Microsoft 365 E5 Review 2026: Buying the Whole Security Stack at Once

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E5 bundles the advanced Defender products, Entra ID P2, the full Purview set, Power BI Pro and Teams Phone into one per-user licence. It is a genuine bundle discount against buying those pieces separately, and the honest test is whether you would deploy enough of it to beat E3 plus a short list of add-ons.

1. Buy it if you would deploy at least three of the major components: advanced endpoint protection, advanced mail protection, Entra ID P2, the full compliance set or the analytics tools.
2. Buy it if you are consolidating security vendors, because retiring separate endpoint, mail-gateway and cloud-app products changes the arithmetic well beyond the licence line.
3. Buy it if regulatory obligations require the advanced Purview components, which E3 does not include at any level.
4. Skip it if you can name only one component you need. E3 plus that single add-on is normally cheaper.
5. Skip it if you have no security operations capability, because the advanced tooling produces signals that need somebody to act on them.
6. Mix it. Licensing a security and compliance group on E5 while the rest of the organisation stays on E3 is legitimate for most components, though not all.

E5 is no longer the top of the range. Microsoft now sells E7, which it describes as a strict superset of E5 adding Microsoft 365 Copilot, the Entra Suite, Agent 365, Copilot Studio and Security Copilot.

If you already know you will use most of it you can stop here. The rest builds the E3-plus-add-ons comparison properly and covers what it takes to operate what you have bought.

Why it happens

The security half is the largest part of the bundle. Defender for Endpoint Plan 2 adds endpoint detection and response, automated investigation and advanced hunting over raw telemetry on top of the Plan 1 protections that E3 already carries. Defender for Office 365 Plan 2 adds threat explorer, campaign views and attack simulation training above the Safe Links and Safe Attachments layer. Defender for Identity watches your on-premises directory for the patterns that precede a domain compromise, and Defender for Cloud Apps gives visibility over the software your staff sign into.

The identity half is Entra ID P2: Privileged Identity Management so administrative roles are activated for a period rather than held permanently, identity protection signals feeding risk-based conditional access, and access reviews so group and role membership is re-justified rather than accumulating quietly for a decade.

The compliance half is the advanced Purview set – premium eDiscovery with legal hold workflow, insider risk management, communications compliance, records management, premium audit and customer lockbox. These are the components organisations most often buy E5 for and least often configure, so they deserve the closest look before purchase rather than after.

The remainder is productivity and voice: Power BI Pro for every licensed user, Teams Phone and audio conferencing. Power BI Pro alone accounts for a noticeable share of the bundle’s value in organisations that were buying it separately for a large group, and it is the line most often forgotten when people build the comparison.

Build the alternative properly before deciding. Take E3 as the base and add only what you would deploy in the first twelve months, choosing from the real add-on SKUs: the E5 Security add-on, the E5 Compliance add-on, Defender for Endpoint Plan 2, Defender for Office 365, Entra ID P2, Power BI Pro, Teams Phone and audio conferencing. Price that list against E5 for the same users. One component and E3 plus the add-on wins comfortably. Two and it is close. Three or more and E5 is normally cheaper as well as simpler to administer, because you stop reconciling which users hold which add-on.

Two things have changed since the last generation of E5 comparisons. E3 now includes Defender for Office 365 Plan 1 as of 1 July 2026, so part of what used to justify the step up is already in the base plan. And E7 sits above E5, which matters if the reason you are considering E5 is Copilot: Microsoft 365 Copilot is in E7, not E5, and buying E5 in the hope of getting it is a mistake.

Full reference

What is in E5 and what it costs to reach from E3

Whether you can operate what you have bought

E5 changes the shape of the work rather than reducing it. Advanced hunting is a query language and a discipline. Insider risk management needs policies written with somebody from human resources and legal in the room. Communications compliance needs an agreed scope before it is switched on. Privileged Identity Management changes how administrators do their jobs and will be resisted unless it is introduced deliberately, with the break-glass accounts documented first.

Organisations that get value from E5 have either a small security function of their own or a partner doing that work on a retainer. Those with neither tend to deploy only the parts that need no operating discipline – which are largely the Plan 1 features they already had – and then wonder where the money went.

Buying it in smaller pieces

• The E5 Security and E5 Compliance add-ons exist precisely for organisations in the middle of the range, and they are worth asking for by name because a quote for the full suite will not volunteer them.
• The E5 Security add-on is now also sold on top of Microsoft 365 Business Premium, which matters for firms under 300 seats that want Defender for Endpoint Plan 2 without an enterprise migration.
• Standalone Defender and Entra licences cover a narrow need better than a suite does.
• Microsoft sells versions of the enterprise plans with and without Teams, so read the SKU name on the quote.
• For frontline staff, the F5 Security and F5 Compliance add-ons sit on F1 and F3 and cover most of the same ground at frontline scale.

The factors that sit outside the licence line

1. Vendor consolidation. If E5 lets you retire a separate endpoint product, a mail security gateway and a cloud access broker, the saving is measured across those renewals rather than against E3.
2. Contract timing. If you signed a three-year deal for one of those products last quarter, the duplication is real money and the timing argues for waiting.
3. Headcount shape. Count Power BI Pro only for the people who would otherwise have a licence, not for everybody.
4. Operating capacity. Advanced tooling with nobody watching it is the most expensive kind of shelfware.
5. The tier above. If the real driver is Copilot rather than security, price E7 rather than assuming E5 gets you there.

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