Here’s a simple high level guide to navigating Microsoft licensing from a security perspective.
This guide won’t go into the details of ‘why’ you need these licenses, and it won’t discuss the operational costs of implementing these security solutions.
Your main reference for Microsoft enterprise licensing is here!
(don’t worry if you’re not in the US, it will ask you to switch)
On the left hand side of this page is a pdf you should download and really get to know:

Budgeting for security in any organization can be a challenge. Let’s assume you’re taking the leap with Microsoft but you want to work it into your budget.
Consider E5 licenses for a subset of users and E3 for the rest.
This will allow you to optimize the use of the security related features for your critical infrastructure and then grow out to the larger cost of protecting everything.
P1 vs P2
Next look at the P1 vs P2 features. If you have that E5 license then you’re mostly set with the P2 features since they’re included with E5.
If you have E3 then consider adding all of the P2 features until it makes more sense cost-wise to switch to E5. The order in which you add the P2 features will depend on your security priorities.
Don’t shrug off the importance of many of these P2 features. Here are some links to look at for more information:
Additional cost considerations:
- DDoS protection
- WAF
- SIEM – Microsoft Sentinel
- EASM – External Attack Surface Management
See the link for the Pricing Calculator below to dig into the cost of these additional services.
References:
M365 Licensing (includes everything related to E3, E5, P1, P2, etc.)
Defender for Cloud Pricing
Pricing Calculator – select the ‘Security’ side menu and go from there