Microsoft 365 vs Office 365: What Changed and Which Plan to Buy

For a small business, Office 365 and Microsoft 365 are mostly two names for the same subscriptions: on April 21, 2020, Microsoft renamed its Office 365 business plans to Microsoft 365 without changing their price or features. The difference that still matters sits in the enterprise plans, where Office 365 E1, E3 and E5 cover the Office apps, email, files and Teams, while Microsoft 365 E3 and E5 add Windows Enterprise, Intune device management and Entra ID P1 or P2.

So the useful question isn't which brand to buy. It's whether your plan manages the people and devices behind the mailboxes, or only the apps. This guide maps the old names to the new ones, compares Office 365 E3 with Microsoft 365 E3, and shows where Business Premium fits, using Microsoft's US list prices as of October 2026, per user per month with an annual commitment. Our Microsoft 365 management service runs this review for clients before each renewal.

Is Office 365 the same as Microsoft 365?

For the plans most small businesses buy, yes. Microsoft announced on March 30, 2020 that its small and midsize business plans and Office 365 ProPlus would carry the Microsoft 365 name from April 21, 2020, and called it a change to the product name only, with no pricing or feature changes. Subscribers didn't have to do anything. The enterprise Office 365 E1, E3 and E5 plans kept their names, and Microsoft still sells them.

The row that trips people up is the second one. If an old invoice says Office 365 Business Premium, you were buying what is now Business Standard: the apps, email and Teams, with no Intune and no Defender for Business. Today's Business Premium used to be called Microsoft 365 Business. So comparing Office 365 Business Premium with Microsoft 365 Business Premium really means comparing today's Standard and Premium plans.

What is the difference between Office 365 E3 and Microsoft 365 E3?

Office 365 E3 is the productivity suite: desktop Word, Excel, PowerPoint and Outlook, Exchange email, SharePoint, OneDrive and Teams, with Purview data loss prevention and eDiscovery (Standard). Since July 2026 it also includes Defender for Office 365 Plan 1 for email. Microsoft 365 E3 contains all of that and adds the controls Office 365 leaves out:

• Identity. Entra ID P1, the license that turns on Conditional Access. Office 365 E3 comes with the free version of Entra ID.
• Device management. Intune Plan 1, plus Intune Plan 2, Remote Help and Advanced Analytics, which Microsoft added to Microsoft 365 E3 in its July 2026 packaging update.
• Windows and endpoint security. Windows 11 Enterprise E3 and Defender for Endpoint Plan 1.

That matches how Microsoft described the product when it renamed the business plans: Microsoft 365 began in 2017 as a licensing bundle of Office, Windows and Enterprise Mobility + Security. On the price list the gap is $13.00 per user per month, with Office 365 E3 at $26.00 and Microsoft 365 E3 at $39.00 on Microsoft's enterprise plans page as of October 2026.

Prices are Microsoft's US list prices per user per month with an annual commitment, from its plan pages and its July 2026 pricing and packaging update. Microsoft lists every enterprise suite with and without Teams, and sells Teams Enterprise on its own for $8.55.

Buying the missing pieces separately doesn't save money. Office 365 E3 at $26.00, plus Enterprise Mobility + Security E3 at $12.00 for Intune and Entra ID P1, plus Windows E3 at $7.63, comes to $45.63 before any endpoint protection, against $39.00 for Microsoft 365 E3.

How does Office 365 E5 compare with Microsoft 365 E5?

Office 365 E5, at $41.00, is Office 365 E3 with the communication and compliance extras: Teams Phone and Audio Conferencing, Power BI Pro, Defender for Office 365 Plan 2, and the Premium tiers of Purview Audit and eDiscovery. It still has no Intune, no Windows license and only the free tier of Entra ID.

Microsoft 365 E5, at $60.00, adds the rest of Microsoft's security stack: Entra ID P2 for risk-based Conditional Access and Privileged Identity Management, Defender for Endpoint Plan 2, Defender for Identity and Defender for Cloud Apps, every Intune advanced capability, Windows 11 Enterprise E5 and Security Copilot. Our Microsoft 365 E3 vs E5 comparison covers that step in detail.

Comparing across the two families works the same way. Microsoft 365 E3 at $39.00 manages identities and devices; Office 365 E5 at $41.00 adds calling, analytics and stronger email protection but manages neither. A firm that wants both ends up on Microsoft 365 E5.

Business Premium or Office 365 E3?

For an organization under 300 people, Microsoft 365 Business Premium is usually the better buy, and it costs less: $22.00 against $26.00 for Office 365 E3. It includes what Office 365 E3 lacks, namely Intune Plan 1, Entra ID P1 with Conditional Access, and Defender for Business, along with Defender for Office 365 Plan 1 and Purview information protection and data loss prevention. Both come with a 100 GB mailbox and an archive that can grow to 1.5 TB, according to Microsoft's Exchange Online limits.

Office 365 E3 wins on scale. Microsoft designs its business plans for up to 300 users across the whole business family, while E3 has no user cap, starts OneDrive at 1 TB per user with room to grow past 5 TB, and adds eDiscovery (Standard). Business Standard, at $14.00, has the same desktop apps without E3's compliance tools or its larger archive, and Office 365 E1, at $10.00, is web and mobile apps only with a 50 GB mailbox. Our Business Premium vs E3 guide covers the move to the enterprise plans once you pass 300 people.

Which fits a small team?

• Up to 300 people, laptops leave the office, or you hold client data: Microsoft 365 Business Premium. It covers identity, devices and email security in one license.
• Up to 300 people, low risk, desktop apps needed: Business Standard, knowing it has no Intune or Conditional Access.
• More than 300 people, or a need for Windows Enterprise, eDiscovery or larger OneDrive allowances: Microsoft 365 E3, moving to E5 only for the security and compliance tools you will actually run.
• Another platform already manages your devices and sign-ins: Office 365 E3 or E5 can make sense, since you would otherwise pay twice for Intune and Entra ID P1.

Business plans can be mixed with each other in one tenant, and Microsoft counts the 300-seat limit across all of them combined, so a firm can put most staff on Business Premium and the rest on Basic or Standard.

What does each option cost?

As of October 2026, Microsoft's US list prices per user per month with an annual commitment are $7.00 for Business Basic, $14.00 for Business Standard and $22.00 for Business Premium; $10.00, $26.00 and $41.00 for Office 365 E1, E3 and E5; and $39.00 and $60.00 for Microsoft 365 E3 and E5. Business plans bought month to month cost 20 percent more, so Business Premium is $26.40 on a monthly subscription.

Several of those prices are new. On July 1, 2026, Microsoft raised Business Basic from $6.00 to $7.00, Business Standard from $12.50 to $14.00, Office 365 E3 from $23.00 to $26.00, Office 365 E5 from $38.00 to $41.00, Microsoft 365 E3 from $36.00 to $39.00 and Microsoft 365 E5 from $57.00 to $60.00, while Office 365 E1 and Business Premium held. Existing customers keep their old price until renewal, so a quote from last spring may already be out of date.

The license is rarely the whole bill. Switching plans doesn't require a migration: Microsoft lets you move a subscription to a different plan, and the change happens in the tenant you already have. The work is in using what the new license adds, such as enrolling devices in Intune, writing Conditional Access policies, onboarding endpoint protection and testing each before it is enforced. Budget for that setup and for whoever supports it afterward.

How does NetSys help?

Licensing review is part of our Microsoft 365 management work. We compare the plan each person holds with how they actually work, retire unused seats and manage renewals, then configure the security a plan already pays for, such as Conditional Access and device compliance, instead of leaving it switched off. Agreements run month to month, priced as a flat monthly fee per user that moves with headcount and the scope you choose.

Book a call with a NetSys engineer to check whether your Office 365 or Microsoft 365 plans still fit. Bring your license list and we'll walk through it before your next renewal.

Frequently asked questions

What is Microsoft 365 vs Office 365?

Office 365 is the older name for Microsoft's cloud productivity plans: the Office apps, Exchange email, SharePoint, OneDrive and Teams. Microsoft 365 is the newer family that includes those services and, in Business Premium and the Microsoft 365 E plans, adds Windows licensing, Intune device management and Entra ID security. Since April 2020 the small business plans carry only the Microsoft 365 name.

Is Office 365 being discontinued?

No. Microsoft still sells Office 365 E1, E3 and E5 and lists their prices on its enterprise pages as of October 2026. What went away in 2020 were the Office 365 names for the small business plans and for ProPlus, which became Microsoft 365 Apps for enterprise.

Do we need a migration to move from Office 365 to Microsoft 365?

No. Changing plans is a licensing change inside the tenant you already have, so mailboxes, OneDrive files and Teams stay where they are. The project work comes after the switch, when you turn on the device management and Conditional Access the new plan includes.

Is Office 365 E3 or Business Premium better for a 50-person firm?

Business Premium, in most cases. It lists at $22.00 against $26.00 for Office 365 E3 as of October 2026, and it adds Intune, Conditional Access and Defender for Business, which Office 365 E3 lacks. Office 365 E3 pulls ahead only when a business needs more than 300 seats or E3's compliance and storage allowances.

What affects the cost of changing plans?

Three things: the list price difference per user, the setup work to switch on what the new plan includes, and who supports it afterward. The license change itself takes minutes. Enrolling devices, testing Conditional Access in report-only mode and helping staff through new sign-in prompts takes longer, and the number of devices and exceptions decides how much longer.