Microsoft sells its 365 plans the way airlines sell fares: a wall of near-identical names, each a few pounds apart, each hiding one feature that turns out to be the one you needed. Business Basic, Business Standard, Business Premium, then a confusing jump to the Enterprise tiers. This guide cuts through it in plain English, so you buy the right seat for each person and stop paying for empty legroom.
The three plans almost every SME chooses between
For a UK business under 300 staff, the real choice is usually just three plans, and the differences are easy to hold in your head once you stop reading the feature grid.
- •Business Basic: the web and mobile versions of Office, plus Teams, Exchange email, OneDrive and SharePoint. No desktop apps installed on the PC. Cheapest per head.
- •Business Standard: everything in Basic, plus the full desktop Office apps (Word, Excel, Outlook and the rest) installed on up to five devices per person.
- •Business Premium: everything in Standard, plus a serious bundle of security and device-management tools - the same Intune and Entra protections larger firms pay a lot more for.
What you are actually paying for at each step
The price ladder makes more sense when you see what each rung adds. The jump from Basic to Standard buys you installed desktop apps - which matters enormously to some people and not at all to others.
The jump from Standard to Premium is the one most businesses underrate. It is not really an 'apps' upgrade at all; it is a security upgrade. Premium folds in device management, advanced threat protection for email, and identity controls that would otherwise be separate, pricier add-ons. For many firms it is the single best-value security decision they can make - we explain the device-management half of it in our guide to Microsoft Intune.
Web-only or full desktop apps?
The Basic-versus-Standard question comes down to one honest assessment: how heavily do your people lean on Word, Excel and Outlook?
If someone lives in spreadsheets all day - finance, analysts, anyone building complex models - they want the full desktop Excel, and Standard pays for itself in saved frustration. If someone mostly reads email, joins Teams calls and edits the occasional document, the web apps are genuinely capable and Basic is plenty. The smart move is to mix plans across your staff rather than buying one tier for everyone.
When you actually need an Enterprise (E) plan
Above the business plans sit the Enterprise tiers - E3 and E5. They are not automatically 'better'; they are aimed at larger or more regulated organisations, and they cost considerably more.
You genuinely need them in a few specific cases: if you have more than 300 users (the business plans cap there), if you need advanced compliance and data-governance features for a regulated sector, or if you want the top-tier security analytics in E5. For most SMEs, Business Premium delivers the security that matters at a fraction of E5's price. If your bill has crept up with add-ons, our Microsoft 365 licensing optimisation guide shows how to trim it.
Avoiding the common, costly mistakes
A handful of errors quietly inflate the average UK 365 bill, and all of them are avoidable once you know to look.
- •Over-licensing: putting everyone on the same expensive plan when frontline or occasional staff would be fine on Basic.
- •Under-securing: choosing Standard to save a few pounds, then bolting on security add-ons that cost more than Premium would have.
- •Forgetting it is not a backup: 365 protects the service, not your data from deletion - you still need proper backup, as the 3-2-1 rule explains.
- •Annual vs monthly: paying month-to-month is convenient but pricier; an annual commitment is cheaper if headcount is stable.