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Navigating the World of Microsoft 365 Licences: Tips and Best Practices 

If you’re looking to get your organisation up and running with Microsoft 365, you probably visited the Microsoft website and looked at the different licence options available. Unfortunately, that’s where most people get overwhelmed (at least, that’s what our clients tell us). There are just so many options available, each slightly different but somehow similar to the others.  

How do you know which is the right one for your organisation? The last thing you want to do is go for too low a package and not equip your people with everything they need to be productive. On the other hand, you don’t want to waste money by purchasing products you’ll never use. 

At Doherty, we’re experts at eliminating that confusion and ensuring our clients have the correct M365 licences for their needs. In this article, we’ll share ten tips to help you navigate this complex world. Let’s get started. 

Tip 1 – Understanding Microsoft 365 Licence Types 

You can split Microsoft 365 licences into two sections, with different licence options available in each section (1). They are: 

  • Business – for organisations with under 300 users 
  • Enterprise – available for all organisations 

Incidentally, you can use up to 300 business licences in a bigger organisation. For example, if you have 500 people in your company, you could have 300 on business licenses and 200 on enterprise. 

Knowing which section to choose is pretty straightforward, but inside each section, it gets more complicated. Inside the business section, you can choose from: 

  • Business Basic – Beginners package with web and mobile of the most used M365 apps (including Outlook, Word, Excel and Teams) 
  • Business Standard – Everything in Business Basic, but with extra apps (including Loop and Clipchamp) and the option to add Copilot, Microsoft’s AI-powered assistant for an extra charge 
  • Business Premium – Adds cybersecurity solutions, including Intune (device management), a powerful next-gen AV and Windows endpoint licences 
  • Apps for Business – Access to desktop versions of Word, Excel, Outlook and PowerPoint 

In the enterprise section, there are even more options: 

  • Microsoft 365 E3 – A wide range of apps for desktop and mobile, security capabilities, Copilot available as an add-on 
  • Microsoft 365 E5 – The most complete bundle, including a host of security and compliance features, as well as Windows Enterprise 
  • Microsoft 365 F3 – A more basic package with only web and mobile apps, standard security. It enforces tight limits on mailbox sizes, so it’s only really intended for frontline staff or kiosks, or workers such as warehouse staff or delivery drivers who don’t use MS Office as part of their core role 

Each level also offers different file storage capabilities. 

With Microsoft 365 licences, you get what you pay for. At the current RRP prices as of March 2024, Business Basic is £4.90 per user per month, while Enterprise E5 is £52.40 per user per month. Prices change based on how long you commit for, so if you sign up for 12 months, you’ll get a better deal than if you commit for just one. Therefore, it’s essential that you get the right package for your business.  

Tip 2 – Assessing Your Needs 

When deciding which Microsoft 365 licence to purchase, the first – and easiest – question to answer is how many users are in your business. If you’re under 300 users, you’ll need an enterprise license, but if you’re under 300 users, an enterprise package might suit your requirements better. 

Next, are your people wholly office-based or will they need to access their M365 apps from home or on the go? Not all licences offer desktop versions of the apps, which could limit some people’s productivity. Adding to this, which apps do you definitely need in your organisation? If you only want the basics and can get by without Clipchamp (Microsoft’s video editing tool), you could save money with a more basic package. 

Finally, assess your security needs. If you’re going to use your M365 package to create and share business-sensitive data, it’s probably best to go for a package that delivers a robust level of security. 

Tip 3 – Licensing Models  

So far, we’ve talked about business and enterprise Microsoft 365 licences, but depending on the nature of your organisation, there may be some other models that are relevant: 

  • Frontline – M365 licences for customer-facing workers with a focus on communication tools 
  • Government – Plans for government organisations, emphasising security and compliance 
  • Nonprofit – M365 packages for staff at mission-based organisations, often free or discounted 

These licences are worth investigating if your organisation falls into any of these categories. 

Tip 4 – Bundles vs A La Carte 

Now you understand the Microsoft 365 licence you need in your organisation; the next question is how many licences to purchase.  

Best practice is to buy exactly the number of licenses you need. A good partner can provision licenses almost instantly, so if you have new staff starting, you can get them set up straight away.  

We also recommend a combination of 12-month and monthly licences, so you have some flex on price. For example, a 100-user firm could choose to have 90 licenses on a 12-month commit, with the remaining 10 on a monthly rolling contract. They can then increase or reduce their licenses on a monthly basis, but still have the lower price for the majority of their licenses. 

Tip 5 – Subscription vs Perpetual  

Microsoft 365 business and enterprise packages are all subscription-based. Perpetual licensing is essentially a thing of the past. 

You pay a price per user per month, based on an annual or monthly commitment. The advantage here is that you have the flexibility to add and remove licences based on your business needs. The downside is that you have to budget for ongoing payments over time. 

Tip 6 – Licensing Compliance  

Microsoft 365 licences come with terms and conditions (2) that you must stick to. Failure to do so could disrupt the M365 service in your organisation. 

The first – and most obvious – condition is that you pay your subscription bills on time. Paying by direct debit is the surefire way to ensure compliance here. 

Next, you must abide by Microsoft’s code of conduct that you will use its services in good faith. That means you’re not allowed to do anything illegal with Microsoft software, send spam or illegal content, or infringe on copyrighted material, amongst other things. 

There are also many other rules surrounding matters, including access, use with external applications, and contracting, so make sure you read the Ts and Cs before you commit. 

 Tip 7 – Licence Management 

To get the best ROI from our Microsoft 365 licences, it’s best practice to monitor usage and make alterations when necessary.  

If you have too many licences with many not being used, it could be time to slim down your commitment to minimise waste and optimise costs.  

You should also make sure that when people leave your organisation, you remove them from the M365 licence profile database. You can then reassign that licence to someone else, or wait until you can remove it and stop paying for it entirely. 

This can be challenging for organisations where employees leave and join in large numbers. However, a good IT partner or internal IT department will ensure nothing is lost when someone leaves. They can convert the person’s mailbox to a free ‘shared mailbox’ and capture any data in OneDrive before removing the license. At Doherty, we’re experts at this. Our customers simply leave ‘leavers’ to us. 

Tip 8 – Licence Optimisations 

Further to licence management, you can go more granular and check what apps your people actually use. If you’re paying for a premium licence but your people are only using Outlook, Word and Excel, maybe you could save money with a more basic licence package.  

The Microsoft portal provides usage statistics, helping you understand if any apps are being under-utilised. 

Tip 9 – Staying Up-to-Date with Licensing Changes 

Microsoft regularly changes the terms and conditions of their licensing in reaction to new events in the marketplace. This can be a challenge for organisations that want to stay up-to-date but are busy focusing on other areas. 

To assist you, Microsoft has a Licensing News page on its site (4), where it publishes updates to its licensing agreements. Check this page regularly to ensure you stay ahead. 

Tip 10 – Seeking Professional Assistance 

Microsoft 365 licences are complex. Getting it right involves balancing your business size, functions and technology requirements. You want to get it just right so your employees have the right tech at their fingertips without wasting your budget.  

Fortunately, there are experts out there to help organisations like yours get the most from their Microsoft 365 environment. They’ll take the time to understand your organisation’s unique needs, then recommend the right M365 licence package for you. Once you’re up and running, they can even help you monitor and manage it, helping you boost ROI at renewal time and beyond. 


Navigating the world of Microsoft 365 licences is a massive challenge, but you don’t need to do it alone. 

At Doherty Associates, we help clients thrive in today’s modern workplace. As part of our expert service, we’ll help you make the right licensing choice for your organisation. We’ll also help you get set up with Microsoft 365, ensuring efficient data migration, robust security and a focus on what is needed. Then, once you’re up and running, we’ll deliver ongoing management, taking care of the tech so you can concentrate on your business. We’re also a Tier 1 Microsoft Cloud Solutions Provider. 

To find out more, visit

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