The short answer
- Business Premium (£16.90) already includes Intune, Entra ID P1, Conditional Access, Defender for Business, Defender for Office 365 P1, DLP, sensitivity labels and Autopilot. It is capped at 300 users.
- Microsoft 365 E3 (£33.50) removes the cap and swaps in the Enterprise editions: Microsoft 365 Apps for Enterprise, Exchange Online Plan 2 and OneDrive Plan 2 (same 100 GB mailbox and 1.5 TB archive, with more storage and holds available), the full Intune Plan 1 and Plan 2, Defender for Endpoint Plan 1, Windows Enterprise with 36 months of support per release, and Windows Server CAL rights.
- The difference is £16.60 a month, £199.20 a year, per user. For 300 users that is £59,760 a year, so moving everyone to E3 for a handful of enterprise features is rarely the right call.
- Most organisations between 300 and 1,000 users do best with a mix: E3 for the people who need it, Business Premium up to its cap, and Frontline plans for deskless staff.
- Business Premium
- £16.90 per user a month (max 300 users)
- Microsoft 365 E3
- £33.50 per user a month (no cap)
- Difference
- £16.60 a month, £199.20 a year, per user
- Windows support per release
- 24 months (Premium) vs 36 months (E3)
- Prices
- UK list, annual commitment, ex VAT (13 Oct 2026)
Two plans that look alike
Microsoft 365 E3 is the plan most enterprises hold and Business Premium is the plan Microsoft built for companies under 300 users, so it is natural to assume the Enterprise plan is a superset. In terms of the headline products it is: both include the desktop Office apps, Exchange, Teams, SharePoint and OneDrive, Intune, Entra ID P1 with Conditional Access, Windows Autopilot, Defender for Office 365 Plan 1, data loss prevention, sensitivity labels, retention policies and eDiscovery (standard).
The differences are in the editions of those products, the limits around them, and one place where the smaller plan is better.
What Microsoft 365 E3 adds
No user cap. This is the reason most companies move. Business Premium stops at 300 users per plan; E3 has no limit.
Enterprise editions of the apps and services. Microsoft 365 Apps for Enterprise instead of Apps for Business (the same programs, with group policy support and the Enterprise update channels), Exchange Online Plan 2 instead of Plan 1 (the mailbox stays at 100 GB and the archive at 1.5 TB, but Plan 2 adds in-place and litigation hold), OneDrive Plan 2 (storage above 1 TB on request) and SharePoint Plan 2.
The full Intune. E3 includes Intune Plan 1 and Plan 2, which adds Intune Remote Help and advanced analytics. Business Premium includes the Business edition of Intune Plan 1, which covers the everyday management most companies use.
Windows Enterprise. E3 includes the Windows Enterprise upgrade with 36 months of support for each annual Windows 11 release and the Windows Server CAL rights that let E3 users access on-premises Windows servers without separate client access licences. Business Premium's Windows Business upgrade supports each release for 24 months and has no server CAL rights.
Defender for Endpoint Plan 1. E3 includes the Enterprise endpoint product, but only Plan 1. See the next section.
Where Business Premium is better
Business Premium includes Defender for Business rather than Defender for Endpoint Plan 1. Defender for Business is the small-business edition of Plan 2: it includes endpoint detection and response, automated investigation and remediation and threat and vulnerability management. Microsoft 365 E3's Plan 1 has the antivirus, attack-surface reduction and device control but none of the detection and response layer. An E3 organisation that wants it must step up to E5 (£51.60) or buy the Defender add-on suite.
So a 250-person company on Business Premium has better endpoint security than a 2,500-person company on E3, for half the price per user. That surprises people, and it is the reason a Business Premium tenant should think twice before "upgrading" everyone.
The price difference
At UK list prices the gap is £16.60 per user a month, or £199.20 a year. Moving 300 users from Business Premium to E3 adds £59,760 a year; moving 500 users adds £99,600. Those sums buy a great deal of E5 or add-on licensing for the few people who need the extra features, which is why the right answer is usually a mix.
How to mix them
A company of 450 people does not need 450 E3 licences. The usual pattern is: Business Premium for up to 300 knowledge workers, Microsoft 365 E3 for the remainder (often the IT, finance and leadership groups who benefit from the Enterprise editions), Business Basic or Office 365 E1 for people who only need email and Teams, and Frontline F1 or F3 for shift and field staff. Intune, Entra ID and Defender manage all of them from the same portals.
Only when the organisation passes roughly 1,000 users, or an enterprise agreement makes E3 cheaper than list, does putting everyone on E3 start to make financial sense. At that point the question becomes E3 or E5.
See it for yourself
Open Business Premium and E3 side by side in the comparison tool. Switch off "Only differences" to see the long list of features they share, or add Office 365 E3 and E5 to the comparison to see the full ladder.
Frequently asked questions
What does the 300-user cap actually mean?
Each Microsoft 365 Business plan can be assigned to at most 300 users in a tenant. The cap applies per plan, so you can hold 300 Business Premium plus 300 Business Basic. Once a single group of users would exceed 300, the people above the cap need an Enterprise plan. Microsoft does not require you to move everyone at that point.
Is Defender for Business worse than Defender for Endpoint Plan 1?
In most respects it is better. Defender for Business, which is in Business Premium, includes endpoint detection and response, automated investigation and threat and vulnerability management, features that Microsoft puts in Defender for Endpoint Plan 2 for enterprises. Microsoft 365 E3 includes Plan 1 only, which is next-generation antivirus and attack-surface reduction without the detection and response layer. Organisations that want that on E3 need E5 or the Defender add-on suite.
Do we lose anything moving from Business Premium to E3?
Two things. Defender for Business is replaced by Defender for Endpoint Plan 1, which has no endpoint detection and response (see above). And the Business Premium suite add-ons (the Defender and Purview suites for Business Premium) do not carry over; their Enterprise equivalents are priced for E3 and E5. Everything else is the same or better.
Can Business Premium and E3 be mixed in one tenant?
Yes, and it is the normal pattern for companies between 300 and about 1,000 users. The same Intune, Entra ID and Defender portals manage both sets of users. Policies can be applied by group, so the difference in licence is invisible to staff.
Is Office 365 E3 a cheaper alternative?
Office 365 E3 (£23.30) has no user cap and the Enterprise apps, but no Intune, Entra ID P1, Conditional Access or Defender for Endpoint. If you need to manage and secure devices, it is a step backwards from Business Premium, not forwards. It suits organisations that license Windows and manage devices another way.