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Microsoft 365 E1 vs E3: Key Differences

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Microsoft 365 E1 and E3 differ primarily in scope: E1 is a lightweight, email-and-collaboration plan for frontline workers, while E3 is a full enterprise suite adding desktop Office apps, advanced security, and compliance tools. Below is a direct comparison table, followed by a detailed breakdown of what each plan includes, costs, and how to choose between them.

Quick Comparison Table

Feature Microsoft 365 E1 Microsoft 365 E3
Desktop Office apps (Word, Excel, PowerPoint) No (web/mobile only) Yes (full installed apps)
Email (Exchange Online) 50 GB mailbox 100 GB mailbox
Microsoft Teams Yes Yes
Advanced security (Microsoft Defender for Office 365) No Yes (Plan 1)
Compliance (eDiscovery, legal hold) Basic Advanced
Windows 10/11 Enterprise No Yes (E3)
Typical target user Frontline, task workers Information workers, managers

What Each Plan Includes

Microsoft 365 E1 is the entry-level enterprise plan. It includes web-based and mobile versions of Office apps (Word, Excel, PowerPoint, Outlook), Exchange Online with a 50 GB mailbox, Microsoft Teams, SharePoint, OneDrive for Business, and basic compliance features like retention policies. It does not include the desktop Office applications that users install on their PC or Mac.

Microsoft 365 E3 is a step up. It adds the full desktop Office suite (Word, Excel, PowerPoint, Outlook, Access, Publisher) that you can install on up to five devices per user. It also includes a larger 100 GB mailbox, advanced security tools like Microsoft Defender for Office 365 Plan 1, and more comprehensive compliance capabilities (eDiscovery, legal hold, information protection). E3 also includes Windows 10/11 Enterprise licensing, which E1 does not.

How They Work: Licensing and Deployment

Both plans are subscription-based, licensed per user, and billed monthly or annually. You assign a license to each user in the Microsoft 365 admin center. The user then signs in with their work or school account to access the services included in their plan.

For E1, users work entirely in the browser or through mobile apps. For example, they open Word Online to edit a document and save it to OneDrive. For E3, users install the desktop apps locally, which work offline and offer more advanced features (like mail merge in Word or pivot tables in Excel) than the web versions.

Cost Comparison

Pricing varies by region and billing cycle, but generally E1 is roughly half the price of E3. As of 2025, E1 is around $8–$10 per user/month, while E3 is around $20–$23 per user/month. These are list prices; discounts may apply for annual commitments or volume licensing. For exact current pricing, check the official Microsoft 365 pricing page.

How to Choose: E1 vs E3

Choose E1 if:

  • Your employees primarily use email, Teams, and web-based Office apps.
  • They don’t need to install desktop Office on their computers.
  • You want to keep costs low for a large frontline workforce.

Choose E3 if:

  • Your staff need the full desktop Office suite for complex document creation, data analysis, or presentations.
  • You require advanced security and compliance features to meet regulatory requirements.
  • You want Windows Enterprise licensing for your organization.

Common Problems and Misconceptions

Misconception: E1 includes desktop Office. It does not. Many users are surprised when they can’t install Word on their PC. Always check the plan details before purchasing.

Problem: Users hit mailbox size limits. E1 gives 50 GB, which is fine for most, but heavy email users may need more. You can’t increase the mailbox size without upgrading to E3 or an add-on.

Problem: Teams features are limited. Both plans include Teams, but E3 adds features like live captions and advanced meeting recording. For basic chat and meetings, E1 is sufficient.

Alternatives to Consider

If E1 is too limited and E3 is too expensive, consider:

  • Microsoft 365 Business Basic – similar to E1 but for smaller businesses (up to 300 users).
  • Microsoft 365 Business Standard – includes desktop Office, but limited to 300 users.
  • Microsoft 365 F1/F3 – tailored for frontline workers, with F1 being the most basic and F3 adding some desktop apps.

Frequently Asked Questions

Can I upgrade from E1 to E3 without losing data?

Yes. You can assign an E3 license to a user who currently has E1 in the Microsoft 365 admin center. All their emails, files, and Teams data remain intact. The user will need to sign out and back in to see the new features.

Does E1 include Exchange Online?

Yes, E1 includes Exchange Online with a 50 GB mailbox. It also includes the Outlook web app and mobile app.

Is Microsoft Teams included in both plans?

Yes, both E1 and E3 include Microsoft Teams. However, E3 adds some advanced meeting features like live captions and recording transcription.

Can I use desktop Office with E1?

No. E1 only includes web and mobile versions of Office. You would need to upgrade to E3 or purchase a separate Office license.

Which plan includes Windows Enterprise?

Only E3 includes Windows 10/11 Enterprise. E1 does not include any Windows licensing.

Are there any differences in support?

Both plans include standard Microsoft support. For faster response times, you may need to purchase a support add-on.

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