Microsoft 365 Business Plans: What You Actually Need to Know
I get some version of this question at least once a month. A business owner calls, they're ready to move to Microsoft 365, and they want to know which plan to buy. Business Basic at $6 per user per month? Business Standard at $12.50? Business Premium at $22? The pricing is about to change in July — Basic goes to $7, Standard to $14.50, Premium stays the same — so they want to get it right the first time.
I always ask the same question: what does your team actually do every day?
The Plans Break Down Like This
Business Basic ($6/user/month, rising to $7 after July 1, 2026) gets you the web and mobile versions of Word, Excel, PowerPoint, and Outlook. You get Teams with full functionality — meetings, chat, channels, file sharing. You get SharePoint for team sites and document libraries. You get OneDrive with 1TB per user. You get Exchange Online with a 50GB mailbox. You get Microsoft Forms, Planner, and Lists.
What you don't get: the desktop Office applications. No installed Word, Excel, PowerPoint, or Outlook on your computer. No Microsoft Bookings.
Business Standard ($12.50/user/month, rising to $14.50 after July 1, 2026) includes everything in Basic plus the full desktop Office suite — Word, Excel, PowerPoint, and Outlook installed on up to five devices per user. You also get Microsoft Bookings, Power Automate, Power Apps at the basic level, Clipchamp, and Loop.
For most small businesses, the meaningful difference between Basic and Standard is desktop applications. That's it.
Business Premium ($22/user/month — unchanged after July 1, 2026) includes everything in Standard plus Advanced Threat Protection through Defender for Business, Intune device management, Azure Information Protection, and Conditional Access through Entra ID P1.
Premium is for businesses handling sensitive data, regulated industries, or organizations with employees working on personal devices.
There's also Microsoft 365 Apps for Business at $8.25 per user per month — desktop Office apps only, no email, no Teams, no SharePoint. It only makes sense if you already have email and collaboration covered elsewhere. Most businesses skip it.
Where Teams Actually Land
A 12-person construction firm started on Basic. Within three months they upgraded to Standard. The problem wasn't email or Teams — it was Excel. Web Excel couldn't handle their project cost spreadsheets. They kept hitting "this file is too complex for Excel Online" errors. The upgrade cost them $78 more per month. Worth far more in time saved.
That's the pattern I see most often. Teams that start on Basic and live in desktop Excel upgrade to Standard within three to six months. Teams that work mostly in a browser and need email and collaboration stay on Basic and it works fine.
The Security Reality
A healthcare client stayed on Standard. They thought Premium was overkill for a five-person team. Ransomware hit through a compromised email attachment. Recovery cost $15,000 and three days of downtime. Premium would have cost $1,200 per year for their entire team.
Advanced Threat Protection isn't insurance you hope you never need. It's protection against something that will probably happen. The question is whether you want to pay for prevention or recovery.
If you're still weighing Basic vs Standard vs Premium as the July price increases approach, the Microsoft 365 pricing changes post has the real dollar breakdown.
The Question I Actually Ask Clients
What does your team actually do every day? If they live in desktop Excel — Standard. If they handle sensitive client data in a regulated industry — Premium. If they mostly work in a browser and need email and Teams — Basic might be exactly right.
I don't ask about their budget first. I ask about their work. The right plan fits how they actually operate, not how they think they should operate.
My Honest Answer
Business Standard hits the sweet spot for most teams under 50 people. Most businesses that start on Basic upgrade to Standard within three to six months anyway. Skip the friction and start where you'll land.
Premium makes sense when security isn't optional — healthcare, finance, legal, or any business where a breach costs more than the annual Premium subscription. For a five-person team, that's $1,200 per year. One incident costs more.
And if you're evaluating whether to add Copilot on top of any of these plans, here's what Copilot Business actually costs for small businesses.
Basic works when the team genuinely works in web applications and doesn't need desktop Office. That's fewer businesses than you'd think, but they exist.
Frequently Asked Questions
Q: Can I mix plans — some users on Basic, others on Standard? A: Yes, but it creates complexity. Different users have different capabilities. I usually recommend picking one plan for the whole team unless you have a clear reason to split.
Q: What happens to my data if I upgrade or downgrade? A: Your data stays. Upgrading adds features. Downgrading removes access to features but doesn't delete anything. You just can't use the desktop apps anymore if you go from Standard to Basic.
Q: Is the July price increase worth rushing to buy now? A: For Basic, you save $12 per user per year by buying before July. For Standard, you save $24 per user per year. For a 10-person team on Standard, that's $240 annually. Worth locking in if you're ready to move.
The right plan isn't the most expensive one. It's the one that fits how your team actually works.
Accurate as of February 2026. Microsoft updates its products and pricing regularly.
J. Scott Clark is the President and CEO of The 365 Collective, Inc., a Microsoft 365 consulting and training firm serving small and mid-sized businesses across healthcare, finance, construction, engineering, publishing, and retail.
Most of the tools your team needs are already in your subscription. The question is usually just whether anyone has taken the time to set them up. If you want a hand configuring it to fit how your business actually works, feel free to reach out.