you purchase your subscription directly from Microsoft, your support comes from Microsoft. If you purchase your subscription from a CSP, support for the services is provided by the CSP.

It is important to note that Office 365 comes in two versions: Home and Business. As the name implies, the Home version is intended for home use and does not include the productivity solutions such as Exchange Online or SharePoint Online, which are typically used by businesses for productivity and collaboration.

Choosing between Office 365 Small Business and Enterprise plans

Office 365 comes with four key technologies (or “workloads” as your IT team might call it):

  • Exchange Online: A messaging application that powers business-class email.
  • SharePoint Online: A web-based collaborative platform that is typically used for online storage, document collaboration, intranets, and more.
  • Teams: Formerly called Skype for Business, the technology behind web and audio conferencing, chats, screen sharing, voice communication, and more.
  • Office Applications: Productivity tools including Outlook, Word, PowerPoint, Excel, Access, and more that are available in both desktop and online versions.

In additional to the four key technologies listed here, the Office 365 suite also comes with a host of other features, some of which may only be available in the Small Business plan, such as Microsoft Bookings, and others that are available in all plans, such as Planner, StaffHub, Forms, PowerApps, and more. As a SaaS solution, Office 365 will continue to evolve, so don’t be surprised to find new features in your subscription that may not be covered in this book.

You can view what services and features are currently available across the various Office 365 plans.

While it’s true that all organizations should have access to productivity and security tools, not all organizations need the same bells and whistles to run their business or pay the same price for the services. It doesn’t make sense for a small business, for example, to pay the same fees as a large enterprise that has more advanced needs such as eDiscovery for legal purposes.

To address this need, Microsoft designed a variety of plans and subscriptions from which organizations can choose. There are, however, so many plans, subscriptions, and license combinations that sometimes it can be difficult to know which one is right for your organization. To help narrow down your options, refer to the decision tree below to quickly determine what’s best for you by answering three questions.

Office 365 plan decision tree
Small Business or Enterprise plan decision tree.

 

Office 365 Small Business

The Small Business plans are designed to meet the typical needs of small businesses with 300 or fewer users. There are three key offerings in the Small Business plans:

  • Office 365 Business: $8.25 per user per month; ideal for users who only need the Office desktop applications and access to online storage.
  • Office 365 Business Essentials: $5 per user per month; ideal for users who need business-class email and collaboration tools but do not need the Office desktop applications.
  • Office 365 Business Premium: $12.50 per user per month; ideal for users who need business-class email and collaboration tools and the Office desktop applications.

For small and mid-sized nonprofits, Microsoft offers two plans that correspond to the Business Essentials and Business Premium plans but at zero cost and $3 per user per month, respectively.

Office 365 Enterprise

There are four key offerings in the Office 365 Enterprise plans ranging from $8 per user per month to $35 per user per month:

  • Office 365 ProPlus: $12 per user per month; ideal for users who only need the Office desktop applications and access to online storage.
  • Office 365 E1: $8 per user per month; ideal for users who need business-class email and collaboration tools but do not need the Office desktop applications.
  • Office 365 E3: $20 per user per month; ideal for users who need all the features in Office ProPlus and E1 plus security and compliance tools such as legal hold, retention policies, data loss prevention policies, and more.
  • Office 365 E5: $35 per user per month; ideal for users who need all the features in the Office 365 E3 plus advanced security functionalities, analytics, and voice capabilities such as the ability to make and receive phone calls or allow meeting participants to dial-in to a meeting for audio conferencing. Please note that there is an additional fee of $24 per user per month to make domestic and international calls. For domestic calls only, the fee is $12 per user per month.

You can mix and match a variety of enterprise subscription plans based on the needs of your users, and there is no limit to the number of users on the enterprise plans.

The education, government, and nonprofit sectors have corresponding Enterprise plans. The education plans are called A1, A3, and A5; government plans are called G1, G3, and G5; and nonprofits are called Nonprofit E1, Nonprofit E3, and Nonprofit E5. Take note that prices are different for these sectors, so check with your CSP orvisit Office365.com.

Taking care of the firstline workforce with Office 365

If you run a business with deskless workers, shift workers, retail store employees, truck drivers, or similar employees, you probably don’t need all the features from any of Enterprise plans. Most of these workers share a PC or work out of a kiosk and have minimal collaboration requirements and limited communication needs. It doesn’t make sense for these workers to pay the full price for plans that have more features than they need or exclude them from the benefits of using Office 365.

To solve this challenge, Microsoft designed an offering called Office 365 F1 that is targeted for the “firstline workforce.” For $4 per user per month, the F1 plan gives this workforce most of the productivity and collaboration tools focused on these key areas:

  • Schedule and task management
  • Communications and community
  • Training and onboarding
  • Identity and access management

Choosing an Office 365 Plan

Office 365 has blossomed over the years. It isn’t a one-size-fits-all product. Microsoft recognized this and broke up the product into specific plans to fit the needs of individuals, families, small business, and all the way up to multinational enterprises and educators.

When you’re first getting your head wrapped around Office 365, you can think of it as two different products under the same marketing umbrella:

  • If you’re a consumer, and you would initially think of buying software at a store like Best Buy, then you’re likely looking for one of the Home plans.
  • If you’re looking for Office 365 for your business or organization, then you’re likely looking for one of the Business plans.

When you land on the Office 365 page, this choice is neatly set in front of you with a For Home button and a For Business button.

Office 365 landing page
The Office 365 landing page.

 

You can find the Office 365 plans for educators by clicking the Products drop-down menu at the top of the Office home page. There are plans for schools, teachers, and students.

If you’re looking for a personal plan and you click the For Home button, the process of purchasing and installing Office 365 is relatively straightforward. Microsoft is constantly changing the terminology so we’re hesitant to name the plans. As of this writing, they’re offering two plans with the following primary differences:

  • With a Home plan, you have five users that can each install Office products on five devices.
  • With a Personal plan, you have only one user that can install Office products on five devices.

Both of these plans are on a subscription basis and you’re constantly guaranteed to have the most up-to-date software. When a new version of the products comes out you instantly get to install and use it. If you don’t like the subscription model, there’s a one-time purchase option, but you don’t get the updated products as they come out.

Office 365 For Home

The Office 365 For Home plans are shown below.

Office 365 For Home
The Office 365 For Home plans.

 

When you’re looking for a business or organization plan, the options require much more thought and planning. Again, Microsoft is constantly jiggering the plans to try to segment the offerings in the smartest way for each type of organization. As of 2018, the business plans range from $5 per user per month (the Business Essentials plan) to $35 per user per month (the Enterprise E5 plan). These can be charged annually.

If you also use Windows 10, you can save money by bundling Office 365 with other Microsoft products. Microsoft labels these bundled packages as Microsoft 365. Check it out with a quick Google search.

Office 365 For Business

The Office 365 For Business plans are shown here.

Office 365 For Business
The Office 365 For Business plans.

 

The Office 365 business plans have changed over the years and Microsoft has landed on a fairly intuitive grouping. There are small- and medium-sized business plans and there are plans that are geared toward large enterprises. One of the main things to look for is whether a plan includes the Microsoft Office productivity apps that can be installed on your local device (Word, Excel, PowerPoint, OneNote, Outlook, Publisher, and OneDrive).

The Office 365 business plans are outlined below.

Office 365 For Business Plans
Plan Description Price / User / Mo.*
Office 365 Business Essentials Online versions of Office. Comes with 50GB mailbox (Exchange), 1TB file storage, and video conferencing. The max number of users is 300. $5.00
Office 365 Business Doesn’t include email (Exchange) but includes the full versions of Microsoft Office that you can install on your local device. The max number of users is 300. $8.25
Office 365 Business Premium Includes both email (Exchange) and the full versions of Microsoft Office. The max number of users is 300. $12.50
Office 365 Pro Plus Includes the full version of Microsoft Office and adds Microsoft Access. The Office apps can be installed on up to 5 devices per user. Think of this offering as just Microsoft Office, because it doesn’t include email or conferencing. Includes 1TB of online file storage. The max number of users is unlimited. $12.00
Office 365 Enterprise E1 The entry level enterprise plan that includes features such as business class email, calendar, and contacts (Exchange) with 50GB of space, online meetings (Teams and Skype for Business), and a content management system and intranet (SharePoint). Also includes 1TB of file storage. This initial offering doesn’t include the full versions of Microsoft Office however. $8.00
Office 365 Enterprise E3 Similar to the E1 plan but this plan includes the full versions of Microsoft Office that can be installed on your local device and an unlimited email box. $20.00
Office 365 Enterprise E5 Similar to the E3 plan but this plan adds some additional security and analytics features and the biggest addition is Public Switched Telephone Network (PSTN) calling and Cloud PBX for cloud-based call management. $35.00

* Prices are subject to change. You can also add various options, which affects the price, too.

It’s recommended that you carefully research each plan option based on what is available at the time you’re looking to implement Office 365 for your business or organization. Microsoft is constantly adding new features and shifting things around. Be sure to check the specific plans before basing your decision on the prices listed here.

In addition to the plans outlined for business there are also Office 365 offerings for educational institutions, government institutions, and non-profit organizations. Some of these Office 365 plans are even free for qualifying institutions and organizations.