What Makes a Microsoft 365 E5 License Better Than an E3 License?

Key Takeaways:

• E5 Advantage: E5 offers a major upgrade over E3 in security, compliance, analytics, and communication by adding advanced tools like Microsoft Defender XDR, Microsoft Purview, Power BI Pro, and Teams Phone.
• E3 Limitation: E3 is a solid baseline for productivity but lacks advanced protection and intelligence capabilities, often requiring additional third-party tools.
• E5 Value: E5 provides better long-term value by consolidating capabilities into one platform, improving security, decision-making, and vendor efficiency.

Microsoft 365 E3 and E5 are two widely used enterprise licensing plans from Microsoft. Both include essential productivity applications such as Teams, Outlook, SharePoint, and OneDrive, but Microsoft 365 E5 offers additional security, compliance, analytics, and communication features designed to support more advanced business needs.

For example, what was once individual standalone software programs installed on local machines is now able to be housed in the cloud, significantly improving any enterprise’s capacity for productivity and collaboration. As the cloud becomes mainstream, Microsoft 365 continues to offer relevant products designed with an enterprise’s needs in mind. With that being said, it does offer different variations, including Microsoft 365 E3 and Microsoft 365 E5 licenses.

Is your company currently using the best product to suit your needs? Let’s take a look at the two licenses and explore the differences, along with the benefits of upgrading. Once you evaluate your choices, you might find investing in the Microsoft 365 E5 License is a better option than purchasing or continuing to use the Microsoft 365 E3 license.

What does your enterprise get with the Microsoft 365 E3 license?

One of the reasons some large-scale businesses often opt to go with the E3 license version over the E5 license from Microsoft is due to cost. As of February 2024, the license is $36 per user per month with a purchase requiring an annual commitment. With this license comes Microsoft 365 apps for both desktop and mobile, along with Windows for Enterprise. Other tools include:

• Chat, meetings and file sharing for shared workspaces
• 1TB of cloud storage
• Core security and identity management capabilities
• Ability to add on Copilot for MS 365

With the Microsoft E3 license, your users have access to several useful productivity applications, including, but not limited, to Outlook, Word, Excel, PowerPoint, Access, Microsoft Teams, SharePoint, OneDrive and OneNote, along with several other applications that can enhance the user experience and manage the tasks your company needs.

Key Features Included in Microsoft 365 E3

Microsoft 365 E3 provides a strong foundation for enterprise productivity, collaboration, and security. The license includes a range of applications and services that help employees work efficiently while enabling organizations to manage and protect their digital environments.

Productivity Features

• Outlook: Provides a centralized platform for managing email communications, schedules, contacts, and daily tasks. 
• Word: Provides powerful tools for creating, editing, and sharing professional documents.
• Excel: Allows users to work with data efficiently using spreadsheets, formulas, and visual reporting features. 
• PowerPoint: Allows teams to create and deliver engaging presentations for meetings, training, and business communications.

Collaboration Features

• Microsoft Teams: Enables instant messaging, video meetings, file sharing, and seamless collaboration across teams and departments. 
• SharePoint: Helps organizations organize and distribute information while supporting secure document collaboration. 
• OneDrive: Delivers cloud storage that makes files easily accessible, shareable, and backed up across devices. 

Security Features

• Identity Management: Supports secure user authentication and access control for organizational resources and applications. 
• Conditional Access: Applies security policies based on factors such as user identity, device status, or location to help protect company data.

This combination of productivity, collaboration, and security tools makes Microsoft 365 E3 a popular choice for organizations seeking a comprehensive workplace solution without the advanced capabilities included in Microsoft 365 E5.

What does your enterprise get with the Microsoft 365 E5 license?

The Microsoft 365 E5 license, in 2024, currently costs $57 per user per month and also requires an annual commitment with your purchase. For organizations wondering “what is Microsoft 365 E5?” – it is Microsoft’s most comprehensive enterprise subscription plan, combining productivity, collaboration, security, compliance, analytics, and communication capabilities within a single solution. The E5 license option includes everything you can access in Microsoft 365 E3, along with the following capabilities:

• Advanced security features
• Advanced compliance competences
• Audio conferences for up to 1,000 attendees
• Scalable business analytics with Power BI
• And much more!

Like the Microsoft E3 option, you can add on Copilot for Microsoft 365 E5, along with all of the same apps. One difference is that with the apps that accompany a Microsoft 365 E5 license, you can gain additional applications, such as Power BI Pro, which offers your company’s key personnel access to business analytics designed to empower them to make fast, informed decisions.

Key Features Included in Microsoft 365 E5

Microsoft 365 E5 includes everything available in Microsoft 365 E3 while adding advanced security, compliance, analytics, and communication capabilities designed for enterprise environments.

Security Features

• Microsoft Defender XDR: Provides extended detection and response capabilities across endpoints, identities, email, and applications.
• Microsoft Defender for Endpoint: Helps prevent, detect, investigate, and respond to endpoint security threats.
• Microsoft Defender for Identity: Monitors user activities and identifies suspicious behavior that may indicate a cyberattack.

Compliance Features

• Microsoft Purview: Helps organizations manage, protect, and govern data across their digital environment.
• Insider Risk Management: Identifies and helps mitigate risks associated with internal users and sensitive data access.
• Advanced Auditing: Provides enhanced logging and reporting capabilities to support investigations and compliance requirements.

Analytics Features

• Power BI Pro: Provides tools for building interactive dashboards, exploring business data, and uncovering meaningful insights. 

Communication Features

• Teams Phone: Delivers enterprise-grade calling capabilities directly within Microsoft Teams.
• Audio Conferencing: Allows participants to join Teams meetings via telephone, improving accessibility and flexibility.

This expanded feature set is one of the primary reasons many enterprises choose Microsoft 365 E5 over E3, particularly when security, compliance, and advanced business intelligence are priorities.

Microsoft 365 E3 vs Microsoft 365 E5 Security Features Comparison

When comparing Microsoft E3 and Microsoft E5 security capabilities, Microsoft 365 E3 provides foundational protections such as identity management and conditional access, making it suitable for organizations with standard security requirements.

Microsoft 365 E5 builds on these capabilities with advanced security tools, including Microsoft Defender XDR, Defender for Endpoint, Defender for Identity, Insider Risk Management, and Advanced Auditing. These features provide greater visibility into threats, enhanced incident response capabilities, and stronger protection against sophisticated cyberattacks.

For organizations operating in highly regulated industries or managing sensitive data, the additional security capabilities included in Microsoft 365 E5 can help strengthen cybersecurity and reduce risk.

Business Benefits of a Microsoft 365 E5 License

Beyond its expanded feature set, Microsoft 365 E5 can deliver several business advantages that help organizations improve productivity, security, and operational efficiency.

Key Microsoft E5 license features include advanced security, compliance, analytics, and communication tools that help organizations operate more efficiently while strengthening protection and governance. Microsoft E5 license cost varies depending on region and licensing agreements.

• Improved Security: Advanced threat protection and security monitoring help reduce cybersecurity risks and strengthen overall security posture.
• Enhanced Productivity: Employees can collaborate more effectively and complete work faster with integrated communication and productivity tools. 
• Better Decision-Making: Built-in analytics capabilities, including Power BI Pro, provide insights that support data-driven business decisions.
• Simplified Compliance: Advanced compliance and auditing tools help organizations meet regulatory requirements more effectively.
• Reduced Vendor Complexity: By combining multiple capabilities into a single platform, organizations can reduce the need for separate third-party solutions.
• Support for Growth: The platform can scale with business needs, making it easier to support expanding teams, locations, and workloads.

These advantages position Microsoft 365 E5 as a comprehensive solution that supports productivity, security, compliance, and long-term business success. 

Why upgrading to the Microsoft E5 License is worthwhile for enterprises

While Microsoft E3 offers quite a few features for its price point, the absence of advanced security and compliance capabilities is a big drawback. Without them, an enterprise may find itself at a significant disadvantage. Primarily, your company will have limited security and no access to advanced analytics and AI features. E5 security and compliance capabilities play a critical role in addressing these gaps.  

Let’s take a deeper dive into why your enterprise should consider upgrading to Microsoft’s E5 license.

The Microsoft E5 license saves money since you’ll likely need to purchase certain features separately anyway

To obtain the additional features your company will almost certainly need anyway, your enterprise would probably have to add on several different types of software or work with a multitude of vendors to gain the same applications. Think about the types of technology solutions you’ll need to integrate anyway to obtain access to features, such as:

• Identity management
• Device and application management
• Productivity and modern collaboration
• Data governance and information protection

When you utilize Microsoft E5 licenses, you get “the meal” instead of individual servings, making Microsoft’s 365 E5 license a much more financially attractive and all-encompassing, solution.

The Microsoft E5 license gives you a competitive advantage with better analytics and communication tools

When you upgrade from Microsoft 365 E3 to the Microsoft 365 E5 license, you’ll immediately have access to powerful analytics – right at your fingertips. This ability will empower your company’s decision-makers to make faster and better decisions since they’ll be able to factor in current, up-to-date data.

Other unique features of Microsoft 365 5E that provide your enterprise with a competitive advantage are state-of-the-art communication tools and artificial intelligence. As more companies find themselves in a position that necessitates remote abilities for their employees, the 365 E5 license is the better choice to help accommodate this need. For example:

• Power BI Pro provides you with rich insights and a stronger ability to collaborate
• Azure Active Entra ID P2 gives you an easy way to assign and manage accounts for employees, along with managing the level of access and permission they need in hybrid and multi-cloud environments
• Azure Information Protection P2 helps you find, classify and protect sensitive and proprietary documents
• Microsoft Teams Audio Conferencing and Microsoft Teams Phone Standard offers enterprises an upgraded phone system experience to empower users to better handle calls using the application’s upgraded features
• Microsoft Purview eDiscovery enables authorized users to locate relevant data quickly

Additionally, artificial intelligence tools haven’t just proven to be a disruption, they’re having a transformative impact on industries across the board. AI is just beginning to show its powerful self and uncovering ways enterprises and even smaller business outfits, can utilize this revolutionary tech to gain access to information and opportunities like never before. Furthermore, advanced analytics goes beyond traditional business intelligence to help your users access powerful predictive processing and decision-making tools.

With the availability of AI and communication tools to enhance the user experience, upgrading to an E5 license ultimately pays for itself, making it a highly cost-effective upgrade. This may be especially true for companies’ obligations to abide by government requirements when pursuing contracts.

The Microsoft E5 license ensures essential security components are in place

Threat actors consistently work hard to leverage social engineering and technological strategies to find enterprises’ vulnerabilities and initiate attacks. To combat these growing threats, enterprises can no longer ignore the fact they need to heighten and improve their cybersecurity posture.

In today’s landscape, you’ll need to be able to predict, mitigate, prevent and respond to these ever-growing cyber threats. With a full-encompassing suite of software with extra security components, you can give yourself the advantage of one-stop shopping, meaning no feature is inadvertently overlooked.

• Microsoft Purview Insider Risk Management smartly identifies, investigates and takes rapid action on insider risks
• Microsoft Defender for Cloud Apps gives your users a stronger ability to control in real-time how data travels and prevent hackers from infiltrating your cloud services
• Microsoft Defender for Endpoint enables you to scale your security by providing preventative protection, post-breach detection, automated investigation and an ability to respond to incidents
• Microsoft Defender XDR assists your enterprise in helping protect it against sophisticated malware and phishing attacks
• Microsoft Defender for Identity protects your users against multiple forms of advanced targeted cyberattacks

The bottom line is, that while you will have a handful of security measures in Microsoft 365 E3, with the E5 version you can also use the above upgraded features to assist in better consolidating your security portfolio while simultaneously improving your cybersecurity stance.

The Microsoft E5 license includes advanced tools to satisfy compliance requirements

To meet the requirements in today’s increasingly regulated compliance landscape, enterprises have to give serious thought into how they plan to invest in compliance measures. This way, they ensure they meet these increased requirements of both regulatory and industry governing bodies. If they don’t up their proverbial game, this could have damaging consequences. Microsoft 365 E5 has solutions to help.

Microsoft’s 365 E5 license includes Information Protection and Governance, which is designed to identify potential risks found in your data, helping your enterprise to keep it safeguarded from unauthorized parties. As a result, it provides you with the ability to better satisfy rules you’ll need to comply with, avoiding potential penalties and fines.

Features you’ll be able to access include an ability to assess risks, along with record management and advanced audit options. To sustain themselves and grow, enterprises will need to be competitive, boost security measures, meet compliance requirements and save money. Microsoft’s 365 E5 license is better suited to helping accomplish these goals.

What are the ideal use cases or scenarios for the Microsoft E5 license over the E3 license?

While the numerous additional features the E5 license package includes can provide game-changing elements for any business, it isn’t right for all businesses. Smaller companies that do not face the same challenges as enterprises may find the E3 offers them everything they need at a price point that’s more friendly to their limited budgets.

For enterprise-level companies, a Microsoft 365 E5 license is typically the better option. As a versatile solution, users in larger companies appreciate the advanced productivity tools, a full array of applications, a better ability to enjoy real-time collaboration and an overall seamless experience. While the price point is higher, in the long run, it essentially pays for itself, saving both time and money when piecemealing together multiple vendor solutions to get the same end result.

Companies that need to adhere to specific compliance requirements will find the E5 license simplifies the process and eliminates the need to work with multiple vendors to accomplish their compliance goals and avoid penalties. Essentially, E5’s focus on security helps to prioritize digital security, putting enterprises in a position to optimize their cybersecurity posture.

Key takeaways: The Microsoft E5 license is more expensive, but almost certainly worth it

Microsoft offers several different licenses to assist businesses in meeting their productivity, collaborative and security needs. While each different license offers benefits, many are less suited to enterprise-level companies. Microsoft 365 E5 is an excellent choice for companies looking to boost their security, enhance communication and collaboration and prioritize corporate governance issues.

Investing in this license for your users helps you eliminate juggling multiple vendor agreements, which often increases your overall budget spend. Consolidating your needs into one license simplifies, streamlines and lowers the price, providing a stronger ROI on your investment.

In a nutshell, many corporate decision-makers find making the upgrade to 365 E5 pays for itself within a few years. Red River is equipped to help you evaluate your company’s circumstances and help you do a cost analysis to identify the right solution.

Looking to reevaluate your Microsoft E5 vs. E3 options? Let Red River help you decide

Red River has a deep understanding of what enterprises need. Our experienced and knowledgeable team members excel at what they do. As a partner with several vendors, including Microsoft, Red River’s professional IT experts can help you evaluate your choices and identify the right technology fit to meet your enterprise’s business needs. In most cases, Microsoft 365’s E5 license will be your best option. We can assist in getting this set up for you and your users.

Additionally, along with identifying your current needs, our team members will evaluate your future requirements, taking scalability into consideration. We understand a business will grow and change over time, and we want to make sure your company is fully ready to adapt as needed. Our goal is to help your business overcome any challenges while empowering you to meet its mission objectives and remain within your budget.

If you’re ready to get started on an upgrade to E5 licenses for your users – or if you at least want to explore the possibilities – contact Red River today. As a technology transformation company, our mission is to help enterprise-level businesses reimagine their possibilities for integrating the best technological solutions. We look forward to connecting with you and are happy to answer any questions!