What is the security difference between Microsoft 365 Business Premium, E3 and E5?
Microsoft 365 Business Premium, for up to 300 users, includes Entra ID P1, Intune, Defender for Business and Defender for Office 365 Plan 1. Microsoft 365 E3 includes Entra ID P1, Intune and Defender for Endpoint Plan 1, but not Defender for Office 365. E5 adds Entra ID P2, Defender for Endpoint Plan 2, Defender for Office 365 Plan 2, Defender for Identity and Defender for Cloud Apps.
The comparison, from Microsoft's own documentation
This comparison reflects Microsoft Learn licensing pages checked in October 2026. Microsoft renames and repackages plans often, so confirm against the current service descriptions before you buy.
- Business Premium: Entra ID P1 with Conditional Access, full Intune, Defender for Business for endpoints, and Defender for Office 365 Plan 1 for email and collaboration. Designed for organizations with up to 300 users.
- E3: Entra ID P1, Intune Plan 1 and Defender for Endpoint Plan 1, which covers core protection such as next-generation anti-malware and attack surface reduction. Defender for Office 365 is not included in E3.
- E5: everything security-related in E3, plus Entra ID P2, Defender for Endpoint Plan 2, Defender for Office 365 Plan 2, Defender for Identity, Defender for Cloud Apps and automatic client-side sensitivity labeling.
Where the differences matter
Email is the first gap people miss. Microsoft lists Business Premium, E5 and standalone licenses as providing Defender for Office 365 Plan 1, and E3 is not on that list. A company moving up from Business Premium to E3 can lose protection unless it adds Defender for Office 365.
Endpoints are the second. Microsoft says Defender for Business is built on Defender for Endpoint capabilities and includes endpoint detection and response. E3's Defender for Endpoint Plan 1 delivers core protection; Microsoft lists endpoint detection and response, automated investigation and remediation, and threat and vulnerability management as Plan 2 capabilities, which come with E5.
Identity is the third. Microsoft states that risk-based Conditional Access policies require Entra ID Protection, a P2 feature, and that Privileged Identity Management needs Entra ID P2 or ID Governance licenses. E5 also adds Defender for Identity, which protects hybrid environments that still run on-premises Active Directory.
Add-ons instead of a full jump
You do not have to move everyone to E5 to get E5-level security. Microsoft offers the Microsoft Defender Suite, formerly Microsoft 365 E5 Security, including an add-on for Business Premium that brings Entra ID P2 and Defender for Endpoint Plan 2.
Watch one trap: Microsoft states that Defender for Business does not support mixed licensing. If only some Business Premium users get Defender Suite, the tenant defaults to the Defender for Business experience until every user is licensed for Defender for Endpoint Plan 2 and Microsoft Support makes the switch.
How to choose
- Over 300 users, or close to it: plan for enterprise plans.
- Under 300 with no special compliance needs: Business Premium covers a strong baseline.
- Hybrid Active Directory, privileged-access risk or heavy SaaS use: price E5 or Defender Suite add-ons.
- Defense CUI: the government plans in GCC High are a separate decision.
Common follow-up questions
Is Business Premium enough for a small business?
For most companies under 300 users it covers the core: MFA and Conditional Access through Entra ID P1, device management through Intune, endpoint detection and response through Defender for Business, and email protection through Defender for Office 365 Plan 1. It still has to be configured well.
Can we mix Business Premium and E3 or E5 licenses?
Partly. Microsoft says not every user needs Business Premium, though its security benefits apply only to users and devices it covers. Endpoint licensing is stricter: Defender for Business does not support mixed licensing with Defender for Endpoint Plan 2, so plan endpoint licenses tenant-wide.
What about Microsoft 365 E7?
Microsoft's Entra licensing documentation now lists Microsoft 365 E7, which includes Entra ID P1 and P2 and the Microsoft Entra Suite. It is aimed at enterprises; check Microsoft's current plan pages before comparing it with E5.
LAN Service Group helps small and mid-size businesses choose the right Microsoft 365 plan and add-ons, then configures and administers the security features they are paying for.
Talk to LAN Service Group (888) 281-7243