Understanding Microsoft's complex license and version types

Paul Horn
May 8, 2024
5 min read

Microsoft is a lot like Baskin Robins

We will breakdown the differences between all the cone options and savory flavors. In general, there are three main areas; the Operating System, Office suites, and Microsoft 365 license levels.

Windows Operating System

This is something you probably are unfamiliar with but is very important. If you are a small business, you likely purchased your computer from a retail store (i.e., Best Buy, Walmart, etc.) or via an online store (i.e., Dell, HP, etc.). The default Operating System configuration on those computers is "Windows Home" and is configured for personal use, not business use. Now don't be discouraged as every one of those computers has the ability to be configured for business use. To keep things short Microsoft basically disabled and/or locked all the good security features needed for a business. All you need to do is go to the Microsoft store and upgrade your device to the Professional version. This is a one-time fee of $99 USD, and the license is tied to the specific device.  So, if you intend to get a new computer in a few months you might want to wait otherwise you will pay for this twice.

Want to check your version follow these simple steps:

1. Right click on your Windows icon

2. Select System

3. Look under Windows Specifications and to the right of Edition

4. If it says Professional or Business, you are all set

Want to upgrade too Professional? Follow these simple steps:

1. Right click on your Windows icon

2. Select System

3. Look down below Windows Specifications

4. Click on the blue hypertext that says "Change product key or upgrade your edition of Windows"

Once you upgrade to Professional your computer will need to restart. Afterwards you can take advantage of additional security features like BitLocker, registering or joining your device to AzureAD, etc.

Office Suites

This is something you probably don't do as often with Microsoft moving to more Software as a Service (SaaS) models, but you can still buy a traditional office suite license for Outlook, Word, Excel, etc.  If you are still doing this, you should strongly consider moving to Microsoft 365 as it still offers a full download on your device and is much more affordable.

Microsoft 365 Licenses

Just like the Operations Systems we talked about earlier you can quickly get lost looking at all the flavors of ice cream available here. There are plans for personal use and those for business use and unfortunately the security you need for a business resides in three licenses.  But first lets look at the most common licenses out there that you may already have or are looking to get.

Here is a list of the common personal use licenses:

- Microsoft 365 Personal

- Microsoft 365 Family

Here is a list of the common business use licenses:

- Microsoft 365 Business Basic (formerly Office 365 Business Essentials)

- Microsoft 365 Business Standard (formerly Office 365 Business Premium)

- Microsoft 365 Business Premium (formerly Microsoft 365 Business)

- Microsoft 365 Apps for Business (formerly Office 365 Business)

- Office 365 E1

- Office 365 E3

- Office 365 E5

- Microsoft 365 F1

- Microsoft 365 F3

- Microsoft 365 E3 (includes Office 365 E3)

- Microsoft 365 E5 (includes Office 365 E5)

- Microsoft 365 Apps for Enterprise (formerly Office 365 ProPlus)

The best bang for your buck (the vanilla and chocolate swirl) is the Microsoft 365 Business Premium license and is what we recommend for any small business. This generally runs you $22 a month per license. So, if you have two employees then you would need 2 licenses.  If you don't go with this license, then you better be using Microsoft 365 E3 or E5 which is significantly more expensive as the other flavors are of little to no value.

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Paul Horn
C|CISO, CISSP, CRISC, CISM, GCIH

Design amazing digital experiences that create more happy in the world.

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