Office 365 E1: Features, Pricing & Who Should Use It

Office 365 E1 is Microsoft’s entry-level enterprise plan, priced at $10.00 per month per user on an annual commitment. It’s built for teams that work in browsers and need email, cloud storage, and collaboration tools—without the cost of desktop Office applications. You’re not getting Word or Excel installed on your machine. But you get the web versions, Teams, SharePoint, and a 50 GB mailbox. For certain types of organizations and worker profiles, it’s the perfect fit. For others, it’s actually overkill.

The most common question we hear: should I pick E1 or pay a bit more for E3? That depends entirely on how your people work. Spoiler: roughly half of every E1 deployment we’ve seen belongs on a different tier. Some users need more, some need way less. By the end of this guide, you’ll know exactly where you fit.

• What’s actually included in Office 365 E1
• Real pricing breakdown and no-Teams SKU details
• How it stacks up against E3 and E5
• Who should actually buy E1 (and who shouldn’t)
• How to activate and get started
• Common gotchas and limits

What Office 365 E1 Includes (And What It Doesn’t)

Office 365 E1 includes Exchange Online email, Outlook on the web, the web versions of Word, Excel, PowerPoint and OneNote, SharePoint Online, OneDrive for Business, and Teams. That’s the headline. Let me break down what each piece actually does.

Email and storage. You get a 50 GB mailbox in Exchange Online. That’s half of what E3 users get. It’s enough for most workers, but if someone has been at your company for five years and emails a lot, they might start bumping against the limit. OneDrive gives you 1 TB of personal cloud storage per user. Pretty standard. SharePoint comes with it too, for team collaboration and document libraries.

Web and mobile apps. Here’s the big one: E1 provides the web and mobile versions of Word, Excel, PowerPoint and OneNote. You’re not installing anything. Open a browser, sign in to Office.com, and you’re working. On your phone, you can use the mobile Office apps on up to five devices with screens 10.1 inches or smaller. Laptop? Desktop? Nope. Browser only.

Teams and communication. The Office 365 E1 SKU includes Teams; Office 365 E1 (no Teams) does not. There’s actually a separate SKU without Teams if you don’t need it—and it costs less. With Teams included, you get unlimited chat, online meetings, file sharing, and live events.

What’s missing. It does not include installed desktop apps, Intune, Windows Enterprise, or the Microsoft 365 E3 and E5 security and compliance layers. No device management. No advanced security. No Defender for Endpoint. Your identity protection is just the free tier of Entra ID. If you need to manage a fleet of employee devices or comply with strict data loss prevention rules, E1 isn’t your answer.

Office 365 E1 Pricing: The Numbers and SKU Options

Let’s talk money. Office 365 E1 is $120.00 per user per year ($10.00 per month), and E1 held steady when Microsoft raised prices on other plans in July 2026. That’s genuinely affordable when you’re licensing hundreds of people.

The math at scale: For 100 users, that’s $1,000 a month or $12,000 a year. For 300 users, $36,000 annually. No seat cap either—you can license as many users as you need.

With or without Teams. Here’s a wrinkle: there are actually two E1 SKUs. The standard E1 includes Teams. But if your organization doesn’t need Teams (maybe you’re using Slack or something else), Office 365 E1 (no Teams) is $81.48 per user per year. That’s $6.79 a month. Saves money if you genuinely don’t want it. In my experience, though, most orgs bundle Teams.

One-month trial available. Microsoft offers a free one-month trial before charging you. Good way to kick the tires before committing.

Office 365 E1 vs E3: The Key Differences

This is the decision that matters. Should you go with E1 or bite the bullet and pay for E3? Here’s what separates them.

The jump from $10 to $26 sounds steep until you realize what E3 gets you. Installed desktop apps start at Office 365 E3, licensed per user on up to five PCs or Macs, five tablets and five phones. If your people need to write reports offline, edit spreadsheets on their laptop without internet, or use Access databases, they need E3 or higher. E1 web apps are good for reading, light editing, and collaboration—but they’re not full-featured.

E3 also includes device management. Your IT team can enforce encryption, password policies, and remote wipe if someone loses their laptop. E1? You’re on your own there.

Who Should Actually Use Office 365 E1

E1 is enough for people who work in a browser all day, people on a shared or virtual desktop where the desktop apps are licensed another way, and contractors or seasonal staff who need a company mailbox and Teams but no installed software.

That covers a few specific scenarios:

• Call center or support teams. They’re answering emails, checking a shared inbox, maybe pulling up a knowledge base in OneNote. They don’t create fancy documents. E1 fits perfectly.
• Frontline and shift workers. Retail, hospitality, field service. They need a mailbox, access to schedules in Teams, maybe a shared document. They’re not working offline at a desk for eight hours.
• Contractors and seasonal staff. Short-term engagement. You don’t want to license them for three years of desktop features they’ll use for three months.
• Virtual desktop infrastructure (VDI). Your desktops run in the cloud on a shared machine. The IT team licenses Office separately for the whole desktop pool. Each user just needs email and web apps. E1 wins here.
• Organizations that already have Office installed elsewhere. Maybe you bought Microsoft 365 Apps for Enterprise separately for power users, and now you need basic email and Teams for everyone else. E1 as a base layer makes sense.

But here’s the thing: the E1 plan does not allow installation of applications on devices — for instance, laptops, smartphones, or tablets — and therefore a constant, secure Internet connection is required to use this plan for your business. You have to rely on web apps. No WiFi? No work. That’s a hard constraint.

How to Get Started with Office 365 E1

Actually buying and setting up E1 is straightforward. Here’s the path:

1. Go to Microsoft’s website. Visit microsoft.com and search for Office 365 E1 or navigate to the enterprise plans section. Visit the Microsoft Office 365 website and sign up for the E1 plan.
2. Choose your SKU. Decide if you want Teams included or the (no Teams) version. Pick annual or month-to-month billing. Annual is cheaper but locks you in.
3. Start your trial. You’ll get a free one-month trial to test it out. No credit card charges during that period, but you will need one on file.
4. Set up your tenant. Once you activate, you’ll land in the Microsoft 365 admin center. This is where you manage everything from now on.
5. Create user accounts. Once subscribed, you can create user accounts for your employees. Each user will receive a unique login to access the Office 365 services.
6. Configure services. Set email routing, create SharePoint sites, configure Teams channels. Each service has its own settings.
7. Assign licenses. Licensed per named user. Assign the subscription in the Microsoft 365 admin center or through your CSP provisioning process to each user who needs access.

The most frustrating part, in my experience, is getting email set up right if you’re bringing over a domain. DNS records, MX entries, SPF, DKIM—it all has to line up or mail bounces. Set aside a day for that. The actual license activation? That’s minutes.

Office 365 E1 vs E5 and Other Enterprise Plans

You’ve probably heard of E5. It’s the premium tier, and it costs roughly four times as much. E5 adds everything: advanced threat protection, eDiscovery with delete, Security Copilot, Power BI Pro. If you’re a regulated industry—healthcare, finance, legal—or you need serious security controls, E5 is for you. E1? It’s bare-bones security.

There’s also the F-series (F1, F3). Those are for frontline and shift workers specifically and cost even less than E1—around $2 to $8 a month. If someone’s never going to open Outlook on the desktop, never needs SharePoint, and just needs Teams and basic cloud storage, F3 might be cheaper than E1.

In my experience, if you’re comparing E1 to anything, it’s usually E3. E5 is a different conversation. And F-series is only relevant if you have a large frontline workforce and need to trim budget aggressively.

Common Gotchas and Limits

Mailbox size adds up over time. That 50 GB sounds reasonable until a user has been storing five years of emails. Archive rules help, but it’s not unlimited. If heavy email users aren’t managing their mailbox, they’ll hit the wall.

Web apps aren’t as powerful as desktop. Formulas, conditional formatting, pivot tables—some features work differently or not at all in the web version of Excel. If you need advanced spreadsheet skills, expect friction.

Desktop apps require a separate license. You can’t just install Word from a desktop E1 account. You need Microsoft 365 Apps (or Office 2024) licensed separately. Plan for that cost if you realize later you need it.

No Copilot. Microsoft 365 Copilot requires Microsoft 365 E3, E5, Business Standard, or Business Premium as a base plan. If you’re betting on AI-assisted writing or analysis, you’ll have to upgrade.

Intune management isn’t included. You can’t push device settings, enforce compliance, or remotely manage fleet-wide. That’s E3 and above.

Frequently Asked Questions

Does Office 365 E1 include desktop Office apps like Word and Excel?

No. E1 gives you only web and mobile versions. You can’t install Word or Excel on your laptop. If desktop applications are non-negotiable, you need E3 or higher—or add Microsoft 365 Apps for Enterprise separately.

Can I upgrade from E1 to E3 later?

Absolutely. In the Microsoft 365 admin center, you can change a user’s license from E1 to E3. You’ll be charged the difference for the remainder of the term. No big deal. In my experience, most teams start with E1, then realize they need desktop apps and move some or all users up within the first quarter.

What’s the difference between Office 365 E1 and Microsoft 365 E1?

Microsoft renamed most small-business Office 365 plans to Microsoft 365 on April 21, 2020, but kept the Office 365 name on the Enterprise E1, E3, and E5 plans. There’s no product called “Microsoft 365 E1.” The entry-level enterprise plan is Office 365 E1 (productivity only). If you want the full security and device management bundle, you’d step up to Microsoft 365 E3 ($39/month).

Is E1 enough for remote workers?

It depends. If they have solid internet and work mostly in a browser or mobile—email, Teams, collaborative documents—yes, E1 is fine. If they travel to places with spotty WiFi and need to work offline in desktop Word and Excel, they’ll struggle. Constant internet connectivity is a hard requirement for E1.

How does E1 compare to Business Basic?

Office 365 E1 and Microsoft 365 Business Basic are actually very similar. Business Basic is for orgs under 300 employees and also costs around $7/month. E1 has no user cap. If you’re small and wondering which to pick, Business Basic works fine. If you’re growing and might exceed 300 users, start with E1 instead and avoid a migration later.