Microsoft 365 licensing — without the jargon

For a 10–50 user business, Microsoft 365 licensing is one of the easiest places to over-spend (or under-protect). Letsma reviews this quarterly for every managed client because the right mix changes as your team and risk profile change.

The four core plans

Microsoft 365 Business Basic — £5.52 / user / month + VAT

Best for: Frontline staff, shop floor, hospitality teams, anyone who doesn’t need desktop Office apps installed.

• Web-only versions of Word, Excel, PowerPoint, Outlook
• 50 GB mailbox, 1 TB OneDrive
• Teams, SharePoint, Exchange Online
• MFA (free) and basic threat protection

Doesn’t include: desktop app install, Defender for Endpoint, Intune, BitLocker enforcement.

Microsoft 365 Business Standard — £11.52 / user / month + VAT

Best for: Most desk-based staff.

• Everything in Basic
• Desktop Word, Excel, PowerPoint, Outlook installed on up to 5 PCs/Macs per user
• Microsoft Loop, Bookings, Forms

Doesn’t include: advanced security, Intune, conditional access.

Microsoft 365 Business Premium — £20.28 / user / month + VAT

Best for: Anyone with a laptop, admin access, or handling client data. Letsma’s default recommendation.

• Everything in Standard
• Microsoft Defender for Endpoint — managed antivirus + EDR
• Defender for Office 365 Plan 1 — safe links, safe attachments, anti-phishing
• Intune — full device management, BitLocker, remote wipe
• Entra ID P1 — Conditional Access, MFA enforcement
• Azure Information Protection P1 — sensitivity labels, encryption

If you’re doing Cyber Essentials, you almost certainly want Business Premium.

Microsoft 365 Apps for Business — £9.80 / user / month + VAT

Best for: Users who need desktop Office apps but already have email elsewhere.

The Letsma mix that usually saves money

For a typical 20-staff firm:

Five common mistakes we fix

1. Buying Business Standard plus standalone antivirus and Intune when Business Premium costs less than the sum of those parts.
2. Paying for licences on shared mailboxes. Shared mailboxes up to 50 GB are free.
3. Paying for licences on ex-staff. Mailbox conversion to shared, then licence reclaim, takes five minutes.
4. Paying for Visio Plan 2 when you only need it occasionally. Visio web (£3.80) covers most users.
5. Paying monthly when annual would save 16%. Annual commit knocks Business Premium from £20.28 to ~£17.65/user/month.

Add-ons worth knowing about

• Microsoft 365 Copilot — £24.70 / user / month. Worth it for power users, not for everyone.
• Defender for Office 365 Plan 2 — adds attack simulation training.
• Microsoft Teams Phone — replaces your VoIP system.
• Power Automate / Power Apps Premium — only if you’re actually building automations.

What the licence review actually looks like

1. We pull a complete user list with current licence assignments.
2. We map each user to their actual usage.
3. We identify orphan, over-licensed and under-protected users.
4. We produce a recommendations doc with cost and security impact.
5. You decide what to action; we apply the changes the same week.

“Letsma’s quarterly licence review found we were paying for three ex-staff and two unused Visio Plan 2 licences. Saved us £840 a year without any change to what we actually use.”

— Finance Manager, Reigate

Ready for a free licence review?

Related reading: Microsoft 365 at Letsma · Migrating to Microsoft 365 · Cyber Security