Microsoft 365 is one of the largest recurring technology bills at most small businesses, and it grows quietly. New hires get licenses, people leave and keep theirs, and the plan someone picked years ago becomes the plan everyone gets.
Most companies with 10 to 100 employees are on the right family of plans and the wrong mix. Here is how the business plans differ and where to look for savings.
The business plans at a glance
Business Basic
Email, Teams, SharePoint, OneDrive and the web and mobile versions of Word, Excel and PowerPoint. No desktop apps. A good fit for staff who work mostly in email and a browser.
Business Standard
Everything in Basic plus the desktop Office apps. The usual choice for office staff who build documents and spreadsheets all day.
Business Premium
Everything in Standard plus device management (Intune), conditional access (Entra ID P1), Defender for Business endpoint protection and information protection tools. Often the plan that cyber insurance questionnaires point toward.
Apps for business
Desktop Office apps and OneDrive without business email. Rarely the right main plan, but useful in specific cases.
The business plans are capped at 300 users. Above that, or for advanced compliance needs, the Enterprise plans (E3 and E5) come into play. Most companies our size do not need them. Some plans are now also sold with and without Teams, so check which version you are on.
Where licensing money leaks
- Licenses still assigned to people who left
- Paid licenses on shared mailboxes, which usually do not need one under 50 GB
- One plan for everyone when the right plan differs by role
- A separate tool that duplicates something already in your plan, with no clear reason
- Monthly term licenses on staff who have been with you for years
Annual and monthly terms
Under Microsoft's current licensing model for partners, an annual term is cheaper per seat but fixes the seat count for the year. You can add licenses at any time, but you generally cannot reduce them until the term renews, apart from a short cancellation window right after purchase.
Monthly term licenses cost more per seat but can be reduced at the end of any month. Paying monthly for an annual term also costs a little more than paying for the year up front. For most companies a mix works best: annual terms for the stable core of the team and monthly terms for seasonal or high turnover roles.
Review your licensing in an afternoon
Export the license list
In the Microsoft 365 admin center, export active users with their assigned licenses.
Match it to your team
Compare the export against your current employee list and flag anyone who has left.
Group by role
Sort people into email only, office staff and anyone who handles sensitive data or admin access.
Check terms and dates
Under Billing, note the term, billing frequency and renewal date of each subscription before you change anything.
How Level2 helps
We review the export, recommend the right plan for each role, move subscriptions to the term that fits and time changes around your renewal dates so you are not paying twice. See Microsoft 365 licensing or start with the free renewals audit.
Questions we hear about this
If you handle sensitive data, have staff on personal devices, or your cyber insurer asks about device management and conditional access, Premium is often worth it. If your IT provider already supplies equivalent tools separately, compare the total cost before deciding.
Yes. You can assign Basic, Standard and Premium to different people in the same organization, as long as the business plans stay within the 300 user cap.
Microsoft sets the list price, so the per seat difference between sources is usually small. The bigger savings come from the right plan mix, the right term and removing licenses nobody uses.
A common approach is to convert it to a shared mailbox so the data stays available, then remove the license. Check your retention needs first if the mailbox may matter for legal or compliance reasons.