Managing Microsoft 365 (M365) licenses can feel as tricky as a hockey power play. But for Canadian small and mid-sized businesses (10–200 employees), it’s a game you can win – and save money doing it. In true Canuck fashion, we’ll add a touch of humor (and maybe a hockey analogy or two, eh) as we break down how to optimize your M365 licensing. From the Monthly vs. Annual face-off to choosing your license lineup (not everyone needs to be an E5 MVP), and even a non-profit power play for charities, this guide will help you avoid getting stuck in the penalty box of wasted IT budget. Let’s drop the puck!
1. The Monthly vs. Annual Face-Off 🏒
When it comes to paying for M365, you have two main contract options: monthly or annual. Annual subscriptions typically cost less per month – roughly 20% cheaper – because you’re committing for a full year. Monthly subscriptions cost a bit more (20% premium), but they offer more flexibility. It’s like the difference between buying season tickets versus single-game tickets: season tickets save money overall, but single-game tickets give you the freedom to skip matches you can’t attend.
Employee Turnover Impacts
If your employee turnover is higher than a Tim Hortons drive-thru on a Monday morning, an annual commitment could leave you paying for empty seats. Annual plans lock you in, once activated, you usually can’t cancel or reduce those licenses after the first 7 days. In other words, if Doug from accounting quits and you’ve paid annually, you’re still on the hook for his license (unless you reassign it). Monthly licenses, on the other hand, can be cancelled or scaled down at the end of any month – no harm, no foul.
Cost vs. Flexibility
It’s a classic face-off. Annual plans score on cost efficiency, while monthly plans are nimble on the ice, great for shifting needs. Strategy: Do a bit of both! Microsoft now lets you mix annual and monthly subscriptions to balance savings and flexibility. For example, you might put your core 15 full-time staff on annual plans (to get that lower rate) and use 5 monthly licenses for seasonal or temporary team members. When hockey season (or your busy season) is over and those 5 temporary folks are gone, you can drop those monthly licenses faster than a puck in overtime, avoiding wasted costs while still saving on your long-term team.
Avoiding Wasted Licenses
Make it a habit to review your licenses regularly. Just like a coach wouldn’t keep an injured player on the roster, don’t keep departed employees assigned to active subscriptions. Reassign licenses immediately when roles change or people leave, or remove them if not needed. Implement processes or use admin tools to track these changes and reclaim licenses promptly.
In short:
-
- Annual = great for stable teams
- Monthly = great for fluctuating teams
- Mix if that’s your reality, and you’ll keep your licensing costs optimized like a power-play lineup.
2. The License Lineup (Basic vs. Standard vs. Premium vs. E3 vs. E5) 🥅
Not every player on your team needs top-of-the-line skates, and not every employee needs the priciest M365 license. Microsoft’s lineup includes Business Basic, Business Standard, Business Premium, Microsoft 365 E3, and E5. Think of these as positions on your team, you want the right player in the right position:
Microsoft 365 Business Basic: The Rookie with Solid Fundamentals 🏒
Business Basic is your grinder forward, an affordable, hardworking option that keeps the team moving. It includes web and mobile versions of Office apps (but no desktop versions), email hosting (50 GB mailbox), OneDrive (1 TB), SharePoint, and Microsoft Teams.
- Use Case: Frontline workers, field staff, or those who mainly use email and Teams without needing full desktop Office apps.
- Cost Advantage: Lowest-cost M365 plan, about half the price of Business Standard.
- Limitation: No installed Office apps, so not ideal for power users working with complex documents.
Microsoft 365 Business Standard: The Reliable Forward 🚀
Business Standard is like a solid pair of skates – reliable for everyday use. It includes desktop Office apps (Word, Excel, Outlook, etc.), email hosting (50 GB mailboxes), OneDrive, SharePoint, and Teams.
- Use Case: General staff needing full Office apps and cloud collaboration.
- Cost: About half the price of Premium.
Microsoft 365 Business Premium: The Star Defenseman 🛡️
Business Premium is everything in Standard plus advanced security and device management. It includes Microsoft Defender security, Intune for device management, and Azure AD Premium P1.
- Use Case: Businesses with remote workers, security concerns, or managed devices.
- Avoid Overkill: If you don’t need Intune or Defender, Standard may be enough.
Microsoft 365 E3 – The Playmaker 🎯
Microsoft 365 E3 sits between Business Premium and E5, offering enterprise-level features without the full cost of E5. It includes all Office apps, email hosting, cloud storage, and advanced security, along with key enterprise capabilities like Azure AD Premium P1, Microsoft Defender, and data loss prevention (DLP).
- Use Case: Businesses needing enterprise-level security and compliance but don’t require the full-blown E5 feature set.
- Key Benefits: Includes bigger mailboxes (100GB), more storage, better security, and Windows Enterprise licensing.
- Cost: More expensive than Business Premium but significantly cheaper than E5.
- Best Fit: Mid-sized companies with compliance needs, hybrid workforces, or plans to scale to full enterprise security.
Microsoft 365 E5: The MVP Goalie 🥇
E5 is the top-tier plan with all Office apps, advanced security, compliance, analytics, and phone systems. It can cost nearly 3× more per user than Business Premium.
- Use Case: Companies dealing with highly sensitive data, threat protection, or compliance requirements.
- Avoid Overpaying: Most SMBs don’t need E5 licenses for every employee – assign only to key users.
3. The Non-Profit Power Play 🥅🎁
Are you a Canadian non-profit or charity? Microsoft offers free M365 licenses through its Tech for Social Impact program:
- Microsoft 365 Business Basic – FREE for up to 300 users.
- Microsoft 365 Business Premium – FREE for up to 10 users.
This means a small non-profit can outfit its entire staff with pro-grade email, Office, and security without spending a loonie.
How to Maximize This Offer
Eligible non-profits can register through Microsoft directly or contact us at Open Door and we can assist. Plan your license assignments wisely:
- Business Premium: Assign to security-sensitive roles.
- Business Basic: Use for most general staff.
Key Takeaways 🎯
- Annual vs. Monthly: Annual saves ~20%, but monthly offers flexibility. Use a mix to optimize costs. ✅
- License Right-Sizing: Business Basic, Standard, Premium and E3 serve most SMB needs. Not everyone needs E5!
- Non-Profit Benefits: Canadian non-profits can get M365 licenses for free – up to 300 users on Business Basic.
- Stay Informed: Microsoft’s pricing and licensing rules change – keep an eye on updates to stay ahead.
Final Thoughts
In today’s business climate, every dollar counts. The right M365 strategy will keep your IT budget out of the penalty box while giving your team the tools they need. As we say in Canada: work smarter, save money, and keep your stick on the ice!