Microsoft Licensing for Office 365 Demystified

With recent changes to product names, pricing, inclusions, and contract terms, Microsoft 365 licensing could confuse a saint. We walk through the options and outline our recommended SKUs for Irelands SMEs. As a Microsoft CSP partner, we supply and manage Microsoft Licensing for our clients, ensuring transparency and clarity.


A Long History

Microsoft 365 has been available for over ten years, launched on June 28th, 2011. It arrived into a world where Gmail and Google Apps owned the cloud, and Microsoft’s own Exchange Server held email and collaboration onsite. Much has changed since then:

  • Many recognised the costs and challenges of running on-premises exchange servers and felt it just wasn’t worth it
  • A continuous stream of new product introductions into Office 365 has made it a very full-featured collaboration suite
  • The integration of web-based and “full-fat” desktop applications means you can work on documents from anywhere, often simultaneously with teammates.

As a result, Microsoft Office 365 has evolved into the leading collaboration platform for businesses today. Whether a sole trader or a multinational, Microsoft Office 365 licensing structures provide the tools, technologies, and security you need to run your business today. 

But…What Do I Need?

Because of the breadth and depth of Microsoft Office 365 licensing available and the frequent renaming, re-packaging, and changes to sales challenges, SMEs, which typically lack a dedicated IT function, are becoming increasingly confused. Tarbh Tech consultants have seen this result in over-licensing, increasing costs, or inadequate coverage leading to staff challenges. In addition, many are unaware of all the current capabilities in Microsoft Office 365 and purchase overlapping and potentially unnecessary 3rd party solutions. 

While there are many line items and product-specific guides to Microsoft Licensing published online, the team at Tarbh Tech have produced this Microsoft 365 Infographic based on the types of conversations we had with our clients. Real-world discussions focus on capabilities rather than products. 

An infographic representing the various Microsoft 365 licensing options is represented as a flow chart.
Infographic of the various Microsoft 365 licensing options represented as a flow chart.

What’s Missing?

No readable infographic can be 100% complete; indeed, that’s the case with this one. One version of the Microsoft price list has approximately 9000 entries. For instance, the infographic does not cover the following:

  • Microsoft Dynamics 365
  • Microsoft Dynamics Business Central
  • Microsoft PowerBI
  • The many Microsoft perpetual server licenses which are now available via Cloud Service Providers such as Tarbh Tech

Nor does the infographic address exceptional use cases such as shared mailboxes, auto-attendant or call queues in Teams Voice, and many others. 

What Should I Do?

The infographic outlines three primary approaches to Microsoft 365 license selection:

  • Al-la-carte – this approach is only recommended for specific edge cases, minor or temporary requirements. The combinations of licenses required to deliver the capabilities of the business or enterprise bundles are frequently more expensive and more challenging to manage than the bundles themselves.
  • SME Recommended – for most staff in most SMEs in Ireland, we strongly recommend the combination of Microsoft 365 Business Premium with Microsoft Teams Phone with Calling Plan. This provides the typical staff member with all the collaboration, productivity, and security tools they will need in the modern workplace. They can have up to 50GB of email, 5TB of OneDrive space, the Microsoft Office suite on up to 5 desktops or laptops that they own (such as a home PC, for example), and the Microsoft Office apps on up to 5 mobile devices, leading antivirus/edr/and mail filtering, and much much more.
  • Enterprise – Most organisations will have a dedicated IT team with specific security, compliance, and audit requirements at this scale. The Enterprise plans address those needs more fully. 

We are always happy to help. An essential first step is to audit licenses in use or license requirements. This can be done quickly and efficiently. Arrange a call today for a free license audit of your Microsoft Office 365 tenancy or to discuss any new requirements.