Microsoft 365 licensing glossary

A

A1, A3 and A5

The Microsoft 365 plans for schools, colleges and universities. Office 365 A1 is donated by Microsoft at no cost to eligible institutions and gives staff and students Teams and the web versions of Word, Excel, PowerPoint, OneNote and Outlook. Microsoft 365 Education A3 adds the desktop apps, Intune and Microsoft Entra ID, and A5 adds advanced security, analytics and Power BI Pro.

Microsoft doesn’t publish A3 and A5 prices, so they are quoted per institution. See Microsoft 365 for education in Kenya.

Add-on

A licence that adds a capability to a plan a user already has, rather than replacing it. Microsoft 365 Copilot Business, Teams Phone and Teams Premium are add-ons: each needs a qualifying base plan, and you only buy them for the people who need them.

Admin center (Microsoft 365 admin center)

The web portal where your administrators add users, assign licences, manage domains and see billing. It also shows which partner is linked to your organisation, under Settings and then Partner relationships.

Annual commitment

A subscription term of one year. You agree to keep a set number of licences for twelve months and, in return, pay a lower monthly rate than on a month-to-month subscription. You can add licences for new staff during the year; reducing them is normally only possible at renewal.

Microsoft sets the rules on cancellation windows and refunds, and they change from time to time, so check the current terms with us before you commit. Every price on our pricing page is an annual-commitment price.

Apps for business

Microsoft 365 Apps for business gives each user the desktop versions of Word, Excel, PowerPoint and Outlook on up to five PCs or Macs, five tablets and five phones, plus 1 TB of OneDrive storage. It has no business email and no Teams, so it suits organisations that already run email elsewhere. See Microsoft 365 Apps for business.

Archive mailbox

A second storage area for older email, separate from the main mailbox. Business Basic and Standard include a 50 GB archive; Business Premium and E3 include a 1.5 TB archive, which matters for firms that must keep years of correspondence.

B

Billing frequency

How often you are invoiced, which is separate from how long you are committed. An annual commitment can, depending on the offer, be billed once a year or spread across the year. Ask us which billing options apply to your plan before you sign.

Business Basic

The entry Microsoft 365 business plan: email on your own domain with a 100 GB mailbox, Teams, 1 TB of OneDrive storage and the web and mobile versions of the Office apps, with no desktop apps. It suits staff who mostly need email and Teams on a phone or browser. See Microsoft 365 Business Basic.

Business Premium

Everything in Business Standard plus security: Intune device management, Defender for Business, Defender for Office 365 Plan 1, Conditional Access and Purview data loss prevention. It is the plan for organisations of up to 300 users that hold client, patient, payroll or financial data. See Microsoft 365 Business Premium.

Business Standard

Business Basic plus the desktop Office apps, webinars and extra apps such as Bookings, Planner, Forms, Loop and Clipchamp. It has no device management or advanced security. See Microsoft 365 Business Standard, or compare it on Business Basic vs Business Standard.

C

Conditional Access

A Microsoft Entra ID feature that decides whether a sign-in is allowed, based on rules you set: who the user is, which device they use, where they are and how risky the sign-in looks. For example, you can require multifactor sign-in outside the office or block sign-ins from unmanaged laptops. It is included in Business Premium and in E3 and above, not in Business Basic or Standard.

Copilot Chat

Microsoft 365 Copilot Chat is secure AI chat for work, available at no additional cost to users with an eligible Microsoft 365 subscription. It uses web information and the files you upload, with enterprise data protection. Agents inside it are billed on a metered basis and need an Azure subscription. See Microsoft 365 Copilot Chat.

Copilot Studio

Microsoft’s tool for building your own AI agents. It is paid for with Copilot Credits, either as tenant-wide credit packs or pay-as-you-go through Azure, rather than per user. See Copilot Studio.

CSP (Cloud Solution Provider)

Microsoft’s programme that lets partners sell Microsoft cloud subscriptions, such as Microsoft 365, under their own billing and support. When you buy through a CSP partner, the partner invoices you, manages the subscription with you and is your first point of contact; Microsoft still runs the service.

For a Kenyan organisation, this usually means a local invoice in KES or USD with VAT shown, and someone nearby who knows your setup. See buying Microsoft 365 in Kenya.

Custom domain

Your own web address, such as yourfirm.co.ke, used for email in place of a Microsoft address. You prove you own it by adding a record Microsoft gives you to your DNS, so you need the login for wherever the domain is registered.

D

Data loss prevention (DLP)

Rules in Microsoft Purview that spot sensitive information, such as ID numbers or bank details, and stop or warn before it leaves by email or a shared file. Included in Business Premium and E3 and above. It supports, but doesn’t by itself deliver, compliance with the Data Protection Act 2019; you also need policies and processes.

Defender for Business

Microsoft Defender for Business protects laptops and desktops against ransomware and malware, and helps you spot and respond to attacks. It is included in Business Premium and is also sold on its own. See Microsoft 365 security.

Defender for Office 365

Protection for email and collaboration against phishing links and harmful attachments. Plan 1 is in Business Premium and E3; Plan 2, with more advanced protection and investigation, is in E5.

E

E3

Microsoft 365 E3 is the core enterprise plan, with no user limit. It includes the Office apps, Exchange Plan 2 with a 1.5 TB archive, Windows 11 Enterprise E3, Intune, Entra ID Plan 1, Defender for Endpoint Plan 1 and Purview Information Protection. See Microsoft 365 E3.

E5

Microsoft 365 E5 adds advanced security and compliance to E3: Entra ID Plan 2, Defender for Endpoint Plan 2, Defender for Office 365 Plan 2, Defender for Identity, insider risk management, eDiscovery Premium, Power BI Pro and Teams Phone. See Microsoft 365 E5 or compare on Microsoft 365 E3 vs E5.

E7

Microsoft 365 E7, which Microsoft calls “The Frontier Suite”, bundles E5 with Microsoft 365 Copilot, Agent 365 and the Microsoft Entra Suite. It is aimed at organisations rolling out AI and agents at scale. See Microsoft 365 E7.

Entra ID

Microsoft Entra ID, formerly Azure Active Directory, is the identity service behind every Microsoft 365 sign-in. The free version comes with every tenant; Plan 1 adds Conditional Access and is in Business Premium, E3 and F3; Plan 2 adds risk-based protection and is in E5 and E7.

Exchange Online

Microsoft’s hosted email and calendar service, the part of Microsoft 365 that runs your mailboxes. Business plans include Exchange Plan 1 with a 100 GB mailbox; E3 and E5 include Exchange Plan 2. Moving to it from cPanel, Zimbra or Google Workspace is covered on Microsoft 365 migration.

F

F1 and F3

The frontline plans. Microsoft 365 F1 gives Teams, read-only web and mobile Office apps and 2 GB of storage, with no full mailbox. F3 adds web and mobile Office apps that can edit, a 2 GB mailbox and Windows 11 Enterprise E3. See Microsoft 365 F3.

Frontline worker

Microsoft’s term for staff who work mainly away from a desk, on shared devices or a phone: drivers, nurses, shop and factory staff, field officers. The F plans are priced for them. Microsoft’s terms set who counts as a frontline worker, so check eligibility with us before you buy F licences.

G

GDAP (granular delegated admin privileges)

The way a partner gets admin access to your tenant. You approve which roles the partner has and for how long, so they get only the access they need to support you, and you can remove it at any time.

Global Administrator

The most powerful admin role in Microsoft 365, with access to almost every setting and most data. Microsoft recommends keeping the number of Global Administrators as small as possible; give other admins narrower roles.

I

Intune

Microsoft Intune manages and secures devices: it enforces encryption and passwords on laptops, keeps them updated, and lets you wipe company data from a lost phone without touching personal photos. Plan 1 is included in Business Premium, E3, E5, F1 and F3.

L

Licence

The right for one user to use a Microsoft 365 plan for the length of the subscription. Microsoft 365 licences are per user, not per device: one licensed person can use the apps on several of their own devices, within the plan’s limits.

Licence assignment

Giving a purchased licence to a named user in the admin center. Licences you have bought but not assigned still cost money, so review assignments when staff leave and before every renewal. Because licences are assigned per person, you can mix plans: Business Premium for finance, Business Basic for drivers.

M

MFA (multifactor authentication)

Signing in with something you know (a password) plus something you have, such as a code or approval in the Microsoft Authenticator app on your phone. It is available in every Microsoft 365 plan and is the single most useful protection against stolen passwords.

Microsoft 365 Copilot

The paid AI assistant that works inside Word, Excel, PowerPoint, Outlook and Teams and is grounded in your organisation’s own files, email and meetings. It is an add-on licence (Microsoft 365 Copilot Business for business plans), or bundled into Business Standard or Premium with Copilot and into E7. We confirm availability for your tenant and plan before you commit. See Microsoft 365 Copilot.

Microsoft 365 vs Office 365

Office 365 is the older name for the apps and online services: email, Teams, SharePoint and OneDrive. Microsoft 365 plans include those and, depending on the plan, add device management, Windows licences and more security. The business plans were renamed from Office 365 to Microsoft 365 in 2020, which is why many people in Kenya still search for “Office 365”. Office 365 E1, E3 and E5 are still sold as enterprise suites.

Microsoft Customer Agreement (MCA)

The agreement between your organisation and Microsoft that covers cloud subscriptions bought through a CSP partner. Microsoft requires the customer to accept it before a partner can place the first order, and your administrator can accept it in the Microsoft 365 admin center (Microsoft Learn, checked 4 October 2026). Your commercial terms with the partner, such as price and invoicing, sit alongside it.

Monthly commitment

A subscription you can reduce or end month by month. Microsoft charges more per month for this flexibility on its business plans, and enterprise, frontline and non-profit plans are sold on annual commitment only.

N

NCE (New Commerce Experience)

The rules Microsoft uses for subscriptions sold through CSP partners. Under NCE you choose a term (monthly or annual, and longer for some products), and the term decides your price and how flexible you are: annual terms cost less but can’t normally be reduced until renewal.

NCE also sets a short window after purchase in which a subscription can be cancelled, and Microsoft revises these rules from time to time. Check the current terms with us before you buy or change licences.

Non-profit grant

Microsoft’s donation of Microsoft 365 Business Basic, free for up to 300 users, to eligible non-profits and NGOs. Business Standard, Business Premium, E3 and E5 are offered at non-profit discounts rather than as grants. Grants cover paid staff and unpaid executives; discounted licences can also cover volunteers.

The organisation registers itself, through an employee or strategic volunteer; a partner can’t register on its behalf, but we can help you prepare. See Microsoft 365 for non-profits in Kenya.

O

Office 365 E1, E3 and E5

Microsoft’s enterprise suites without the Windows and device-management parts of Microsoft 365. Office 365 E1 gives lightweight web and mobile apps and basic security; E3 adds the productivity apps and identity management; E5 adds core security, compliance and analytics. Don’t confuse them with Microsoft 365 E3 and E5, which also include Windows Enterprise and Intune. See Microsoft 365 E3 vs E5.

OneDrive

Each user’s personal cloud storage for work files, 1 TB per user on the business plans. Files sync to the laptop, can be shared by link instead of attachment, and can be restored after accidental deletion within Microsoft’s retention limits. Microsoft doesn’t replace a full backup; see Microsoft 365 backup.

P

Partner relationship

The link between your tenant and a Microsoft partner, for example as your reseller or as a delegated admin. Your Global Administrator can see every partner linked to the organisation in the admin center under Settings, then Partner relationships.

Perpetual licence

A one-off purchase that lets you keep using a specific version of the software indefinitely, without later versions or cloud services. Microsoft 365 is the opposite: a subscription that keeps your apps current and includes email, storage and Teams for as long as you pay. If a seller offers a cheap “lifetime” Office key, ask exactly what it is and who it is licensed to.

Product Terms

Microsoft’s published rules for each product: who may use it, on how many devices, what other licences it needs and what rights come with it. Your agreement with Microsoft points to the Product Terms, so when a question comes up about whether a use is allowed, that is where the answer sits. We read the relevant parts with you when a licensing question isn’t clear-cut.

Purview

Microsoft Purview is the family of data protection and compliance tools: sensitivity labels, data loss prevention, retention, audit and eDiscovery. Business Premium and E3 include Information Protection Plan 1; E5 adds Plan 2, insider risk management and eDiscovery Premium.

R

Renewal

The end of a subscription term, when it continues for another term unless you change it. Renewal is the moment to reduce licences, move people between plans or drop add-ons nobody uses, so review usage a month or two before.

Reseller

A company that sells Microsoft licences to you. In the CSP programme, some resellers buy through a distributor (an indirect provider) and others deal with Microsoft directly. What matters to you is that licences go into your own tenant, in your organisation’s name, with a proper invoice.

S

Seat

Another word for one user licence. “Twenty seats of Business Premium” means twenty user licences. Quotes and invoices are usually priced per seat per month.

Seat cap

The most users a plan allows. Business Basic, Standard and Premium are capped at 300 users each; E3, E5, E7, F1 and F3 have no limit. If you are growing towards 300, read Microsoft 365 business vs enterprise.

Shared mailbox

A mailbox such as info@ or accounts@ that several people read and send from. Within Microsoft’s size limits it usually needs no licence of its own, which saves paying for “users” that are really team addresses.

SharePoint

Microsoft’s service for shared team files, intranet pages and document libraries. Every Team in Microsoft Teams stores its files in SharePoint, so permissions set there decide who sees what.

Solutions Partner

A Microsoft designation that recognises a partner’s proven capability in one of six solution areas: Modern Work, Security, Data & AI (Azure), Infrastructure (Azure), Digital & App Innovation (Azure) and Business Applications. Partners earn it through a capability score based on customer growth, certified staff and customer success. Solutions Partner designations replaced the old Gold and Silver competencies in 2022. See how to choose a Microsoft partner in Kenya.

Specialization

A narrower Microsoft accreditation, such as one for Teams calling, that a partner can earn only after holding the related Solutions Partner designation. It shows deeper experience in one technical scenario.

T

Teams

Microsoft Teams is the chat, meetings and calling app in Microsoft 365. Most plans can be bought with or without it, and large organisations can buy Microsoft Teams Enterprise on its own. See Microsoft Teams Enterprise.

Teams Phone

An add-on that turns Teams into a cloud phone system with a phone number per user. It needs a Teams licence and a way to connect to the phone network: a Microsoft Calling Plan where available, Operator Connect through a participating operator, or Direct Routing. It is included in E5 and E7. Ask us which connection options work for your offices.

Teams Premium

An add-on to Teams Enterprise that adds AI-powered meetings and calls, personalised meeting experiences and extra protection for sensitive meetings.

Tenant

Your organisation’s own instance of Microsoft 365: the container that holds your users, licences, domains, mailboxes, files and settings. Every tenant gets a default address ending in .onmicrosoft.com, which stays with it even after you add your own domain, so choose the name with care. Merging two tenants, for example after a merger, needs a tenant-to-tenant migration.

V

VAT on licences in Kenya

Value added tax, charged in Kenya at 16%. Every Microsoft 365 price on our site excludes VAT, and VAT is added to our invoice, because Priori is registered for VAT in Kenya. Invoices are in KES or USD, whichever suits your finance team. See the Microsoft 365 pricing guide.

W

“With or without Teams”

Microsoft sells most Microsoft 365 and Office 365 suites in two versions: one that includes Teams and a lower-priced one that doesn’t, with Teams available separately. Choose the version without Teams only if you already use another meetings tool or will buy Teams Enterprise on its own. Our enterprise prices are for the version with Teams; ask us for the other.