Microsoft 365 Business Premium and Microsoft 365 E3 are both capable licences, and choosing between them is a genuine decision point for businesses with 50 to 300 users. The naming is unhelpful - "Business" sounds smaller than "Enterprise," so people assume E3 must be the more serious option. That isn't always true.
This comparison covers what actually differs between the two, where each wins, and the situations where one is clearly the right answer.
Pricing
Feature comparison
📋 What each includes| Feature | Business Premium | E3 |
|---|---|---|
| Microsoft 365 Apps (desktop Office) | Yes | Yes |
| Exchange Online (50GB mailbox) | Yes | Yes |
| Teams, SharePoint, OneDrive (1TB) | Yes | Yes |
| Microsoft Intune MDM | Yes | Yes |
| Entra ID Plan 1 (Conditional Access) | Yes | Yes |
| Defender for Business (EDR) | Yes | No (add-on required) |
| Defender for Office 365 Plan 1 | Yes | No (add-on required) |
| Azure Information Protection P1 | Yes | Yes (P2) |
| Purview compliance & eDiscovery | Basic | Full |
| Windows 11 Enterprise licensing | No | Yes |
| User count limit | 300 max | Unlimited |
| Advanced audit & retention policies | No | Yes |
The security gap most people miss
The comparison that surprises people most: E3 does not include Defender for Business or Defender for Office 365. Microsoft 365 Business Premium does. If you move from Premium to E3 because you want the compliance features, you would lose your endpoint detection and email threat protection unless you buy them separately as add-ons, at which point the total cost climbs well above the Premium price.
To get E3-level compliance tools and Defender for Business and Defender for Office 365, you're looking at E3 plus two add-ons, which pushes the per-user cost close to E5 territory. For a business under 300 users, Business Premium is almost always the better value.
When E3 is the right choice
E3 makes sense over Business Premium in these situations:
- You have more than 300 users. Business Premium isn't available, so E3 is the entry point
- You need Windows 11 Enterprise licensing. E3 includes this; Premium does not. If you need features like Windows Sandbox, Credential Guard, or BitLocker management at scale, E3 unlocks those
- You have serious eDiscovery or compliance requirements. Regulated industries that need advanced audit logging, legal hold, and content search at scale get more from E3's Purview integration
- Your organisation already has Defender for Endpoint Plan 2 separately, in which case the Business-tier Defender that comes with Premium adds limited value
When Business Premium is the right choice
For the majority of UK small businesses under 300 users, Business Premium wins on value. You get Intune, Conditional Access, Defender for Business, and Safe Links and Safe Attachments all in one licence at a lower price than E3 plus the add-ons you'd need to match it on security.