| Microsoft 365 E3 brings the core pieces of a modern workplace into one license, helping businesses give people the tools they need to work productively while creating more consistent control over identities, data, and access. |
What is E3?
- Microsoft 365 E3 combines productivity and collaboration tools with Windows Enterprise, identity, endpoint management, security, and compliance capabilities.
- It includes Office 365 E3. Word, Excel, PowerPoint, Outlook, Exchange Online, OneDrive, SharePoint, and other Microsoft 365 productivity services sit inside the broader Microsoft 365 E3 subscription.
- It adds Windows 11 Enterprise. Organizations can extend their Microsoft strategy beyond applications and into the operating system used across workplace devices.
- It brings identity into the picture. Microsoft Entra ID P1 adds identity and access controls, including Conditional Access, so organizations can put more structure around who gets access and under what conditions.
- It includes cloud-based endpoint management. Microsoft Intune helps IT teams manage devices, applications, configurations, and compliance policies across the organization.
What Does a Microsoft 365 E3 License Include?
At a high level, Microsoft 365 E3 includes:
- Productivity and collaboration: Microsoft 365 apps, Exchange Online, OneDrive, SharePoint, and Teams where a Teams-inclusive plan is licensed.
- Windows 11 Enterprise: Enterprise operating system capabilities for modern workplace devices.
- Identity and access management: Microsoft Entra ID P1, including Conditional Access.
- Endpoint management: Microsoft Intune Plan 1 for managing devices, applications, configurations, and compliance.
- Security: Defender for Endpoint P1 and Defender for Office 365 P1 provide foundational endpoint, email, and collaboration protection.
- Compliance and data protection: Microsoft Purview capabilities support information protection, Data Loss Prevention, audit, eDiscovery, and data lifecycle management.
- Security posture visibility: Microsoft Secure Score helps teams identify configuration gaps and prioritize improvements.
What Productivity and Collaboration Tools Are Included in Microsoft 365 E3?
The productivity layer of Microsoft 365 E3 gives employees the tools they already rely on to create and automate work.
The real value is in giving people a connected workspace where data, conversations, and workflows can move more easily across the business.
With that in mind, Microsoft 365 E3 includes:
- Word: Create, edit, format, and collaborate on documents.
- Excel: Analyze data, build spreadsheets, perform calculations, and create visualizations.
- PowerPoint: Build and collaborate on presentations.
- Outlook: Manage business email, calendars, contacts, and tasks.
- And more.
What Security Features Come with Microsoft 365 E3?
Microsoft 365 E3 security is best viewed as a connected foundation. It helps organizations get a clearer view of their Microsoft security posture.
With E3 security, your organization gets:
- Microsoft Entra ID P1: Supports identity management, single sign-on, multifactor authentication, and Conditional Access.
- Conditional Access: Lets IT apply access rules based on factors such as the user, application, device, and sign-in context.
- Microsoft Intune Plan 1: Helps manage corporate and supported personal devices, applications, security configurations, and compliance policies.
It’s also key to understand the boundary: E3 provides strong foundational controls, but more advanced capabilities such as deeper endpoint detection and response sit higher in Microsoft’s security licensing stack.
That security foundation is easier to understand once you see where it sits within Microsoft’s broader E3 licensing structure.
Not every “E3” license covers the same ground, so the next step is to separate Office 365 E3, EMS E3, and Microsoft 365 E3 and see what each one is designed to do.
Microsoft 365 E3 vs Office 365 E3 vs EMS E3
| License | Primary Role | Key Capabilities | Best Shorthand |
|---|---|---|---|
| Office 365 E3 | Productivity and collaboration | Office apps, Exchange, SharePoint, OneDrive, collaboration, foundational email security | Work and collaborate |
| EMS E3 | Identity, access, and device management | Entra ID P1, Conditional Access, Intune, application management, information protection | Control access and devices |
| Microsoft 365 E3 | Integrated enterprise environment | Office 365 E3 + EMS E3 + Windows 11 Enterprise E3 | Bring productivity, identity, endpoints, and Windows together |
The three E3 licenses are easy to confuse because they share a name, but they solve very different problems.
- Office 365 E3 focuses on how people work
- EMS E3 focuses on how users, devices, applications, and data are controlled
- Microsoft 365 E3 brings those layers together with Windows 11 Enterprise E3
What Is Office 365 E3?
Office 365 E3 is the productivity layer of the E3 family. It gives employees the applications and cloud services they need to communicate and collaborate.
Its limitation is just as important as what it includes: Office 365 E3 does not provide the same Windows, Entra ID P1, or Intune capabilities found in Microsoft 365 E3.
What Is Enterprise Mobility + Security E3?
Enterprise Mobility + Security E3, or EMS E3, is built around controlling access, managing endpoints, and protecting organizational data.
EMS E3 doesn’t replace Office productivity licensing, and it shouldn’t be mistaken for Microsoft’s full advanced security stack.
What Is Microsoft 365 E3?
Microsoft 365 E3 is the broader suite that connects productivity, Windows, identity, endpoint management, foundational security, and compliance into one licensing architecture.
In licensing terms, Microsoft 365 E3 combines Office 365 E3, Enterprise Mobility + Security E3, and Windows 11 Enterprise E3.
Which E3 License Does Your Organization Actually Need?
The right E3 license depends less on the product name and more on what your organization already owns, what different users actually need, and where the biggest management or security gaps exist.
Look at your:
- Current Microsoft licenses
- Windows requirements
- Endpoint estate
- Identity controls
- Compliance obligations
- Security maturity
- Plans for Copilot
It’s also worth remembering that not every employee needs to be licensed identically. Different roles can justify different combinations.
What Are the Most Important E3 License Features?
The most valuable E3 license features are the ones that work together to reduce friction across your organization.
| Capability | Microsoft 365 E3 Component | Why It Matters to the Business |
|---|---|---|
| Productivity | Word, Excel, PowerPoint, Outlook and Microsoft 365 apps | Gives employees a familiar, standardized set of tools for everyday work. |
| Email and collaboration | Exchange Online, OneDrive, SharePoint and Teams with the appropriate plan | Keeps communication, meetings, files, and collaboration connected. |
| Windows | Windows 11 Enterprise E3 | Extends management and security controls to the operating system employees use every day. |
| Identity | Microsoft Entra ID P1 | Helps control who can access business resources and under what conditions. |
| Endpoint management | Microsoft Intune Plan 1 | Lets IT manage devices, applications, configurations, and compliance centrally. |
| Threat protection | Defender for Endpoint P1 and Defender for Office 365 P1 | Adds preventative protection across endpoints, email, links, attachments, and common attack paths. |
| Data protection | Microsoft Purview DLP and information protection | Helps reduce inappropriate sharing of sensitive business information. |
| Compliance | Audit Standard, eDiscovery Standard, retention and related controls | Gives IT, legal, and compliance teams foundational tools for investigations, retention, and oversight. |
| Automation | Power Automate and Power Apps included rights | Helps remove repetitive manual work and streamline common business processes. |
| AI | Microsoft Copilot Chat | Gives eligible users access to secure, web-grounded AI chat while creating a foundation for broader Copilot adoption. |
When Does a Microsoft E3 License Make Sense for a Business?
A Microsoft E3 license starts to make sense when the challenge has grown beyond giving employees Office applications.
Common signs that Microsoft 365 E3 may be a fit include:
- Hybrid work is making device management harder. Intune can centralize configuration, compliance, and application management across distributed endpoints.
- Access decisions need to become more deliberate. Entra ID P1 and Conditional Access help organizations move beyond relying primarily on passwords.
- Email and endpoint threats are creating more work for IT. Defender for Office 365 P1 and Defender for Endpoint P1 add preventative controls across two common attack surfaces.
- Sensitive information needs more governance. Microsoft Purview capabilities can support DLP, information protection, audit, eDiscovery, and retention requirements.
Once you know where Microsoft 365 E3 fits operationally, the next question is what that fit costs in practice.
How Much Does Microsoft 365 E3 Cost?
Microsoft 365 E3 pricing is handled per user, with different rates depending on whether Teams is included, and the final budget can shift quickly once security, compliance, Copilot, and user-role requirements enter the picture.
| Plan | Current Canadian List Price | Billing Structure |
|---|---|---|
| Microsoft 365 E3 with Teams | CAD $52.90/user/month | Paid yearly, annual commitment |
| Microsoft 365 E3 without Teams | CAD $41.30/user/month | Paid yearly, annual commitment |
Actual Microsoft 3 license costs may vary based on the customer agreement, purchasing channel, currency, contract terms, and future Microsoft pricing changes.
How Is Microsoft 365 E3 Pricing Structured?
As we’ve already discussed, Microsoft 365 E3 is licensed per user, so costs scale with the number of people assigned the license rather than the size of the tenant.
A few things matter when reading the price:
- Per-user licensing: Every assigned user carries an individual licence cost.
- Annual commitment: The monthly figure represents a yearly commitment, not a simple month-to-month purchase.
- Teams choice: Organizations can select a Teams-inclusive E3 plan or a lower-priced no-Teams version.
- Separate Teams licensing: Teams Enterprise can also be purchased separately where required.
What Affects the Real Microsoft E3 License Cost?
The real Microsoft E3 license cost is shaped by who needs what.
Two organizations with the same number of employees can end up with very different Microsoft bills depending on user roles, security requirements, and similar concerns.
The biggest cost factors to consider include:
- Number of users: Full E3 may not be necessary for every employee.
- Different employee populations: Knowledge workers, frontline staff, executives, contractors, administrators, and higher-risk users can require different licenses.
- Teams requirements: Not every user necessarily needs the Teams-inclusive E3 SKU.
- Security add-ons: Advanced XDR, identity, investigation, or security operations capabilities can increase the cost above base E3.
| F12 Tip: Map licenses to roles before multiplying the list price by your total employee count. That simple exercise can expose both expensive coverage gaps and costly duplication. |
Once you understand what drives the real cost of E3, the next question is whether E3 gives your organization enough capability or whether E5 is worth the step up.
Microsoft 365 E3 vs E5: What Is the Difference?
The biggest difference between Microsoft 365 E3 and E5 is in how far the organization needs to go beyond prevention and control into advanced detection, investigation, privileged access, automation, analytics, and compliance.
| Capability | Microsoft 365 E3 | Microsoft 365 E5 | Why It Matters |
|---|---|---|---|
| Productivity | Core Microsoft 365 apps and services | Same core productivity foundation | Everyday work stays largely consistent across both tiers. |
| Identity | Entra ID P1 | Entra ID P2 | E5 adds deeper identity-risk and privileged-access capabilities. |
| Conditional Access | Included | Included with additional risk-based capabilities | E5 can make access decisions using more advanced identity-risk signals. |
| Privileged access | Not included at the PIM level | Privileged Identity Management | Important for administrators and other highly privileged accounts. |
| Endpoint protection | Defender for Endpoint P1 | Defender for Endpoint P2 | E5 adds more advanced detection, investigation, and response capabilities. |
| Email security | Defender for Office 365 P1 | Defender for Office 365 P2 | E5 adds deeper hunting, automation, simulation, and investigation capabilities. |
| Threat detection | Prevention-focused foundation | Broader XDR capabilities | E5 is better suited to organizations that need to investigate and correlate sophisticated threats. |
| Compliance | Core Purview capabilities | Advanced Purview capabilities | E5 becomes more relevant as legal, regulatory, and data-risk requirements become more complex. |
| Analytics | Power BI Pro not included | Power BI Pro included | E5 adds additional business intelligence value. |
| Teams Phone | Not part of base E3 | Included with applicable E5 offering | Communications requirements can influence the overall licensing decision. |
For many organizations, E3 is a strong foundation for controlling identities, devices, endpoints, email, and data. E5 becomes more compelling when IT and security teams need to detect, investigate, automate, and respond to more sophisticated risk, or when advanced compliance and privileged-access requirements come into play.
How Should IT Leaders Evaluate Microsoft 365 E3?
Leaders should evaluate:
- Current licenses: Identify Office 365, Windows, Entra, Intune, Defender, Purview, and third-party tools already in use.
- User groups: Separate general users, executives, administrators, frontline workers, contractors, security teams, and higher-risk roles.
- Identity: Review MFA, Conditional Access, privileged accounts, guest access, legacy authentication, and hybrid identity.
- Endpoints: Assess device ownership, Intune readiness, compliance policies, BYOD, and Windows management.
- Security: Determine whether prevention-focused E3 controls are sufficient or whether advanced detection, response, and XDR capabilities are required.
Get More Value from Your Microsoft 365 Licensing
Microsoft 365 licensing should support how your business actually work.
A Microsoft 365 Licensing Assessment can help you understand what you have today, where security or licensing gaps exist, how ready your environment is for Copilot, and where modernization could simplify your Microsoft stack.
Review your current licences, E3 and E5 alignment, security requirements, Copilot readiness, and opportunities to reduce unnecessary overlap, then leave with a practical next step based on what your organization actually needs.
Frequently Asked Questions About Microsoft 365 E3
What is the Difference between Microsoft 365 E3 and E5?
Microsoft 365 E3 and E5 share the same core productivity foundation, including Microsoft 365 apps, Windows Enterprise, identity, and endpoint management.
The difference is depth.
E3 includes Windows 11 Enterprise E3, Entra ID P1, Intune, and foundational Defender and Purview capabilities. E5 adds Windows 11 Enterprise E5, Entra ID P2, broader Defender XDR, advanced identity protection, privileged access controls, stronger investigation and response, and advanced compliance capabilities.
Does Microsoft 365 E3 Include Microsoft Copilot?
Microsoft 365 E3 includes Microsoft Copilot Chat for eligible users at no additional licence cost, but it does not include the full Microsoft Copilot experience.
Copilot Chat is primarily web-grounded and includes enterprise data protection, while Microsoft Copilot can reason across work data through Microsoft Graph and provides AI experiences inside apps such as Word, Excel, Outlook, PowerPoint, and Teams.
Is Microsoft 365 E3 Enough for a Mid-Sized Business?
Microsoft 365 E3 can be enough for many mid-sized businesses, but there is no universal answer. E3 provides a strong foundation for productivity, Windows, identity, endpoint management, security, and core compliance.
The decision should reflect the organization’s risk profile, regulatory obligations, user roles, security operations, and AI plans.
