Microsoft 365 E5 represents Microsoft's flagship enterprise offering, combining comprehensive productivity tools with the most advanced security, compliance, and analytics capabilities available. For organizations navigating increasing cyber threats, regulatory requirements, and the need for Zero Trust architecture, E5 delivers an integrated platform that provides enterprise-grade protection without the complexity of managing multiple point solutions. This complete guide explores what Microsoft 365 E5 includes, its top 10 security features, pricing comparison with E3, licensing options, ROI considerations, and why E5 is the premier choice for security-conscious enterprises in 2026.
What is Microsoft 365 E5?
Microsoft 365 E5 is Microsoft's most comprehensive enterprise suite, combining Office 365 E5 productivity applications, Windows 11 Enterprise, and Enterprise Mobility + Security E5 with advanced security, compliance, and analytics capabilities. E5 includes the complete Defender XDR platform, advanced threat intelligence, Microsoft Entra ID Premium P2 for identity protection, Microsoft Purview for information governance and compliance, Power BI Pro for analytics, and advanced voice capabilities, all delivered as an integrated cloud service.
Priced at $57 per user per month, E5 is designed for enterprises requiring the highest levels of security, regulatory compliance capabilities, and business intelligence tools integrated seamlessly with their productivity platform.
Microsoft 365 E5 Components:
- Office 365 E5: Full Office apps, email, SharePoint, Teams, OneDrive
- Windows 11 Enterprise E5: Advanced OS with enhanced security
- Defender XDR: Unified threat protection across endpoint, email, identity, cloud apps
- Entra ID Premium P2: Identity protection, privileged access management
- Microsoft Purview: Advanced compliance, DLP, insider risk management
- Power BI Pro: Business intelligence and analytics
- PSTN Conferencing: Dial-in capabilities for Teams meetings
Top 10 Security Features in Microsoft 365 E5
1. Microsoft Defender for Endpoint Plan 2
Full EDR (Endpoint Detection and Response) protecting all endpoints:
- Advanced threat protection: Behavioral analytics detecting zero-day exploits
- Automated investigation: AI-powered incident analysis and remediation
- Threat hunting: Proactive searching for hidden threats
- Attack surface reduction: Rules preventing exploitation techniques
- Vulnerability management: Continuous assessment and patching guidance
- Endpoint detection and response: Forensic investigation and timeline reconstruction
- Value: Standalone EDR costs $80-120/endpoint/year
2. Microsoft Defender for Office 365 Plan 2
Advanced email and collaboration security:
- Anti-phishing: Machine learning detecting targeted attacks
- Safe Attachments: Sandbox detonation of malicious files
- Safe Links: Time-of-click URL protection
- Attack simulation training: Phishing campaigns and user training
- Threat investigation: Automated investigation and response for email threats
- Value: Comparable solutions cost $3-8/user/month
3. Microsoft Defender for Identity
Active Directory and hybrid identity protection:
- Identity monitoring: Detects compromised accounts and insider threats
- Lateral movement detection: Identifies attackers moving across network
- Attack path analysis: Shows how attackers could reach sensitive assets
- Security posture: Identifies AD misconfigurations
- Real-time protection: Blocks suspicious authentication attempts
- Value: Standalone identity security costs $5-12/user/month
4. Microsoft Defender for Cloud Apps
Cloud Access Security Broker (CASB) protecting SaaS:
- Shadow IT discovery: Identifies unsanctioned cloud applications
- Threat protection: Anomaly detection in cloud app usage
- Data protection: DLP across cloud services
- Compliance monitoring: Cloud app security posture
- App governance: OAuth app risk assessment
- Value: CASB solutions cost $3-8/user/month
5. Defender XDR (Unified Platform)
Correlates all Defender products into unified incidents:
- Automatic correlation: Groups related alerts from all Defender products
- Attack timeline: Visualizes complete attack chain
- Unified investigation: Single console investigating multi-vector threats
- Coordinated response: Remediation across endpoint, email, identity, cloud
- Threat analytics: Emerging threat reports with coverage status
- Value: XDR platforms from other vendors cost $80-200/endpoint/year
6. Microsoft Entra ID Premium P2
Advanced identity and access management:
- Identity Protection: Risk-based conditional access with AI
- Privileged Identity Management (PIM): Just-in-time admin access
- Access Reviews: Periodic validation of user permissions
- Entitlement Management: Automated access request workflows
- Conditional Access: Risk-based authentication policies
- Multi-factor Authentication: Built-in MFA protecting all accounts
- Value: Identity governance tools cost $5-15/user/month
7. Microsoft Purview - Advanced Compliance
Information protection and governance:
- Data loss prevention: Prevent sensitive data exfiltration
- Information protection: Automatic classification and encryption
- Insider risk management: Detecting malicious or risky user behavior
- Information barriers: Prevent unauthorized collaboration
- Communication compliance: Monitor communications for policy violations
- Advanced eDiscovery: Legal hold and investigation capabilities
- Records management: Automated retention and deletion
- Value: DLP and compliance tools cost $3-10/user/month
8. Advanced Threat Analytics
Behavior-based threat detection:
- User and entity behavior analytics (UEBA)
- Anomaly detection across identity and data access
- Machine learning identifying suspicious patterns
- Integration with Microsoft Sentinel for advanced hunting
9. Advanced Audit and Logging
Comprehensive activity monitoring:
- Long-term audit log retention (1 year vs 90 days in E3)
- High-bandwidth audit log access for SIEM integration
- Mailbox auditing for forensics
- SharePoint and OneDrive audit events
- Critical for compliance and incident response
10. Power BI Pro
Business intelligence integrated with security:
- Security dashboards and reports
- Compliance metrics visualization
- Custom analytics on security data
- Executive reporting on security posture
- Value: Power BI Pro costs $10/user/month standalone
Microsoft 365 E3 vs E5: Detailed Comparison
| Feature | E3 ($36/user/month) | E5 ($57/user/month) |
|---|---|---|
| Office Apps | ✓ Full Office 365 suite | ✓ Full Office 365 suite |
| Windows | ✓ Windows 11 Enterprise | ✓ Windows 11 Enterprise |
| Endpoint Protection | Defender Plan 1 (basic) | Defender Plan 2 (full EDR) |
| Email Security | Exchange Online Protection | Defender for Office 365 Plan 2 |
| Identity Protection | ✗ Not included | ✓ Defender for Identity |
| Cloud App Security | ✗ Not included | ✓ Defender for Cloud Apps |
| Unified XDR | ✗ Not available | ✓ Defender XDR platform |
| Azure AD/Entra ID | Premium P1 | Premium P2 (Identity Protection, PIM) |
| Data Loss Prevention | Basic DLP | Advanced DLP + Insider Risk |
| Compliance | Basic retention, eDiscovery | Advanced eDiscovery, records management |
| Analytics | ✗ Not included | ✓ Power BI Pro |
| Voice | ✗ Not included | ✓ PSTN conferencing |
| Audit Retention | 90 days | 1 year |
Microsoft 365 E5 Pricing Options
Full E5 License
$57 per user per month ($684/year)
- Complete productivity + security + compliance
- Best value for comprehensive coverage
- Suitable for most enterprises
E5 Security Add-On
$12 per user per month ($144/year) - adds to E3
- E3 base + E5 security features only
- Excludes Power BI Pro, PSTN, some productivity features
- Good for organizations only needing security upgrades
- Total cost: $36 (E3) + $12 (Security) = $48/user/month
E5 Compliance Add-On
$12 per user per month ($144/year) - adds to E3
- E3 base + E5 compliance features only
- Insider risk, advanced eDiscovery, information governance
- For regulated industries needing compliance without full security suite
Individual Defender Products
- Defender for Endpoint Plan 2: $5.20/device/month
- Defender for Office 365 Plan 2: $5/user/month
- Defender for Identity: $5.60/user/month
- Defender for Cloud Apps: $6/user/month
- Total standalone: $21.80+/user/month (vs $12 E5 Security add-on)
Cost Comparison:
- E3: $36/user/month ($432/year)
- E3 + E5 Security: $48/user/month ($576/year)
- E5 Full: $57/user/month ($684/year)
- E5 vs E3 difference: $21/user/month ($252/year)
- Standalone security products: $80-200/user/year typical
When to Choose E5 vs E3
Choose E5 If You:
- Face sophisticated threats: Advanced persistent threats, targeted attacks
- Need compliance: HIPAA, PCI DSS, SOC 2, GDPR, financial regulations
- Require zero trust: Implementing comprehensive Zero Trust architecture
- Have insider risk concerns: Need to monitor for data theft or policy violations
- Operate in regulated industry: Healthcare, finance, government, legal
- Experienced breaches: Previously suffered security incidents
- Need advanced analytics: Power BI Pro for security and business intelligence
- Want unified security: Prefer integrated Defender XDR over point solutions
- Have high security budget: Can afford $21/user/month premium
Choose E3 If You:
- Basic security sufficient: Limited threat exposure or risk
- Budget constraints: $21/user/month premium unjustified
- Small organization: Under 50 users with simple needs
- Already have security tools: Existing EDR, email security, CASB investments
- Low compliance requirements: No strict regulatory mandates
- Plan future upgrade: Start with E3, upgrade to E5 as budget allows
E5 Security Add-On Strategy
Good middle ground: E3 + E5 Security ($48/user/month)
- Provides all Defender XDR security features
- Saves $9/user/month vs full E5
- Excludes Power BI Pro and PSTN (purchase separately if needed)
- Suitable for security-focused organizations without BI/voice needs
ROI Analysis: Is E5 Worth the Cost?
Direct Cost Avoidance
Standalone security product replacement value:
- EDR solution: $80-120/user/year saved
- Email security gateway: $36-96/user/year saved
- CASB solution: $36-96/user/year saved
- Identity protection: $60-180/user/year saved
- DLP solution: $36-120/user/year saved
- Power BI Pro: $120/user/year saved
- Total potential savings: $368-732/user/year
- E5 premium cost: $252/user/year
- Net savings: $116-480/user/year vs buying separately
Indirect Value
- Reduced complexity: Single vendor vs managing multiple security tools
- Integration benefits: Native connectivity vs custom API work
- Analyst productivity: Unified Defender XDR console vs tool-switching
- Faster deployment: Built-in vs months of integration work
- Compliance efficiency: Built-in reporting vs manual evidence gathering
Risk Mitigation Value
- Average data breach cost: $4.45 million (IBM 2023)
- E5 comprehensive protection: Significantly reduces breach likelihood
- Regulatory fines avoided: GDPR fines up to 4% of revenue
- Reputation protection: Customer trust and brand value preserved
ROI Example: 500-User Organization
| Item | Annual Cost/Savings |
|---|---|
| E5 Premium Cost (500 users x $252/year) | $126,000 |
| Avoided standalone EDR (500 x $100) | -$50,000 |
| Avoided email security (500 x $60) | -$30,000 |
| Avoided CASB (500 x $60) | -$30,000 |
| Avoided DLP (500 x $48) | -$24,000 |
| Power BI Pro included (500 x $120) | -$60,000 |
| Integration labor saved | -$50,000 |
| Net Cost/(Savings) | ($118,000) savings |
Deployment Best Practices
Phase 1: Planning (2-4 weeks)
- License procurement: Purchase E5 licenses or add-ons
- Assess current state: Inventory existing security tools and gaps
- Define policies: Security, compliance, access control requirements
- Plan migration: Transition from legacy security tools
- Training schedule: User and admin training programs
Phase 2: Core Deployment (4-8 weeks)
- Enable Defender for Endpoint: Deploy agents to all endpoints
- Configure Defender for Office 365: Anti-phishing, Safe Links/Attachments
- Deploy Defender for Identity: Install sensors on domain controllers
- Enable Defender for Cloud Apps: Connect cloud applications
- Configure conditional access: Risk-based authentication policies
Phase 3: Advanced Features (4-8 weeks)
- Enable Purview DLP: Configure data loss prevention policies
- Implement insider risk: Configure insider risk management
- Configure compliance: Retention, eDiscovery, records management
- Enable PIM: Just-in-time admin access
- Integrate Sentinel: Connect to Microsoft Sentinel for SIEM
Phase 4: Optimization (Ongoing)
- Tune detections: Reduce false positives
- Expand coverage: Additional devices and data sources
- User training: Security awareness and phishing simulation
- Regular reviews: Policy effectiveness and threat landscape
- Maturity advancement: Progress toward Zero Trust architecture
Frequently Asked Questions
What is Microsoft 365 E5?
Microsoft 365 E5 is Microsoft's premier enterprise productivity and security suite combining Office 365 apps, Windows 11 Enterprise, and Enterprise Mobility + Security E5 with advanced security features. E5 includes the complete Defender XDR platform (Endpoint, Office 365, Identity, Cloud Apps), Entra ID Premium P2 with identity protection and privileged access management, Microsoft Purview for advanced compliance and data loss prevention, Power BI Pro, advanced eDiscovery, PSTN conferencing, and audio conferencing. Priced at $57/user/month, E5 delivers comprehensive security, compliance, and productivity for enterprises requiring the highest protection levels.
What is the difference between E3 and E5?
Microsoft 365 E3 ($36/user/month) includes basic productivity and security: Office apps, Windows 11 Enterprise, Defender for Endpoint Plan 1, and Entra ID Premium P1. E5 ($57/user/month, +$21) adds advanced security and compliance: Defender for Endpoint Plan 2 (full EDR with threat hunting), Defender for Office 365 Plan 2 (advanced anti-phishing), Defender for Identity (Active Directory protection), Defender for Cloud Apps (CASB), Entra ID Premium P2 (identity protection, PIM), advanced Purview (insider risk, information barriers), Power BI Pro, and PSTN conferencing. E5 is required for comprehensive threat protection and Zero Trust architecture implementation.
Is Microsoft 365 E5 worth it?
Microsoft 365 E5 is worth it for organizations requiring advanced security, compliance, or analytics. E5 costs $21/user/month more than E3 ($252/year), but delivers $368-732/user/year value in standalone security products (EDR, email security, CASB, DLP, identity protection), compliance tools avoiding regulatory fines, reduced breach risk ($4.45M average cost), SOC analyst productivity gains through Defender XDR automation, and Power BI Pro ($120/year value). ROI is strongest for regulated industries (healthcare, finance), organizations with sophisticated threats, enterprises needing Zero Trust, and Microsoft-centric environments. Calculate value based on avoided security tool costs and integration complexity.
What security features are in E5?
Microsoft 365 E5 security features include: Defender for Endpoint Plan 2 (full EDR with threat hunting and automated investigation), Defender for Office 365 Plan 2 (anti-phishing, safe attachments/links, attack simulation training), Defender for Identity (Active Directory protection, lateral movement detection), Defender for Cloud Apps (CASB, shadow IT discovery), Defender XDR (unified incident correlation and coordinated response), Entra ID Premium P2 (identity protection, privileged identity management, conditional access), and Microsoft Purview (advanced DLP, insider risk management, information protection, compliance manager, advanced eDiscovery). These provide comprehensive protection from endpoint to cloud with unified SOC operations.
Conclusion: Maximizing Microsoft 365 E5 Value
Microsoft 365 E5 represents the gold standard for enterprise productivity and security in 2026, delivering comprehensive protection, compliance, and analytics through a unified, natively integrated platform. For organizations using Microsoft 365 and Azure, E5 provides exceptional value by consolidating multiple security products, EDR, email security, CASB, identity protection, DLP, into a single license with seamless integration and unified operations through Defender XDR.
While the $21/user/month premium over E3 may seem significant, the ROI analysis clearly demonstrates that E5 delivers substantially more value than the incremental cost, particularly when accounting for avoided standalone product costs, integration complexity, analyst productivity gains, and reduced breach risk. For regulated industries, organizations with sophisticated threat exposure, or enterprises implementing Zero Trust architectures, E5 is not just recommended, it's essential.
Organizations currently on E3 should evaluate the E5 Security add-on ($12/user/month) as a middle-ground option providing comprehensive Defender XDR protection at a lower total cost than full E5, reserving the additional features for when budget permits.
subrosa specializes in Microsoft 365 E5 deployment, optimization, and managed services including Defender XDR, Microsoft Sentinel integration, Zero Trust implementation, and 24/7 SOC operations leveraging the complete Microsoft Security stack. Our certified experts help organizations maximize their E5 investment through proper configuration, policy tuning, and ongoing security operations. Contact us to discuss your Microsoft 365 E5 strategy and deployment.