• Jun 20, 2018 Cloud Storage in Office 365 E1 vs E3. If we look into the standard services of Office 365, then there is almost no difference between the E1 and the E3 version. But there is one difference between the two, and that is how much personal cloud storage you get. Office 365 E1 comes with “only” 1TB cloud storage for your Onedrive for Business.
• Microsoft maintains a license cap on Office 365 E1 licenses on new tenants. Please contact your Microsoft licensing executive for further questions on this.

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There is often a great deal of confusion around how Microsoft Teams is licensed, as the marketing material from Microsoft often doesn’t provide adequate detail about the proper ways to license users and systems for Teams.

To hopefully simplify the guidelines, I’ve written this blog to provide a comprehensive breakdown of how to license your users given your specific needs. I’ll leave out the legacy information on Microsoft Skype for Business and concentrate solely on Teams.

All pricing provided in this blog is provided in US dollars and priced at MSRP through the CSP program.

Microsoft Teams Voice Licenses and Add-Ons:

Phone System ($8/user/month)

Phone System licenses provide the ability for a user to receive and transfer calls. Users can make online, peer-to-peer calls using Teams, but they will need an additional Calling Plan add-on to be able to make outbound calls using Microsoft as the PSTN calling provider.

Phone System is available as an add-on SKU or is included within the Office 365 E5 plan. As of today, in order to use the Phone System plan, the user needs an Enterprise Office 365 subscription (E1, E3, E5).

Calling Plan ($12/user/month Domestic, $24/user/month Domestic + International)

Calling Plan licenses provide users the ability to make outbound calls using Microsoft as the voice provider.

These can be purchased as domestic per user (3,000 minutes/user/month pooled) or domestic AND international per user (3,000 minutes/user/month pooled domestic, 600 minutes/user/month pooled international). Drivers casper.

Audio Conferencing ($4/user/month)

Audio Conferencing provides the ability to create a Teams meeting that contains a PSTN dial-in number for users to call into. This can be added to basically all Office 365 subscriptions (including Business Premium or Skype for Business Online Plan 2 Standalone) but is also included within the Enterprise E5 plan

Cloud Voicemail (included in Exchange Online Plan 2)

A Cloud Voicemail license stores voicemail in Exchange Online and allows users to check their voicemail in both the Outlook and Teams apps. If a user has Office 365 E1, they would not be able to use Cloud Voicemail as the Office 365 E1 plan only comes with Exchange Online Plan 1.

Now that the different plans are outlined, I’ll build out a few use cases to help narrow down which options best fit your needs.

In this scenario, the organization would like to use Office 365 E1 as the base plan to license their users for voice. This is the lowest cost method as of today that is fully supported by Microsoft for all Teams functionality. I wouldn’t typically recommend this approach as it doesn’t include the full Office applications downloads, but it does provide the licensing needed to leverage Teams for Enterprise Voice.

• Office 365 Enterprise E1 Plan: $8/user/month
• Exchange Online (Plan 2): $8/user/month (needed for voicemail)
• Phone System Add-on: $8/user/month
• Calling Plan Add-on
  • Domestic: $12/user/month
  • Domestic: International @ $24/user/month
• Audio Conferencing: $4/user/month (Optional)

Total Cost per user = $40/user/month with the domestic Calling Plan and Audio Conferencing

Option #2: Office 365 E3 Approach

In this scenario, the organization would like to use Office 365 E3 as the base plan to license their users for voice.

• Office 365 Enterprise E3 Plan: $20/user/month (contains the following subscription)
  • Exchange Online (Plan 2)
• Phone System Add-on: $8/user/month
• Calling Plan Add-on
  • Domestic: $12/user/month
  • Domestic: International @ $24/user/month
• Audio Conferencing: $4/user/month (Optional)

Total Cost per user = $44/user/month with the domestic Calling Plan

Option #3: Office 365 E5 Approach

In this scenario, the organization would like to use Office 365 E5 as the base plan to license their users for voice.

• Office 365 Enterprise E5 Plan: $35/user/month (contains all of the following subscriptions)
  • Exchange Online (Plan 2)
  • Phone System Plan
  • Audio Conferencing
• Calling Plan
  • Domestic: $12/user/month
  • Domestic & International: $24/user/month

Total Cost per user = $47/user/month with the domestic Calling Plan.

The E5 subscription comes with additional benefits that should be evaluated before dismissing this as a viable option. Below is a summary of the features that come with E5 that do not come with E3 or E1.

• Office 365 Advanced Threat Protection: provides protection across Office 365 workloads including Exchange Online, SharePoint Online, OneDrive, and Teams.
• Power BI Pro: Unify data from many sources to create interactive, immersive dashboards and reports that provide actionable insights and drive business results.
• Advanced eDiscovery: provides an end-to-end workflow to preserve, collect, review, analyze, and export content that is responsive to your organization’s internal and external investigations.

Licensing Microsoft Teams with Microsoft 365 Instead of Office 365

With the Microsoft 365 bundles available today, the complexity does not increase greatly. For the scenarios above, below are the impacts for organizations needing to leverage the full voice capabilities of Microsoft Teams:

• Microsoft 365 Business: Need to upgrade to the Enterprise options in order to qualify for the add-ons as of today
• Microsoft 365 Enterprise E3: Need to purchase the Phone System, Calling Plan, and Audio Conferencing Add-ons for complete voice functionality
• Microsoft 365 Enterprise E5: Need to purchase the Calling Plan for complete voice functionality

Option #4: Microsoft 365 Business Voice (Coming Soon to US Customers, pricing not released)

There are new plans coming that will make the cost of using Teams as their business phone system far more desirable for small businesses. These plans are currently live in the UK and Canada, and Microsoft is hoping to have them released in the United States in Q1 of 2020. We’ll keep this page updated with the latest information.

These plans would allow organizations that use the small and medium business plans to use Teams as their phone system, which would be a big game changer for organizations that couldn’t justify the current price bump to E3 or E5.

The Microsoft Business Voice plan can be added to any of the plans below:

• Office 365 Business Essentials
• Office 365 Business Premium
• Office 365 E1
• Office 365 E3
• Office 365 A1
• Office 365 A3
• Microsoft 365 Business
• Microsoft 365 E3
• Microsoft 365 A3

Not all the details (including price) are released yet for this plan, but the Microsoft 365 Business Voice plan will include all the following:

• Cloud-based phone system with advanced features including call transfer, multi-level auto attendants, and call queues.
• Domestic calling plan including 1,200 minutes per user.
• Dial-in audio conferencing for up to 250 people per meeting.
• Call from anywhere, on any device through the Microsoft Teams app on desktop, mobile, web, and desk phones.

Business Voice requires an Office 365 subscription that includes Microsoft Teams. It is an add-on subscription for up to 300 users that cannot be used standalone. If your organization exceeds the 300-user maximum, one of the earlier three methods may be the preferred route. Again, we will continue to update this blog as this plan reaches general availability to ensure accuracy.

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Direct Routing

Microsoft Direct Routing allows you to connect a supported, customer-provided Session Border Controller (SBC) to Microsoft Phone System. This architecture has several use cases, and below are a few examples that would lead a company to implement Direct Routing.

• Customer has a long-term SIP contract in place that company wishes to leverage instead of Microsoft Calling Plans
• Customer has found a more cost-effective SIP provider given a company’s calling trends and cost of Microsoft Calling Plans
• An organization needs call recording, which isn’t supported on Microsoft Teams without Direct Routing and a call recording solution implemented
• Configuring interoperability between customer-owned telephony equipment, such as 3^rd party PBX, analog devices, and Microsoft Phone System
• Customer needs to have Overhead Paging or Call Centers configured with the phone system
• Microsoft Calling Plans are not available in your Country

Microsoft E1 Vs Business Basic

With Direct Routing, the customer can leverage a different SIP provider, and in this instance they would NOT need the Microsoft calling plan and could leverage their own SIP provider. They would still need the Microsoft Phone System plan (either $8/user/month as a standalone or included with E5).

Depending on their conferencing needs, they could leverage the SIP provider for the conference bridges or use the Audio Conferencing plan from Microsoft. Direct Routing customers certainly can leverage the Microsoft Calling Plans too if they did not want to use their own SIP provider. The Audio Conferencing licensing can be tricky with Direct Routing, and more information can be found here.

Common Area Phones and Meeting Rooms

There are two different licensing options for Teams devices that are not tied to a user, and they are the Common Area Phone License and the Meeting Room License. The features included in each are outlined below.

• Common Area Phone: $8/device/month
  • Includes the Phone System Plan
  • Still requires a calling plan for dialing out
• Meeting Room: $15/device/month
  • Includes the Teams application license, Phone System Plan, Audio Conferencing Plan, and Intune for device management
  • Still requires a calling plan for dialing out

The Common Area Phone license is best suited for devices such as kitchen phones, copy room phones, warehouse phones, etc. The Meeting Room license is best suited for conference rooms where the room may initiate an ad-hoc meeting and need to leverage the collaborative features of Teams.

Microsoft E1 Pricing

Communication Credits

Communications Credits are a convenient way to pay for Audio Conferencing and Calling Plan minutes. I advise all clients to setup communication credits as they almost always are used in some fashion to ensure users have full functionality. A few use cases of Communication Credits are outlined below.

Microsoft E1 Vs F3

• Add toll-free numbers to use with Audio Conferencing meetings, auto attendants, or call queues. Toll-free calls are billed per minute and require a positive Communications Credits balance.
• Dialing out from an Audio Conference meeting to add someone else from anywhere in the world.
• Dialing out from an Audio Conference meeting to your mobile phone without the Microsoft Teams app installed and to destinations that aren’t already included in your subscription.
• Dial any international phone number when you have Domestic Calling Plan
• Dial international phone numbers beyond what is included in a Domestic and International Calling Plan
• Dial out and pay per minute once you have exhausted your monthly minute allotment.

Keep in mind, Communication Credits are NOT a replacement for a calling plan. They are intended for the use cases above in addition to providing calling plans to users.

If you would like to discuss the licensing options further, I would be happy to discuss what I know. Just shoot an email to info@pei.com, and I’ll reach out to you directly.

Martin Feehan, Director of Client Relations

Useful Resources for Further Reading

Microsoft 365 F1

Compare Office 365 Enterprise Plans

Compare Exchange Online Plans

Microsoft Teams Add-On Licensing

What is Microsoft 365 Business Voice?

Calling Plans for Office 365

Microsoft Calling Plan Rates