Microsoft 365 Plans and License Review for SMBs

The three Microsoft 365 Business plans (Basic, Standard and Premium) differ mainly in two ways: whether you get the desktop Office apps, and whether you get device management and advanced security. Basic centers on email, Teams, cloud storage and browser-based Office. Standard adds desktop Word, Excel, PowerPoint and more. Premium adds device management (Intune), Entra ID P1 with Conditional Access, Defender for Business and other security features. You do not need to put everyone on one plan, because plans can be mixed within a single tenant. The biggest savings usually come not from downgrading plans but from finding and removing licenses nobody uses. This article lays out the differences, how to choose, price guides, a license review routine and annual-term pitfalls, aimed at companies without a dedicated IT person. (Checked as of October 31, 2026.)

Microsoft 365 comes in consumer, Enterprise and Business families. The Business family is for organizations with up to 300 users. The basic choices are Basic, Standard, Premium and Apps for business, which includes only the Office apps. A single tenant (the container for your company accounts) can hold at most 300 users on Business licenses. Beyond that, a move to the Enterprise family is needed.

- Business Basic: email, Teams, OneDrive, SharePoint and browser and mobile Office. Desktop Office is not included
- Business Standard: everything in Basic plus desktop Word, Excel, PowerPoint, Outlook and more, installed on the PC
- Business Premium: everything in Standard plus device management (Intune), Entra ID P1 (Conditional Access and more), Defender for Business, Defender for Office 365 and other security features
- Apps for business: mainly desktop Office apps and OneDrive. It does not include an Exchange mailbox

Versions of Basic, Standard and Premium without Teams are also available. They suit companies that already use another chat and video tool, and they cost less per user. Availability and prices change over time, so check the admin center or your reseller's screen when purchasing.

The main differences are summarized below. Feature details can change, so check the official comparison page before you sign.

Mailbox size is the same on all three plans. The real differences are whether people install Office on their PCs, and whether the company manages the safety of devices and sign-ins. Thinking along those two axes makes the choice easier.

From July 1, 2026, Microsoft revised the prices of its Business plans. Microsoft's licensing announcement (USD) shows Business Basic rising from 6 to 7 dollars and Business Standard from 12.50 to 14 dollars, with Business Premium at 22 dollars. Existing customers move to the current price list at renewal (a Microsoft Q&A answer explains that renewals are recalculated at the latest prices).

In yen, Microsoft's official Japan pages (checked October 31, 2026) show the following monthly-equivalent prices per user (annual commitment billed annually, auto-renewing, excluding tax). Items marked "check the official site" could not be confirmed in this review.

- These are monthly equivalents for annual commitments billed annually. Monthly billing on an annual commitment can raise the unit price
- Premium's security components are also sold standalone. Microsoft's Japan page lists Defender for Business at 449 yen, Intune P1 at 1,199 yen and Entra ID P1 at 1,049 yen (monthly equivalent, billed annually), which helps if only some staff need stronger protection
- Add-ons such as Copilot are priced separately. Check their price individually if you need them
- Prices exclude tax; consumption tax is added on top

If you are unsure which plan to pick, answer the following two questions for each user.

People who run Excel with complex formulas or macros, open large files, fine-tune print layouts or work offline are likely to need desktop Office, so Standard or higher is the candidate. People who mostly read email, join Teams meetings and view or lightly edit shared documents can often manage in the browser, and Basic works for them. If you are unsure, try switching a few people to Basic and move them back if it is inconvenient. Under an annual commitment, however, you cannot reduce licenses midterm, so keep the trial small.

Premium helps when staff reach company data from personal phones or take laptops out of the office, when you want to wipe data remotely after a loss, or when business partners ask for proof of security measures. Intune can enforce encryption and passwords on devices, and Conditional Access can block sign-ins from unknown devices outside the company. If everyone uses only company-issued PCs and takes them out rarely, correctly configuring Standard's basic features, such as multi-factor authentication, is enough for many companies for now. Premium has more features, but also more setup and operations work, so weigh that as well.

Microsoft 365 assigns licenses per user. Within one tenant you can mix Basic, Standard and Premium by person. For example: Standard for office staff, Basic for field staff, Premium for the owner and accounting. Note, though, that Premium security features apply only to people who have that license assigned. If administrators or people handling sensitive data do not hold it, gaps appear in protection. Decide first whether you want to raise the security level for everyone or protect only certain people, then plan the assignments.

Business and Enterprise licenses can also coexist in one tenant, but management gets more complicated, so companies of 300 or fewer are usually easier to run on the Business family alone. If you are weighing Google Workspace as well, see the comparison of Google Workspace and Microsoft 365.

You can work through the review in the admin center (admin.microsoft.com), signed in with an account that has administrator rights such as global admin or billing admin. The following order is easy to follow.

In the admin center, open Billing and then Your products. You will see each product with the number of licenses purchased, the number assigned and the renewal date. Look for duplicate subscriptions to the same product and for any you do not recognize. Also check whether billing is annual or monthly, and whether auto-renewal is on. If you buy through a reseller, reductions and cancellations go through the reseller.

If purchased and assigned numbers differ, the gap is licenses you pay for that nobody uses. If you bought 10 and assigned 8, two are idle. Such gaps often appear when you delete the account of someone who left. Assigning the idle license to a new hire avoids a new purchase. If idle licenses persist, they are candidates for reduction at renewal.

In Users and then Active users, look for accounts of people who have left or have not been used for a long time. Accounts that keep a license cost money, and because they can still sign in while unused, they are also a security risk. Comparing against HR's list of leavers prevents omissions. If email or OneDrive data must be handed over, move it first and remove the license afterward. The full flow is covered in the offboarding IT checklist.

Under Reports and then Usage, the admin center shows activity for email, Teams, OneDrive and Office app activations. The last activity date reveals people who hold a license but have not used email or Teams for months. Anyone assigned Standard who never installed desktop Office is a candidate to switch to Basic. Reports are only a guide, and some shared business accounts are used just a few times a year, so confirm with the person or department before deciding.

Under the current commercial model for Microsoft 365 business subscriptions (often called NCE), choosing an annual term fixes a one-year commitment. The basic rules are as follows.

- Licenses can be added at any time, even midterm. The added amount appears prorated on the invoice
- Licenses can be reduced only within 7 days of purchase or renewal. After that, you cannot reduce them until the next renewal
- Canceling an annual term generally gives no refund for the remaining period. Cancellation within the 7-day window is an exception
- If an annual term is billed monthly, canceling midterm can incur a cancellation fee
- If auto-renewal stays on, the subscription renews automatically at the new price and the same quantity

In other words, the 7 days right after renewal and the weeks before the renewal date are the best times to review quantities and plans. If you notice a leaver's license only after renewal, you keep paying for it that year. Start the review one to two months before renewal and reach a conclusion by the day before. Details can differ depending on whether you bought directly from Microsoft (MCA), through a reseller (such as CSP) or under an older agreement. Check your agreement type under billing account type and partner relationships in the admin center.

Checking renewal dates and taking stock of contracts applies to other SaaS as well. To review them together, see how to review SaaS subscription costs.

- Leavers' licenses remain: the account was deleted but the quantity was not reduced, so idle licenses are still paid for
- Everyone is on Standard or Premium: in reality half the staff could manage in the browser
- A license on a shared address: a shared mailbox may save the license
- Auto-renewal left unattended: the same quantity as last year renews without a check

Of these, neglected leaver licenses and over-specified plans are the patterns most companies find. Taking stock together with hardware reduces omissions. See getting started with IT asset management for a way to do it.

This is only an example to show the thinking, and actual amounts depend on your contract. Assume a 10-person company had given everyone Business Standard. Unit prices use the official prices above (with Teams, monthly equivalent, ex-tax): Standard 2,098 yen, Basic 1,049 yen, Premium 3,298 yen.

In this example, two leavers' licenses are removed, and of the remaining eight, three people who mostly use email and Teams move to Basic. The result is a difference of about 7,300 yen a month and about 88,000 yen a year. Putting everyone on Premium costs about 1.6 times the current amount. Still, people who need Premium need it, so do not decide on price alone. Balance the scope you need to protect against the cost.

For costs of moving to Microsoft 365 or switching from another service, see Microsoft 365 migration costs.

- At least two people can sign in to the admin center (the company is fine if one leaves)
- Contracts are summarized on one page: product, quantity, renewal date, billing method
- You checked for a gap between purchased and assigned licenses
- No accounts of leavers, people on leave or test users remain
- The usage report shows nobody has been completely inactive for months
- You know who actually uses desktop Office (and who could move to Basic)
- You considered whether people using personal phones or taken-out laptops need Premium
- No shared address holds a paid license
- Auto-renewal settings are checked and the next renewal date is on the calendar
- Changes are processed with the reseller or in the admin center before the renewal date