Definition
Microsoft 365 E5 is the highest tier of Microsoft's enterprise productivity suite for large organizations. It includes everything in the more common E3 plan, the core Office apps, Exchange, SharePoint, Teams, and device management, and layers on advanced capabilities: stronger threat and identity protection, deeper compliance and data governance, Power BI Pro analytics, and Teams Phone cloud calling features. It is sold per user per month, usually on an annual commitment.
What E5 adds over E3
The value of E5 sits in four areas that E3 does not cover. The first is advanced security, including more capable threat protection and identity controls. The second is advanced compliance and data governance for organizations with heavier regulatory needs. The third is analytics through Power BI Pro. The fourth is cloud voice through Teams Phone features. For some organizations these replace separate point tools, which is where E5 can pay for itself rather than simply cost more.
| Capability area | E3 | E5 |
|---|---|---|
| Core productivity apps | Included | Included |
| Advanced security and identity | Limited | Included |
| Advanced compliance and governance | Limited | Included |
| Power BI Pro analytics | Add on | Included |
| Teams Phone calling features | Add on | Included |
What E5 costs
As of June 2026, Microsoft publishes Microsoft 365 E5 at a list price in the region of 57 US dollars per user per month on an annual commitment, against roughly 36 dollars for E3. Negotiated enterprise rates frequently differ from list, especially at volume. Because Microsoft adjusts pricing and plan contents periodically, always confirm current figures against the official source before budgeting.
Source: Microsoft 365 enterprise plans pricing page, as of June 2026. Confirm current pricing with Microsoft, as plans and rates change.
When E5 is worth it, and where the waste is
E5 is worth the premium when an organization will genuinely deploy and use the advanced security, compliance, and voice features, and when doing so retires separate tools that would otherwise be bought alongside E3. The classic overspend is the opposite: buying E5 across the whole workforce for capabilities that are never switched on, where E3 would have served. A common right sizing move is to assign E5 only to the users who need its advanced features and E3 to everyone else. This mixed approach often cuts cost meaningfully without losing capability where it matters. The plan choice also interacts with the buying route, covered in the enterprise agreement definition.
Related terms and reading
For the wider set of definitions, see the SaaS glossary. The E3 versus E5 decision and the add ons that blur it are explored in common Microsoft 365 licensing mistakes. Because Microsoft 365 is usually the largest single line item in the stack, getting the plan tier right feeds directly into the broader digital workplace cost optimization programme.