Microsoft 365 E3 vs E5
The most common enterprise licensing question. E3 is the enterprise baseline. E5 is E3 plus the advanced security, compliance, analytics, and voice layer. The decision is whether you need that layer.
The real difference
E3 and E5 share the same core: the enterprise Office apps, Windows Enterprise, Exchange, SharePoint, Teams, and baseline security and compliance. Everything E5 adds sits on top of that.
E5 layers on four things: the Defender Suite (XDR-grade threat protection across endpoints, identity, email, and cloud apps), the Purview Suite (advanced compliance, eDiscovery, insider risk), Power BI Pro analytics, and Teams Phone with audio conferencing. If you would buy any two or three of those as add-ons to E3, E5 is usually cheaper and cleaner than assembling them.
Side by side
| Microsoft 365 E3 | Microsoft 365 E5 | |
|---|---|---|
| Enterprise Office + Windows Enterprise | Yes | Yes |
| Advanced threat protection (Defender Suite, XDR) | Baseline only | Included |
| Advanced compliance (Purview Suite) | Baseline only | Included |
| Analytics (Power BI Pro) | No | Included |
| Teams Phone + audio conferencing | Add-on | Included |
| List price (per user / month) | About $36, rising to $39 on July 1, 2026 | About $57, rising to $60 on July 1, 2026 |
List prices are estimates in USD on an annual commitment and change over time. New enterprise customers buy the no-Teams SKU plus Teams Enterprise at about $5.25 separately. Confirm current pricing with your Microsoft partner.
When to pick E3
You need enterprise apps, Windows Enterprise, and baseline security and compliance at scale, without XDR, advanced compliance, or voice. Add the Defender or Purview Suite later if a specific need appears.
When to pick E5
You need real threat protection (XDR), advanced compliance for regulated data, analytics, or Teams calling. Buying those piecemeal on E3 usually costs more than moving to E5. If you are also rolling out Copilot, the Entra Suite, and Agent 365, look at E7, which bundles E5 with all three.
Answer four questions and get your exact licenseFree. No sign-up. Real prices and when to upgrade.Common questions
Do I need E5 for advanced security?
The advanced security stack (Defender Suite, XDR) is included in E5. On E3 you can add the Defender Suite as a separate add-on, but once you also want advanced compliance or voice, E5 is usually the better value.
What does E5 add for compliance?
The Purview Suite: advanced eDiscovery, insider risk management, information protection, and records management, beyond the baseline retention and eDiscovery in E3.
What comes after E5?
E7 bundles E5 with Microsoft 365 Copilot, the Entra Suite, and Agent 365 in one SKU.