Deciding between Microsoft 365 E3 and E5 goes beyond just picking a license—it’s a strategic choice that can significantly influence your security stance, IT operations, and overall financial health. In this guide, we’ll dive into the key differences in security features, help you figure out when to opt for E3 or E5, and show you how thoughtful license planning can help you save money and simplify your processes.
Microsoft 365 E3: The Solid Security Foundation
E3 offers essential tools that address the fundamental aspects of identity, device, and information protection. This makes it an excellent option for businesses looking for secure collaboration without the burden of heavy compliance or threat exposure.
With Microsoft 365 E3, you get Microsoft Entra ID P1, which supports single sign-on (SSO), multi-factor authentication (MFA), and group-based access control—key components for ensuring secure access. It also includes Microsoft Defender Antivirus, which provides built-in endpoint protection for Windows environments, and Microsoft Intune, which empowers IT teams to manage mobile devices and applications confidently. Purview Data Loss Prevention (DLP) offers basic policies covering files, emails, and chats for data protection. To help organizations continuously enhance their security posture, E3 features Microsoft Secure Score—a handy tool for monitoring and improving overall security.
E3 is frequently preferred for mid-sized businesses, educational institutions, and organizations that depend on specialized security tools. It strikes a balance by offering flexibility without requiring an over-investment in features that might not be utilized.
Microsoft 365 E5: Advanced Defense for Modern Threats
E5 is designed for organizations navigating complex regulatory landscapes or dealing with ongoing cyber threats. It enriches your security framework with tools that enhance prevention, detection, and response capabilities.
Microsoft Entra ID P2, an upgrade from P1, brings in Privileged Identity Management (PIM) and risk-based conditional access, giving you finer control over privileged roles and authentication based on threats. Defender for Endpoint boosts endpoint security with strong detection and response features to combat advanced malware and zero-day vulnerabilities. Defender for Identity monitors user behavior to spot identity-related threats, particularly in hybrid setups. At the same time, Defender for Cloud Apps sheds light on shadow IT and promotes safe usage of cloud applications. Defender for Office 365 Plan 2 protects your email and collaboration tools from phishing and targeted attacks. Lastly, Purview Insider Risk Management focuses on monitoring potentially risky user actions, prioritizing compliance, and privacy.
E5 licenses can be incredibly effective when implemented thoughtfully, especially in sectors where data loss, insider threats, or regulatory scrutiny can lead to significant financial or reputational damage.
Which Should You Choose: E3 or E5?
When choosing between E3 and E5, it’s important to know that not every organization really needs E5—but for those that do, it can be a game changer. The right license for you hinges on a few key factors:
- Your current threat landscape – Are you facing issues like targeted phishing, credential theft, or attempts at lateral movement?
- Regulatory obligations: Do you need to comply with standards like HIPAA, PCI-DSS, GDPR, or NIST?
- Your existing tool stack: Are you already utilizing external platforms like SIEM, CASB, or DLP? If so, E3 might be a better fit to enhance those investments.
- Future roadmap: Are you looking to streamline your tools, reduce vendor complexity, or transition to Microsoft-native solutions?
E3 is a solid choice when integrating with third-party tools and having a lower risk profile. On the other hand, E5 shines when you want a native, integrated security solution that minimizes tool sprawl and makes security governance a breeze.
Cost Optimization: Consolidate or Complement?
Licensing decisions are all about the money.
For organizations leveraging E5 strategically, there’s a chance to eliminate third-party tools, like pricey SIEMs, endpoint protection platforms, or insider risk management tools, leading to some serious cost savings. The beauty of E5 lies in its all-in-one design, which means easier billing, fewer integrations, and a more straightforward approach to incident response.
However, if your team has already invested heavily in top-notch security platforms, sticking with E3 might give you more room to maneuver. Some organizations even take a mixed approach, opting for E5 only in high-risk departments (like finance, legal, or IT) while keeping the rest of the company on E3. At The IT Strategists, this approach is what we refer to as “Profile Licensing.”
Make Licensing a Strategic Advantage
Choosing the right Microsoft 365 plan isn’t just a matter of checking a box—it’s about creating a security framework that grows alongside your business.
At The IT Strategists, we’re here to partner with you to:
- Assess your current risk exposure and compliance needs.
- Align your existing tools with Microsoft license offerings.
- Spot chances for license consolidation and ways to save costs.
- Develop a roadmap that connects your licensing strategy with your security objectives.
Let’s simplify your licensing decisions and optimize your cloud security investment.