Microsoft Office 365 E1 vs E3 vs E5

Microsoft Office 365 comes in three different flavours for Enterprise: E1, E3, and E5. With each successive level, you get more features — but what is included, exactly?

Below, I’ll give you an introduction to the three versions, a detailed comparison table, some special considerations for different industries, and a video overview.

Microsoft Office E1

O365 E1 is the “lightest” version of the Enterprise-level plans. The features included in E1 are

  • Email and Calendars via Microsoft Exchange
  • Enterprise Social with Yammer
  • Communication and team sites with SharePoint
  • OneDrive for Business with 1TB cloud storage
  • Delve for content discovery
  • StaffHub and Planner to manage daily staff tasks
  • MS Stream
  • Teams (which has adopted components and functions of Skype for Business)

Within the E1 license you also receive web versions of Office applications, including Word, Excel, PowerPoint, Outlook, OneNote, and Publisher.

One thing to note is that the E1 plan does not allow installation of applications on devices — for instance, laptops, smartphones, or tablets — and therefore a constant Internet connection is required to use this plan.

E1 Pricing: Office 365 E1 licenses cost $8/user/month USD ($10.20 CAD).*

Microsoft Office E3

Though the E3 plan is slightly more expensive than the E1 tier, the added features justify the investment. Within the O365 E3 plan, each user gets the full license and is allowed to install the applications on up to 5 desktops, 5 tablets, AND 5 smartphones.

So if your remote workers have weak Internet connectivity at home, or even if they go to a coffeeshop where the WiFi security isn’t up to standards, they can still stay productive. They aren’t dependent on having a good connection 24/7.

The E3 plan includes everything mentioned in the E1 licenses along with some extras:

  • MS Office Suite: Users will always receive the most updated versions of Word, Excel, PowerPoint, OneNote, Outlook, OneDrive for Business, Teams, Access, and Publisher.
  • Cross-Platform Installation: Users now have the benefit of installing Office applications across devices (Windows, Mac, Android, tablets, smartphones).
  • Cloud Storage: O365 E1 comes with 1TB of cloud storage for OneDrive for Business (which is more than enough in most cases). However, with O365 E3, you get 1TB by default and the ability to increase it to 5TB and even 25TB if needed.
  • Data Loss Prevention (DLP): DLP allows you to comply with business standards and industry regulations in terms of protecting sensitive information and preventing data leaks outside of the organization. DLP is not available in E1.

E3 also includes other data management functions like archiving, rights management, and document-level encryption, advanced emailing, access control for emails and documents, intelligent search and discovery features that allow you to easily pick up required content from Office applications, SharePoint, and Delve.

E3 Pricing: Office 365 E3 licenses cost $20/user/month USD ($26.60 CAD).

Before I get into the details of E5, let me also mention that in addition to this blog post, we’ve created a tool that can generate an Office 365 recommendation for you based on your response to a short questionnaire. It will generate a score for each of the seven different versions of Office 365, plus provide a few other things to think about. You can try it out here.

Microsoft Office E5

O365 E5 is the super-powered version of Office and is available for a small increase in cost. In my opinion, the main addition to the E5 license is the fully loaded security features and some analytic tools and voice capabilities. You get everything included in E3 along with a few more benefits:

  • Advanced Security & Information Protection: The E5 license takes measures to protect your data from threats like phishing and zero-day malware. In this way, users of E5 stay protected from threats in attachments and links. DLP assures the safety of your content.
  • Analytics Tools: E5 is the only Enterprise plan that offers analytics tools such as MyAnalytics and PowerBI Pro for data analysis and visualization.

Other additions include Advance eDiscovery, access controls and control encryption key, Advanced Threat Protection, Threat Intelligence for proactive cybersecurity and actionable insight, O365 Cloud App Security, PTSN conferencing capabilities, Advanced Data Governance and Customer Lockbox.

E5 Pricing: Office 365 E5 licenses cost $35/user/month USD ($46.60 CAD).

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Comparison of Microsoft Office E1, E3, and E5

Overall, the biggest difference between Office 365 E1 and E3 is that E3 is better for remote workers. The biggest difference between E3 and E5 is that E5 has extra security and analytics.

Here’s a detailed breakdown of pricing and the key Office 365 features for each Enterprise plan:

Feature Office E1 Office E3 Office E5
Pricing $8/user/month USD
($10.20 CAD)
$20/user/month USD
($26.60 CAD)
$35/user/month USD
($46.60 CAD)
Microsoft Office Apps Online Included Included Included
Office Client/Desktop Apps Included Included
Power BI Pro License Included
Power Apps and Power Automate Included Included Included
Teams – IM, Voice, Video Chat Included Included Included
Email and Calendar Included Included Included
Yammer, Video, Sharepoint Included Included Included
OneDrive for Business, Delve Included Included Included
Security & Backup Features Exchange Online Protection, Archive + Data Loss Prevention, Rights Management, eDiscovery + Advanced Threat Protection, Customer Lockbox
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Which One is Right for You?

Selecting the right Office 365 version is one of the most important steps before migrating over to the cloud. However, keep in mind that because these are subscription type licenses, you are never locked in on the license you choose. In essence, you can mix and match, downgrade or upgrade your licenses depending on your changing business needs.

Choosing the version of Office 365 Enterprise that’s right for you is pretty simple for most companies: If you want access to the Office applications on your own devices, even when you’re not connected to the Internet, then you need E3 or E5. And you only really need E5 if you need to have advanced security features, a Power BI Pro license, or the ability to make phone calls. If you still can’t decide, look at the “Security and Backup Features” row in the table above and check out the various increases in functionality. There’s a little more to it than that (see the Office 365 page for more) but those are the basics.

However, based on my experience with many customers, there are also some special considerations in different industries:

Education institutions may qualify for the Office 365 education discount. Ask a Microsoft partner to find out if you are eligible.

Field Service organizations often choose E3 or E5 because of the cross-platform experience for mobile workers.

Financial institutions need to be sure that the data they share with clients and customers is secure. So they often choose E3 or E5.

Government and Health Care organizations are often keen on getting the best available security, so they often choose the E5 plan.

Manufacturing businesses often find that digitizing purchase orders with the Office suite can create major efficiency gains on the shop floor. Project managers often use Microsoft Project, but that is not part of any O365 license anymore. Instead, there are add-ons available. For pricing please reach out to me directly, because there are different plans, etc.

Natural Resources companies often prefer the flexibility of E5, because they tend to have high staff turnover. With E5 licenses, their new workers can use whatever tool is right for them on day 1, without having to ask IT to change things.

Real Estate workers often prefer E3 and E5 because they can work on the go with the cross-platform experience. They don’t have to say to a potential buyer, standing in a house they love, “Let me call you back about this.”

Startups tend to prefer E1 at the beginning (to keep costs low), but often find that E3 is better as they grow because of the importance of remote workers.

Video Overview of Office 365 Licenses

For a video explaining Office 365 license options with many more details and examples, watch my recorded webinar.

Get Office 365 from a Microsoft Partner Dedicated to Your Success

If you have further questions, or if you’re ready to buy Office 365, contact us with the form below.

If you purchase Office 365 with Encore as a partner, you pay the same amount per license and you gain extra benefits:

  • Our experienced cloud consultants can help you with the internal challenges of deploying the cloud. This can be highly important if you’re struggling with the transition to remote work.
  • Encore provides immediate access to elevated support levels via Encore’s Tier-1 Microsoft status.


* All pricing is subject to change without notice. Contact Encore for the most current pricing.

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