Microsoft E5 Security for Microsoft 365 Business Premium Now Available

On April 6, 2025, Microsoft announced that the Microsoft E5 Security add-on is available to Microsoft 365 Business Premium tenants. Microsoft 365 Business Premium is one of the packages for small to medium businesses (up to 300 licensed seats). The E5 Security suite is a bundle of high-end features to improve the security of a tenant. Until now, Microsoft has targeted the add-on at enterprise customers with Office 365 E3 or Microsoft 365 E3 that want the extra security features without upgrading to Office 365 E5 or Microsoft 365 E5. This is the first time that Microsoft has made the add-on available for a small to medium product.

Finding Savings in Software Bundles

The unique selling point for the add-on is that it’s cheaper to buy it than license each of the features separately (Figure 1). Everyone loves a bargain, and saving 57% seems like a true deal.

The truth is that the E5 Security add-on is a bargain if your tenant can use its functionality. Careful assessment of each of the licensed features is necessary to understand where the tenant can gain value. For instance, if the organization currently doesn’t have the capacity to deploy Defender for Endpoint, that wipes $5.20 off the add-on’s value. If nothing can be gained from Entra P2, an extra $9 disappears, and suddenly the saving to license the other three features goes from $16.20 to $2. That’s still a saving of up to $600 monthly/$7,200 annually for a 300-person Business Premium tenant, which is not quite as impressive as the headline. And to get that saving, you must invest $43,200 annually to license the 300 seats.

On the other hand, if Entra P2 stops a tenant being compromised through an account that can be identified as risky or an attacker can be stopped because Defender for Cloud Apps detects a problematic app, then the cost of the E5 Security add-on is more than justified. It all depends on how a tenant can extract value.

The same point is valid for the Microsoft E5 Compliance add-on (also available for $12/month in the U.S.). A bunch of interesting compliance technology is covered by the add-on, but if you don’t want to use features like Insider Risk Management, Communication Compliance, customer lockbox, customer key (for sensitivity labels), and Information Barriers, the value proposition becomes much less attractive.

Playing the Licensing Game

License management is an essential competence for tenant administrators. I don’t mean negotiation of licensing deals with Microsoft. Instead, I’m referring to understanding what licenses are needed for the functionality required by the business, knowing the cheapest way to license that functionality, and keeping track of how licenses are used. Tools like the Microsoft 365 licensing report script can help here. If you don’t want to build your own tools and want an off-the-shelf product to manage licensing, I recommend CoreView license management (the sponsor of the Office 365 for IT Pros eBook).

The higher the individual license cost, the more important it is to track active and ongoing usage. Microsoft 365 Copilot is a good example. It doesn’t make sense to assign $360/year licenses to people who don’t use Copilot, so tracking Copilot usage to ensure that people with licenses use those licenses is important.

Have a Deployment Plan Before Buying Anything

If you need and can use their features, Microsoft 365 add-ins can be great value. I don’t recommend buying these add-ons unless a tenant has a plan to deploy and use the licensed technology to achieve well-defined results. Having something that you cannot use isn’t a great idea and buying expensive software just because it seems like a bargain has never been a great tactic. Small to medium enterprises might not have the expertise to assess the true worth of the functionality bundled in E5 Security add-in. If you’re in that situation, engage an expert to help build your plan.

For more information about using Microsoft E5 security with Microsoft 365 Business Premium, see the Microsoft documentation. The Microsoft E5 Compliance add-on is not available for Business Premium (but that might change).

Insight like this doesn’t come easily. You’ve got to know the technology and understand how to look behind the scenes. Benefit from the knowledge and experience of the Office 365 for IT Pros team by subscribing to the best eBook covering Office 365 and the wider Microsoft 365 ecosystem.