Microsoft 365 Business Plans Compared: Which Is Right for Your Team?

Choosing between Microsoft 365 business plans is one of the first decisions UK businesses face when setting up or reviewing their IT. The three main options — Basic, Standard, and Premium — are genuinely confusing if you’re not sure what separates them. Here’s a plain-English comparison of what each plan includes, what it costs, and which one most UK small businesses actually need.

The three Microsoft 365 business plans at a glance

All three plans are designed for organisations with fewer than 300 users and cover the vast majority of UK SME requirements.

Microsoft 365 Business Basic is the entry-level option. It gives your team a proper business email address through Exchange, access to Teams for video calls and chat, SharePoint for document sharing, and 1 TB of OneDrive storage per user. The catch: Office apps — Word, Excel, PowerPoint, Outlook — are only available in a browser or on mobile. There are no desktop installations.

Microsoft 365 Business Standard adds full desktop Office apps installed on up to five devices per user. That’s the main difference from Basic — and it’s significant for most businesses whose staff spend their working day in Outlook, Word, and Excel on a Windows PC.

Microsoft 365 Business Premium includes everything in Standard plus a serious security layer: Microsoft Defender for Business (enterprise-grade endpoint protection), Intune for mobile device management, and advanced threat protection for email. It’s the plan that turns Microsoft 365 from a productivity tool into a managed security platform.

How much does Microsoft 365 cost for UK businesses?

Pricing is per user, per month, on an annual commitment, excluding VAT. Microsoft increased prices across its business plans in July 2026.

As a guide for 2026, Business Basic costs around £5–£6 per user per month, Business Standard around £11–£12, and Business Premium around £17–£19. The exact figure depends on whether you’re buying direct from Microsoft or through an authorised reseller. Many managed IT providers include Microsoft 365 licensing as part of a wider support contract, sometimes at a lower net cost than buying directly from Microsoft.

What’s the difference between Basic and Standard?

The difference is desktop apps. Standard includes Word, Excel, PowerPoint, and Outlook installed on up to five devices per user. Basic does not — you get browser and mobile versions only.

For most UK small businesses with office-based or hybrid-working staff, Standard is the practical minimum. The browser-only restriction in Basic catches people out quickly, particularly with Outlook, where the installed client and the web version feel meaningfully different in daily use. If your team relies on Outlook for email management — folders, rules, calendar, flagging — the desktop version matters.

When does Business Premium make sense?

Premium is the right choice when cybersecurity is a genuine concern — which, for most UK businesses handling client data, it should be.

The additional cost over Standard is modest, but the security capability is substantial. Microsoft Defender for Business protects every device against ransomware, phishing, and threats that standard antivirus won’t catch. Intune lets you remotely lock or wipe a device if it’s lost or stolen — useful when staff use laptops outside the office. For businesses in regulated sectors (legal, financial, healthcare) or those tendering for government contracts, Premium often provides the controls needed to meet compliance requirements including Cyber Essentials.

The practical IT industry view is that most UK SMEs would be better served by Premium than Standard, even if Standard looks like the more comfortable cost. A single ransomware incident costs far more than years of Premium licences.

Which plan do most UK small businesses choose?

Most small businesses start on Standard and upgrade to Premium later — often after a security incident, or when a client or insurer asks for evidence of their security controls. The stronger approach is to treat Premium as the default from day one and avoid retrofitting security at greater cost later.

If your team is small and genuinely works browser-first — a startup that operates entirely in Teams and web apps, for example — Basic is a reasonable starting point. But for most UK small businesses with Windows PC users who need full Office, Standard is the sensible baseline and Premium is the smarter long-term choice.

Getting the right Microsoft 365 setup for your business

Choosing the right plan is only part of the picture. How your Microsoft 365 environment is configured — security defaults, sharing permissions, multi-factor authentication, email filtering — matters as much as which licence you’re on. A good managed IT provider handles licensing, configuration, and ongoing management as part of a single contract, so you’re not left navigating Microsoft’s admin centre alone.

Compare IT support providers and get free, no-obligation quotes.