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Microsoft 365 licensing, explained for growing businesses

Business Basic, Standard, Premium or E3? A plain-English guide to Microsoft 365 licences in 2026, where Copilot fits, and the mistakes that waste money.

Geidi Cloud Team, 29 September 2026

The Microsoft 365 renewal lands, the total has crept up again, and nobody in the room can say with confidence what each licence is for. That is rarely anyone's fault. Microsoft reshuffles the line-up every year or two, the plan names sound alike, and the feature lists run to pages.

This guide covers the plans most Australian organisations choose between, what changed in 2024 and 2026, and where Copilot fits. It is accurate as of September 2026, so check Microsoft's current plan pages before you sign.

The business plans, for up to 300 users

Microsoft sells three business suites, plus an apps-only plan, all capped at 300 users.

  • Business Basic gives each person email on your domain, Teams (in the version that includes it), SharePoint, 1 TB of OneDrive storage, and the web and mobile versions of Word, Excel, PowerPoint and Outlook. There are no installable desktop apps. It suits people who work in a browser or on a phone: a site supervisor, a casual, a board member who reads papers and replies to email.
  • Business Standard adds the desktop versions of the Office apps, along with extras such as Loop and Clipchamp. This is the plan for anyone who builds spreadsheets or long documents all day.
  • Business Premium is Standard plus the security layer. Microsoft Learn describes it as including Microsoft Intune for managing Windows, Mac, iPhone and Android devices, and Microsoft Defender for Business for endpoint protection. It also includes Microsoft Entra ID P1, which is where Conditional Access lives: the rules that decide who can sign in, from which device, and from where.

Our view: if your staff handle client files, payroll or anything you would hate to read about in the news, Business Premium should be the default, and the cheaper plans the exception you justify. Its tools are what let you enforce multi-factor sign-in, keep laptops patched and wipe a lost phone.

Teams is now sold separately, sometimes

From 1 April 2024, Microsoft began selling its commercial suites outside Europe both with and without Teams.

For the business plans, both versions sit side by side. You can buy Business Standard with Teams, or Business Standard (no Teams) for less and use something else for meetings.

For the enterprise suites (Office 365 E1, E3 and E5, and Microsoft 365 E3 and E5), new customers can no longer buy the version with Teams at all. They buy the no-Teams suite plus a separate Microsoft Teams Enterprise licence. Customers who already had Teams in one of those suites can keep renewing it.

If a quote says "no Teams" and your staff live in Teams, find where Teams is licensed before you sign. If you genuinely run on Zoom, the no-Teams business plans are a fair saving.

The July 2026 price and packaging changes

Microsoft changed the pricing of its commercial suites from 1 July 2026. Its public FAQ says existing customers see the new prices at their next renewal after that date, on monthly and annual billing alike, and that customers on existing multi-year agreements keep their current pricing until they renew. The products on Microsoft's list include Business Basic, Business Standard, Microsoft 365 Apps for business, and the E3 and E5 suites.

Microsoft links the increase to features it has added, naming Copilot Chat, Microsoft Defender for Office 365 Plan 1 and parts of the Intune Suite.

We are not quoting prices, because they vary by currency, reseller and term. What matters is timing: a renewal after 1 July 2026 is the moment to review the mix, before it rolls over on its own.

When the enterprise plans make sense

E3 and E5 have no user cap. You need them once you pass 300 users, or earlier if you need something the business tier does not offer.

Microsoft 365 E3 includes Windows Enterprise, Intune and Microsoft Purview for data governance. E5 adds, according to Microsoft's plan page, Teams Phone for calling outside the organisation, Power BI, extended detection and response across devices and identities, and data security and compliance tooling aimed at higher-risk, regulated data. Microsoft now also sells E7, which bundles E5 with Microsoft 365 Copilot and tools for managing AI agents.

Under 300 users, most organisations get more from Business Premium than from moving everyone to E3. The exception is a regulated organisation with a specific requirement, such as records retention, that the business tier does not meet. Confirm it feature by feature against Microsoft's service descriptions.

Copilot Chat and Microsoft 365 Copilot are different things

The names are confusingly close, so it helps to separate them.

  • Copilot Chat is included with eligible Microsoft 365 subscriptions at no extra cost. Its answers come from the web, plus anything a person pastes into it. It does not search your email or files.
  • Microsoft 365 Copilot works inside Word, Excel, Outlook and Teams and draws on the email, documents, chats and meetings each person can already open. It needs a paid licence. For business plans that is the Microsoft 365 Copilot Business add-on, for up to 300 users, on top of Business Basic, Standard or Premium, Microsoft 365 Apps for business or Teams Essentials. Microsoft also sells bundles such as Business Premium with Copilot. Enterprise customers add Microsoft 365 Copilot to E3 or E5, or buy E7.

Before paying for the second one, look at your permissions. Microsoft says Copilot only surfaces data a user has at least view access to. That sounds reassuring until you remember the finance folder shared with "Everyone" in 2019. Tidy the sharing first, then license a small pilot group.

Common mistakes that cost money

  1. One plan for everyone. Reception and the finance team rarely need the same licence. You can hold several business plans in one tenant and assign them person by person.
  2. Licences on leavers. An account keeps its licence until someone removes it. Offboarding should include reclaiming the licence, not just blocking sign-in.
  3. Paying twice for security. Some Business Premium customers still pay for a separate device management or antivirus product that overlaps with Intune and Defender for Business. Sometimes that is deliberate. Often it is inertia.
  4. Choosing on price alone. Basic and Standard leave out Intune and Conditional Access. Without them, the controls that frameworks such as the Essential Eight ask for, like enforcing multi-factor sign-in and keeping devices patched, are much harder to put in place and harder still to prove.
  5. Letting auto-renew decide. Annual commitments are harder to reduce mid-term than monthly ones. Check your commitment terms before you assume you can drop seats in March.

What to do before your next renewal

  1. Export your licence list from the Microsoft 365 admin centre and match it against your staff list.
  2. Sort people into groups: browser only, full desktop apps, and anyone who handles sensitive data or uses a company laptop.
  3. Set your security baseline. For most organisations that means Business Premium for the last group.
  4. Check every quote for Teams.
  5. Decide on Copilot separately, after a permissions review.
  6. Set a reminder 60 days before the renewal date.

Where Geidi fits

Geidi's Cloud and Business Systems service covers Microsoft 365, SharePoint and Dynamics 365, implemented and managed as one environment, including migration, licensing and day-to-day running. If you would like a second opinion on your licences before the next renewal, book a conversation.

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