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Microsoft 365 E3 vs. E5: Which One Is Right for Your Business?

by | Jun 15, 2025 | Microsoft

In the world of enterprise productivity and security, Microsoft 365 stands out as a comprehensive suite that empowers organizations to collaborate, communicate, and protect their digital assets. Among its offerings, Microsoft 365 E3 and Microsoft 365 E5 are two popular plans for medium to large organizations. While they share many features, the differences between them can have a significant impact depending on your business needs.

What is Microsoft 365 E3?

Microsoft 365 E3 is a robust productivity suite that includes essential tools for modern businesses. It offers:

  • Office Apps (Word, Excel, PowerPoint, Outlook, etc.)

  • Email and Calendar with Exchange Online

  • File Storage and Sharing through OneDrive and SharePoint

  • Collaboration Tools like Microsoft Teams

  • Basic Security features including data loss prevention (DLP), Azure Information Protection (AIP) P1, and Microsoft Defender Antivirus

  • Windows 11 Enterprise and Microsoft Intune for device management

E3 provides everything a business needs to enable a hybrid or remote workforce, offering strong value and a familiar toolset for organizations already using Microsoft products.

What is Microsoft 365 E5?

Microsoft 365 E5 includes everything in the E3 plan, but it takes security, analytics, and communication capabilities to the next level. It’s ideal for organizations with advanced compliance needs or heightened security concerns. In addition to all E3 features, E5 includes:

  • Advanced Threat Protection with Microsoft Defender for Endpoint and Office 365

  • Microsoft Sentinel and Microsoft Defender XDR

  • Azure Active Directory Premium P2 for Identity Protection and risk-based conditional access

  • Advanced Compliance Tools including Insider Risk Management and Communication Compliance

  • Power BI Pro for advanced data analytics and visualization

  • Microsoft Teams Phone System and Audio Conferencing

E5 is a complete solution for enterprises needing comprehensive security, compliance, and data insights.

Key Differences

  1. Security: E5 significantly enhances cybersecurity with Defender for Endpoint, threat analytics, and identity protection tools that E3 does not offer.

  2. Compliance: E5 includes advanced compliance solutions like Customer Key, Advanced eDiscovery, and Insider Risk Management.

  3. Analytics: Only E5 comes with Power BI Pro, which helps businesses visualize and analyze data more effectively.

  4. Calling and Conferencing: E5 includes Teams Phone with PSTN calling capabilities and audio conferencing, ideal for global communication needs.

Choosing Between E3 and E5

The decision comes down to risk tolerance, regulatory requirements, and strategic priorities:

  • Choose E3 if you’re a cost-conscious organization looking for a full-featured productivity suite with standard security and compliance.

  • Choose E5 if your business handles sensitive data, operates in a regulated industry, or has complex security and compliance needs.

Final Thoughts

Both Microsoft 365 E3 and E5 are powerful offerings that cater to different business requirements. E3 is sufficient for many companies, but E5 is essential for those needing advanced protection and insight. Understanding your organization’s needs is key to making the right investment.

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