Last Updated: Jan 12, 2024

Choosing the right Microsoft 365 plan for your organization can significantly impact its productivity, security, and overall efficiency. This article aims to help you make the best choice between Microsoft 365 E3 and E5, two popular plans with differing features and costs. We’ll compare the features, pricing, deployment, migration, and real-life use cases, taking into account your organization’s unique needs and challenges. By the end of this article, you’ll have a clear understanding of which plan can help you unlock your business potential and thrive in the ever-evolving digital landscape.

Feature Comparison

When evaluating Microsoft 365 E3 and E5, it’s crucial to understand the differences in their features. Both plans provide a comprehensive suite of productivity apps, but E5 offers advanced security, compliance, and analytics capabilities that may be essential for certain organizations.

Feature Microsoft 365 E3 Microsoft 365 E5
Price per user/month (annual commitment) $35.00 $57.00
Seat Cap Unlimited Unlimited
Office Apps Install Office on 5 devices Install Office on 5 devices
Office Online Yes Yes
Excel Power Query and Power Pivot Yes Yes
Sway Yes Yes
Infopath Yes Yes
Use Office on Remote Desktop Yes Yes
Onedrive Storage Unlimited Unlimited
Audio-conferencing features No Yes
Advanced compliance features No Yes
Advanced analytics No Yes
Advanced retention policies for email No Yes
Advanced Threat Protection No Yes
Customer Lockbox No Yes
PSTN capabilities (Skype for Business Cloud PBX) No Yes

Core productivity apps

Both E3 and E5 offer the core set of productivity apps, including Word, Excel, PowerPoint, OneNote, Outlook, and Teams. These tools help your employees collaborate effectively and efficiently, regardless of their physical location. In addition, both plans include SharePoint, OneDrive, and Exchange for seamless file sharing, storage, and email management.

Security and compliance

Security is a critical concern for any organization, and this is where E5 truly shines. While E3 provides basic security features like multi-factor authentication and data loss prevention, E5 takes security to the next level. With E5, you get advanced threat protection, intelligent security management, and additional compliance features like privileged access management, customer lockbox, and advanced eDiscovery. Microsoft’s Security and Compliance offerings are continually evolving to address emerging threats, making E5 an ideal choice for organizations with heightened security needs.

Advanced analytics and AI

Microsoft 365 E5 also includes advanced analytics and AI tools not available in the E3 plan. Power BI Pro, an interactive data visualization tool, enables your employees to make data-driven decisions. Additionally, E5 offers advanced AI capabilities, such as MyAnalytics and Workplace Analytics, which provide insights into productivity and collaboration trends across your organization. These features can help you optimize your team’s performance and achieve your business objectives more efficiently.

Key takeaway:

  • E3 and E5 share the same core productivity apps, making them suitable for organizations looking for reliable collaboration tools.
  • E5 provides superior security and compliance features, making it a better choice for organizations with advanced security requirements.
  • E5’s advanced analytics and AI tools can empower your organization to make informed decisions and optimize performance.

Pricing Breakdown

Understanding the pricing structure for Microsoft 365 E3 and E5 is crucial for making an informed decision that aligns with your organization’s budget constraints.

Plan Monthly Cost per User Annual Cost per User
Microsoft 365 E3 CAD $50.80 CAD $609.60
Microsoft 365 E5 CAD $77.30 CAD $927.60

Prices are in Canadian dollars and do not include the applicable tax. Numbers are accurate as of January 12, 2024. To see the latest pricing, visit the official pricing page.

Microsoft 365 E3 pricing

The E3 plan is priced at CAD $50.80 per user per month, billed annually. This cost includes all core productivity apps, basic security features, and 1 TB of OneDrive storage per user. It’s a cost-effective option for small and medium-sized organizations or those with limited security needs.

Microsoft 365 E5 pricing

The E5 plan comes at a higher price point of CAD $77.30 per user per month, billed annually. While it might seem like a significant jump in cost, the additional features like advanced security, compliance, analytics, and AI capabilities may justify the investment for organizations with complex security requirements or those looking to leverage data-driven insights for decision-making.

Calculating the true cost of ownership

When comparing the pricing of E3 and E5, it’s essential to consider the total cost of ownership (TCO). TCO includes not only the subscription fees but also the cost of implementing:

  • additional security measures,
  • training,
  • and support.

In some cases, the advanced features and tools in the E5 plan can lead to significant cost savings by reducing the need for third-party security solutions or streamlining business processes.

Key takeaway:

  • When evaluating the cost of E3 and E5, consider the total cost of ownership, including potential cost savings from advanced features.

Pros & Cons

Microsoft 365 E3


  • Lower cost per user
  • Core productivity apps and collaboration tools
  • Basic security features


  • Limited security and compliance tools
  • No advanced analytics and AI features

Microsoft 365 E5


  • Advanced security and compliance features
  • Powerful analytics and AI tools
  • Enhanced communication capabilities


  • Higher cost per user
  • Potentially unnecessary features for smaller organizations

Purchasing and Assigning New Licenses in Microsoft 365

Transitioning between Microsoft 365 licenses, such as upgrading from E3 to E5, involves purchasing and assigning new licenses to users in your organization. This section will guide you through the process of acquiring and allocating new licenses, ensuring a smooth and efficient transition.

Purchasing New Licenses

Once you’ve decided on the appropriate licensing plan, you can purchase the required number of new licenses through the Microsoft 365 admin center or directly from Microsoft. If you’re a non-profit organization or an educational institution, be sure to check for eligibility and apply for discounted pricing through Microsoft’s non-profit and education programs.

Assigning Licenses to Users

After acquiring the new licenses, you can assign them to your users through the Microsoft 365 admin center. To do this, follow these steps:

  1. Sign in to the Microsoft 365 admin center using your admin credentials.
  2. Navigate to the “Users” section, and select “Active users.”
  3. Find the user you want to assign a new license to, and click on their name.
  4. In the user’s settings, click on the “Licenses and Apps” tab.
  5. Check the box next to the new license you want to assign, and click “Save changes.”

It’s important to ensure that the right users receive the appropriate licenses based on their roles and responsibilities within the organization. You can also mix and match licenses to optimize the allocation of resources and provide users with the tools they need to perform their tasks effectively.

Add-ons Available for Microsoft 365 E3 and E5

As we’ve explored the core offerings of Microsoft 365 E3 and E5 plans, it’s important to note that there is a range of add-on services available to further enhance functionality and tailor these services to meet the specific needs of your organization. In this section, we will delve into the various available add-ons, discussing their benefits and how they can be integrated into your existing Microsoft 365 E3 or E5 plan to provide a more customized experience.

Add-on Description
Audio Conferencing Allows users to join meetings by phone, in addition to using a computer or mobile device. Included in Office 365 E5 and Microsoft 365 E5.
Azure Information Protection Provides advanced data protection and classification features. Included in Microsoft 365 E3 and E5.
Calling Plan Enables users to make and receive phone calls in Microsoft Teams. Requires an additional plan purchase (either Domestic or International) and is included in Office 365 E5 and Microsoft 365 E5.
Exchange Online Plan 2 Provides advanced email and calendar features, including unlimited storage and archiving. Included in Microsoft 365 E3 and E5.
Power Apps Allows users to create custom business apps without coding. Available as an add-on for Microsoft 365 E3 and E5.
Power Automate Enables users to automate repetitive tasks and workflows. Available as an add-on for Microsoft 365 E3 and E5.
Power BI Pro Provides advanced data visualization and business intelligence features. Available as an add-on for Microsoft 365 E3 and E5.
Project Online Enables project management and collaboration. Available as an add-on for Microsoft 365 E3 and E5.
Stream Provides secure video sharing and management. Available as an add-on for Microsoft 365 E3 and E5.
Visio Online Plan 2 Enables users to create and share professional diagrams. Available as an add-on for Microsoft 365 E3 and E5.
Yammer Enterprise Provides social networking and collaboration features for organizations. Available as an add-on for Microsoft 365 E3 and E5.

Other Notable Add-Ons:

  • Microsoft 365 E5 Security: By adding the Microsoft 365 E5 Security suite to your existing E3 solution, you can further strengthen your organization’s security posture. This robust suite offers advanced threat protection, intelligent security analytics, and integrated security management features that help defend against cyber threats and safeguard sensitive information.
  • Microsoft 365 E5 Compliance: Microsoft 365 E5 Compliance provides tools to help your organization assess compliance risks, govern and protect sensitive data, and respond to regulatory requirements. This add-on service enables businesses to proactively manage their compliance landscape and streamline the process of meeting legal and regulatory obligations.
  • Microsoft Syntex: Microsoft Syntex is an add-on that leverages advanced AI and machine teaching to amplify human expertise, automate content processing, and transform content into knowledge. With Microsoft Syntex, your organization can efficiently manage and process large amounts of data while gaining valuable insights from it.
  • Microsoft Viva Topics: Microsoft Viva Topics uses AI-driven content organization and discovery to facilitate information access and knowledge management within your organization. By enabling seamless content discovery, employees can easily locate and leverage relevant information to drive productivity and innovation.
  • Windows 365: Windows 365 is a cloud-based service that allows users to securely stream their Windows experience, including apps, content, and settings, from the Microsoft cloud to any device. This add-on service provides enhanced flexibility and accessibility, allowing employees to work from anywhere with an internet connection.
  • Microsoft Viva Insights (manager and leader insights): Microsoft Viva Insights provides data-driven insights into work patterns, employee wellbeing, and business outcomes, while maintaining privacy safeguards for individuals. Managers and leaders can leverage these insights to make informed decisions and optimize organizational productivity and wellbeing.
  • Microsoft Viva Learning: Microsoft Viva Learning seamlessly integrates access to learning content into the tools and platforms employees already use daily. This add-on service promotes continuous learning and development by making educational resources readily available, supporting employee growth and skills development.
  • Microsoft Priva Privacy Risk Management: Microsoft Priva Privacy Risk Management helps organizations identify and protect against privacy risks, as well as automate and manage subject requests at scale. This add-on service simplifies privacy risk management and enables businesses to efficiently comply with data protection regulations.

Evaluating Your Needs

To make the right choice between Microsoft 365 E3 and E5, it’s essential to assess your organization’s unique needs and challenges.

Assessing your organization’s size and complexity

Larger organizations or those with complex operational structures may benefit from the advanced features and tools in the E5 plan. However, smaller organizations or those with a more straightforward operational setup might find that the E3 plan meets their needs sufficiently.

Understanding your security requirements

Take a close look at your organization’s security requirements and determine if the basic security features in E3 are sufficient or if you need the advanced security and compliance tools offered in E5. Industries with strict compliance regulations, such as healthcare, finance, or government, may find the E5 plan better suited to their needs.

Considering your budget constraints

Lastly, consider your organization’s budget and the cost-benefit of upgrading from E3 to E5. While E5 offers additional features and tools, it also comes at a higher price point. Weigh the potential benefits against the costs to determine if the investment in E5 is justified.

Key takeaway:

  • Evaluating your organization’s needs, security requirements, and budget constraints is crucial for making an informed decision between E3 and E5.

Unlock Your Potential with the Right Plan

Choosing the right Microsoft 365 plan is essential for your organization’s success. By evaluating the features, pricing, deployment, migration, and real-life use cases of E3 and E5, you can make an informed decision that aligns with your unique needs and challenges.

Taking the next steps

Once you’ve made a decision, follow the deployment and migration steps outlined above to ensure a smooth transition to your chosen plan. Provide your users with the necessary training and support to maximize the benefits of your new Microsoft 365 subscription and unlock your organization’s full potential.

Frequently Asked Questions

Can I upgrade from Microsoft 365 E3 to E5 at any time?

Yes, you can upgrade from Microsoft 365 E3 to E5 at any time. To proceed with the upgrade, you’ll need to purchase the required number of E5 licenses for the users you want to upgrade. After acquiring the licenses, you can assign them to your users, allowing them to access the advanced features and capabilities of the E5 plan without any issues.

Are there any discounts available for non-profits or educational institutions?

Microsoft offers discounted pricing for non-profit organizations and educational institutions through their non-profit and education programs. You can find more information and apply for these discounts on the respective program pages.

What is the difference between Microsoft 365 E5 and Microsoft 365 E5 Security?

Microsoft 365 E5 Security is a standalone security and compliance plan that can be added to an existing Microsoft 365 E3 subscription. It includes most of the advanced security features available in the full E5 plan but does not include the advanced analytics, AI tools, or additional communication capabilities. Organizations that want to enhance their security without upgrading to the full E5 plan might consider adding the E5 Security plan to their E3 subscription.

What happens to my existing data and settings when I change my Microsoft 365 license?

When you change or upgrade your Microsoft 365 license, such as transitioning from E3 to E5, your existing data, emails, documents, and settings are preserved. The process of changing licenses primarily involves providing users with access to additional features and tools based on their new plan, rather than modifying or removing existing data. However, it’s always a good practice to create backups of your critical data before making any significant changes to your organization’s software or services to ensure data safety and recovery in case of any unforeseen issues.

Can I mix and match licenses within my organization?

Yes, you can mix and match Microsoft 365 licenses within your organization. This flexibility allows you to assign the appropriate plan to users based on their specific needs and roles, ensuring that you only pay for the features each user requires. This approach can be cost-effective, as you can provide advanced features like those in the E5 plan to users who need them, while assigning the more affordable E3 plan to other users who may not require all the additional features of the E5 plan.



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Written By:


Softlanding is a long-established IT services provider of transformation, professional services and managed IT services that helps organizations boost innovation and drive business value. We are a multi-award-winning Microsoft Gold Partner with 13 Gold Competencies and we use our experience and expertise to be a trusted advisor to our clients. Headquartered in Vancouver, BC, we have staff and offices in Toronto, Montreal and Calgary to serve clients across Canada.

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