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Comparison of Microsoft licenses—A Comprehensive Guide

August 17, 2023 1.2K views

Microsoft Office is a suite of productivity software developed by Microsoft Corporation. It is one of the most widely used office suites worldwide and is available for both Windows and macOS operating systems. However, the reader might be unsure about Microsoft Office and want to compare Microsoft licenses with other software licenses.

That’s what we are going to do in this article. Read on as we introduce what Microsoft is and how to compare Microsoft licenses with other software licenses. Moreover, we will recommend the perfect software for you to use.

Part 1. Understanding Microsoft Licensing

#1. What is Microsoft licensing

MS Office personal license


Microsoft licensing refers to the terms and conditions under which Microsoft software and services are distributed and used by individuals and organizations. Microsoft offers a variety of licensing models to accommodate different user needs and usage scenarios. The licensing model determines how users can legally acquire, install, use, and distribute Microsoft products.

However, Microsoft licensing can be complex, with different options and variations depending on the product, the size of the organization, and specific business requirements.

#2. Microsoft Office 365 license types

Microsoft Office 365 offers a diverse range of license types, each tailored to meet specific user needs and organizational requirements. From small and medium-sized enterprises to large corporations, Microsoft has designed various licensing options to accommodate different user scenarios, ensuring that organizations can select the most suitable license based on their size, specific needs, and budget.

Here are a few of the main license types:

Microsoft 365 Business Basic

This license is designed for small and medium-sized businesses and provides access to web versions of Office applications, Microsoft Teams for collaboration, and Exchange Online for email hosting. It offers essential productivity tools and cloud services for businesses to enhance communication and teamwork.

Microsoft 365 Business Standard

Suitable for businesses that need the full suite of Office applications, this license includes desktop versions of Word, Excel, PowerPoint, and Outlook, along with Microsoft Teams and Exchange Online. It provides a comprehensive productivity solution for businesses of all sizes.

Microsoft 365 Business Premium

This license is targeted at businesses requiring advanced security and device management features. It includes all the features of Business Standard, along with additional security features like Azure Information Protection and Microsoft Intune for device management.

Office 365 E1, E3, and E5

These licenses are designed for larger enterprises with varying needs. Office 365 E1 offers web versions of Office applications and Microsoft Teams, while E3 includes full desktop versions of Office applications and additional features like data loss prevention and advanced security. E5 provides the most comprehensive set of tools, including advanced security, compliance, and analytics features.

Office 365 F1 and F3

MS Office frontline plans


Office 365 F1 is aimed at frontline workers, offering web Office apps, Teams, and basic security features. Office 365 F3 caters to organizations with strict compliance requirements, providing advanced security and compliance features.

Part 2. Microsoft Office 365 License Comparison: Business Plans Vs. E5, E3, and E1

Understanding the differences between the Business Plans and the E5, E3, and E1 plans is crucial for organizations to select the most suitable license based on their requirements and budget.

Let’s list a tutorial to compare the key features and functionalities of these license types to help you make an informed decision for your business.

Microsoft 365 Business Basic

MS 365 business basic


  1. Web versions of Office apps: Access online versions of Word, Excel, PowerPoint, and Outlook.

  2. Microsoft Teams: Collaborate and communicate with team members through chats, calls, and online meetings.

  3. Exchange Online: Secure and reliable email hosting for your business.

  4. OneDrive for Business: Store and share files securely in the cloud.

Microsoft 365 Business Standard

MS 365 business standard


  • All features of Business Basic: Web versions of Office apps, Teams, Exchange Online, and OneDrive for Business.

  • Desktop versions of Office apps: Install Word, Excel, PowerPoint, and Outlook on up to 5 PCs/Macs, tablets, and smartphones per user.

  • Microsoft Teams: Enjoy advanced collaboration features, including meeting recordings and 1 TB of cloud storage per user.

Microsoft 365 Business Premium

MS 365 business premium


  • All features of Business Standard: Web and desktop versions of Office apps, Teams, Exchange Online, and OneDrive for Business.

  • Advanced security features: Protect your business data with Azure Information Protection, Microsoft Intune, and Windows Defender ATP.

  • Device management: Use Microsoft Intune to manage and secure devices and apps within your organization.

Office 365 E1

MS 365 E1 license”


  • Web versions of Office apps: Access online versions of Word, Excel, PowerPoint, and Outlook.

  • Microsoft Teams: Collaborate and communicate with team members through chats, calls, and online meetings.

  • Exchange Online: Secure and reliable email hosting for your business.

Office 365 E3

MS 365 E3 license


  • All features of E1: Web versions of Office apps, Teams, and Exchange Online.

  • Desktop versions of Office apps: Install Word, Excel, PowerPoint, and Outlook on up to 5 PCs/Macs per user.

  • Advanced security and compliance: Implement data loss prevention, advanced threat protection, and eDiscovery capabilities.

Office 365 E5

MS 465 E5 license purchase


  • All features of E3: Web and desktop versions of Office apps, Teams, and Exchange Online.

  • Advanced security and compliance: Enjoy additional features such as Azure Information Protection, Microsoft Intune, and Windows Defender ATP.

  • Advanced analytics and communication: Utilize advanced analytics in Power BI and advanced voice capabilities in Teams.

Part3.How to work Microsoft Licensing to beat your IT budget

Managing Microsoft licensing effectively is crucial for organizations aiming to optimize their IT budget while maintaining the necessary software and services for their operations. Let’s see how you can achieve this:

  1. Understand Microsoft Licensing Options
    Familiarize yourself with the various Microsoft licensing options, such as Office 365 Business Plans, Enterprise Plans (E5, E3, E1), and other licensing models like Volume Licensing and Software Assurance. Understand the differences between each license type and how they align with your organization's needs.

  2. Explore Volume Licensing
    For larger organizations, consider exploring Volume Licensing options. These agreements can offer cost savings for bulk license purchases and provide more flexibility for deployment and software management.

  3. Consider Cloud Migration
    Explore the potential cost savings and benefits of migrating your on-premises Microsoft services to the cloud. Cloud-based solutions like Azure and Microsoft 365 can provide greater scalability and cost-effectiveness.

Part 4. How to edit your document for Free?

If you have got any Microsoft Office documents on your hand but you don’t want to purchase a license, you don’t have to worry at all. There is still hope and some better alternatives that can help you open and edit Microsoft Office documents for free. One of such alternatives is WPS Office. It is a modernized and powerful office tool App that can open, edit, and convert your Microsoft Office documents.

Let’s see how you can use WPS to edit your document, that too, without paying any subscription fee.

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WPS Office- Free All-in-One Office Suite
  • Use Word, Excel, and PPT for FREE, No Ads.

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  • Microsoft-like interface. Easy to learn. 100% Compatibility.

  • Boost your productivity with WPS's abundant free Word, Excel, PPT, and CV templates.

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Steps to edit Word/Excel/PowerPoint in WPS

Step 1: There are two ways you can open an MS Office document in the WPS Office. One way is to go to the document you want to open and right-click it. In the options, go to “Open with” and select “WPS Office”.

MS Word document options


Step 1 (Alternative): You can open WPS Office on your PC and go to the extreme left pane. Here, you will find the “Open” option. Click on it, and you will be provided with multiple options to open a file from wherever you want. Browse that location on your PC and open the file you want to edit.

WPS Office open file option


Step 2: Your file will be opened in the WPS Office. Here, we have opened an MS Word file WPS Word editor. Using the WPS Word editor, we can edit this however we want and then save it.

WPS Word edit file


How to Download WPS Office on Your Device?

Step 1: Go to the WPS official website and look for the Download option on the top header. Click on this option.

WPS download option


Step 2: By clicking the Download option, you will be taken to the Download page of WPS Office. Scroll down this page to find options to download WPS Office for multiple devices and OS platforms. Click on any device you want to download WPS Office for, and your file will start downloading.

WPS Office download buttons


Step 3: Once you click on any of these buttons, your download will start in the browser, and you will be able to see the download progress in the tab in the upper right corner.

WPS Office downloaded


Step 4: Once the download has been completed, you can find the installation file in the download folder of your device and open it to start the installation.

WPS Office .exe file

FAQs

Q1.Why partner with SHI for your Microsoft Software Licensing?

If you want expert licensing advice and want to get the full value from your investment in Microsoft Office, SHI has a team of Microsoft licensing and cloud experts who will give you the best advice regarding which type of license is good for your organizational needs, so you don’t even overspend a penny.

Q2. What does a Microsoft Office lifetime license mean?

A Lifetime Microsoft Office license means you will only have to pay for the Microsoft Office license once instead of paying a monthly fee. This version of Office is also called a one-time payment version.

Microsoft License Comparison with WPS Office

Earlier in this article, we saw how Microsoft Office licenses differed from one another. We analyzed different types of licenses, including those for small businesses, large businesses, enterprises, and frontline workers. We also looked at how to work out Microsoft Licensing to beat your IT budget within the organization. But among all this, we found a new and improved way to edit MS Office documents, that is WPS Office.

WPS is the best alternative to Microsoft Office, which is a complete Office Suite with a Word editor, Spreadsheet editor, and a Presentation editor, the same as Microsoft Office. All the functions and features present in MS Office are a part of WPS. But the only difference is that you don’t have to pay a single cent to purchase and use WPS Office Suite on your PC. This makes WPS Office the best office toolkit for both office and home use.

15 years of office industry experience, tech lover and copywriter. Follow me for product reviews, comparisons, and recommendations for new apps and software.