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Grow Your Business Technology

Which Microsoft 365 Platform Is Right for Your Business?

Microsoft
Credit: Dennizn/Shutterstock

Microsoft programs have been essential tools for small business owners since the dawn of Microsoft Works in 1986. Microsoft Office was released in 1989, quickly overtaking WordPerfect and Lotus. That productivity suite, including Word, Excel and PowerPoint, is now ubiquitous. And Microsoft keeps improving and expanding its business functions to add security features, mobile device management, contacts management and many more helpful characteristics. The number of options for companies can be downright dizzying.

Today, Microsoft makes it a bit difficult to understand the exact difference between the packages it offers. There are a few comparative charts on its website, but differentiating between the multitude of services in different packages – all with seemingly the same name – can be a big task in and of itself.

Small business packages

All of Microsoft's business packages are available for up to 300 users, making them ideal for small businesses. There are four main packages to consider:

Office 365 Business Essentials
Microsoft
  • Price
    $5 per user per month
  • Web versions of Microsoft Office apps
    X
  • Web-based services: Exchange, Sharepoint, OneDrive, Teams, Yammer, Skype for Business
    X
  • Office desktop apps: Word, Excel, PowerPoint, OneNote, Outlook, Access
    None
  • Access to additional SMB apps
    None
  • IT security features
    None
Office 365 Business
Microsoft
  • Price
    $8.25 per user per month
  • Web versions of Microsoft Office apps
    X
  • Web-based services: Exchange, SharePoint, OneDrive, Teams, Yammer, Skype for Business
    Onedrive only
  • Office desktop apps: Word, Excel, PowerPoint, OneNote, Outlook, Access
    X
  • Access to additional SMB apps
    None
  • IT security features
    None
Office 365 Business Premium
Microsoft
  • Price
    $12.50 a user per month
  • Web versions of Microsoft Office apps
    X
  • Web-based services: Exchange, SharePoint, OneDrive, Teams, Yammer, Skype for Business
    X
  • Office desktop apps: Word, Excel, PowerPoint, OneNote, Outlook, Access
    X
  • Access to additional SMB apps
    X
  • IT security features
    None
365 Business
Microsoft
  • Price
    $20 per user per month
  • Web versions of Microsoft Office apps
    X
  • Web-based services: Exchange, SharePoint, OneDrive, Teams, Yammer, Skype for Business
    X
  • Office desktop apps: Word, Excel, PowerPoint, OneNote, Outlook, Access
    X
  • Access to additional SMB apps
    X
  • IT security features
    X

These four packages are ordered from least features to most and, not coincidentally, least expensive to most. Microsoft builds up features as the packages increase in price. So, for example, Microsoft 365 Business (the most expensive option) has all the features of Office 365 Premium plus some other services.

[RELATED: Microsoft 365 Business: Surprising Features Baked In]

This package is the least expensive and includes mostly web-based features. If you sign up for Essentials, you won't get any of the desktop Office applications – PowerPoint, Word, Excel, Access, Outlook or OneNote – but you will have access to web versions of all these programs except OneNote and Access. Essentials focuses mainly on web applications and cloud-based services. The package includes Exchange for email, OneDrive and Skype for Business. In addition to these three collaboration tools, Microsoft provides Essentials subscribers access to SharePoint for team file sharing, Microsoft Teams for intra-office chats, and Yammer, a companywide social media network.

Essentials is a great tool for a business with a high-speed internet connection looking to move quickly and efficiently with few apps. It's also great for very small companies – maybe only a few people total – looking to keep everything web-based. This service is comparable to Google's G Suite, which features similar web-based apps and email clients for communication, although it lacks programs like Teams and Yammer.

365 Business is basically the opposite of Essentials – all the web-based services in Essentials are nowhere to be found in Office 365 Business. Instead, users have access to desktop versions of Outlook, Word, Excel, PowerPoint, OneNote and Access. While Office 365 Business does come with Outlook, it doesn't come with access to the business-class email hosting of Exchange. This means that you can use Outlook to run your current email, but you can't set up an email specifically for your business.

This package does have access to the online storage system OneDrive, but not SharePoint. Both these programs can be used to the same end – to store documents in a cloud-based service and share them with co-workers. But SharePoint offers more features that separate it from OneDrive, like Dashboards to feature company news and announcements, Sites to streamline a team's documents into one area, and Workflows to set up notifications for things like document editing. The nature of Office 365 Business makes it great for small businesses looking only to reap the benefits of Microsoft's core apps. Without access to collaboration tools like Teams and SharePoint or business-class email hosting, Office 365 Business is a basic app-based subscription package.

This package blends the web services of Essentials and the desktop access of Office 365 Business into one subscription option that features the full range of both apps and services. In addition to all of the features listed in both Essentials and 365 Business, Business Premium members have access to other apps and services geared toward small businesses, like Microsoft Bookings, an online appointment scheduling service. This plan is ideal for slightly larger companies that rely on appointments with clients for success (think contractors, dentists, movers, stylists, etc.). Business Premium is a great option for larger teams that need access to the collaboration tools of the web-based services as well as the desktop apps.

This plan includes every feature of 365 Business Premium, while adding new apps – like Microsoft Connections and Microsoft 365 Invoicing – and including security features and mobile device management tools. Microsoft wanted to create a single solution for small business owners looking to use all the Microsoft apps and service with increased IT security. Connections is an email marketing tool that syncs with all other areas of the Microsoft 365 Business platform. Users can build newsletters, create announcements or monitor referrals. Invoicing is an app that syncs with QuickBooks and can be used to create custom-made, professional company invoices.

The other big addition with Microsoft 365 Business is the heightened security features. Subscribers will automatically be upgraded to Windows 10 when they sign up, and Windows Defender will be turned on with automatic updates. Admins can create user groups within the admin dashboard and manage information access among employees. Microsoft 365 Business also comes with built-in mobile device management features, such as requiring a PIN to access work accounts and preventing work email from crossing over with personal email. Microsoft 365 Business allows small business owners to use all of Microsoft's tools while also integrating security features that may be necessary for a growing business. These features can be used with or without a full-scale IT department, as Microsoft created the admin dashboard so that individual business owners could use it.

Deciding which of these packages is best for your business starts with assessing your business needs. Consider the size of your business, different features you need and use, and how your business could benefit from new programs.

The benefit of these subscription packages is that they can grow with your business, so it may be best to start off with fewer features at a lower price as opposed to a ton of apps and services. Most commitments are on a yearly basis, but you can upgrade your plan at any time by using the Switch Plans button in the admin center. The most important thing is to sign up for a service that includes apps you and your co-workers will actually use. Programs like Yammer or SharePoint do no good if they aren't used, so if you don't need these programs, it may be worth it to choose a subscription package without them at a lower rate.

The other thing to note is that these subscription packages come with access to the Microsoft app store as well. So, if you're a Business Premium member, you can still use apps such as Connections or Invoicing by downloading them from the app store. However, less-expensive subscription options may not provide the same kind of access to the app store as a Business Premium subscription.

One of the benefits of Microsoft's small business packages is a lot of variety. Microsoft has many powerful programs that can benefit your business, and they all come in different packages so you can choose what is best for you. Approach the subscription process with the mentality that these programs and services should grow with your business; you should not sign up for the most expensive package and hope your business grows into it. Flexibility is one of the best aspects of Microsoft's plan, so be sure to use it to your advantage.    

Matt D'Angelo

Matt D'Angelo is a B2B Tech Staff Writer based in New York City. After graduating from James Madison University with a degree in Journalism, Matt gained experience as a copy editor and writer for newspapers and various online publications. Matt joined the Purch team in 2017 and covers technology for Business.com and Business News Daily. Follow him on Twitter or email him.