Office 365 E1 vs E3 - The SharePoint Online Discussion

Office 365 E1 vs E3 - The SharePoint Online Discussion

Sharepoint Online

So many versions of SharePoint!  If you have seen the licensing chart lately, it’s starting to become a game of Where’s Waldo when it comes to figuring out what features are available in which version of SharePoint.  Are you On-Premises?  Online?  K1, E1, E3, E4?  Bingo anyone?!  The most common question when reviewing Office 365 licensing is whether or not to make the jump from E1 to E3.  But with all 300 of the features detailed in a complicated spreadsheet, how can you make sense of all the noise?  How do you know what your organization needs?  

SharePoint Online (SPO) Licensing Basics for O365 Enterprise Plans

Microsoft labels its Office 365 Enterprise level licensing as E1, E3, and E4.  The different levels designate the Office, Exchange, Lync, and SharePoint features that are available to your organization; where E1 is more basic and E4 is fully featured.  For many companies, the decision between E1, E3 and E4 comes easy based on needs around Exchange and Lync.  However, with growing flexibility around assigning licenses that can be ”mixed and matched” to individuals within an organization, there has been additional conversations popping up about who needs what.

In SharePoint terms, E3 and E4 are pretty much the same.  This leaves us to describe the differences between E1 and E3. For those already familiar with SharePoint, the differences can be summed up by comparing E1 to SharePoint Standard and E3 to SharePoint Enterprise on-premises.  However, while one could say the comparisons are similar, the functionality for SharePoint on-premises is not identical to SharePoint Online and so you cannot make the assumption that all functionality can be matched one for one.

When it comes it understanding why you would need to upgrade from E1 to E3, it’s easiest to look at the key features.  


InfoPath Forms Services

InfoPath is a user friendly application for creating electronic forms.  

What is InfoPath?

InfoPath Forms Services provides a Web browser experience for filling out InfoPath forms. When deployed to a server running InfoPath Forms Services, forms based on browser-compatible InfoPath form templates (.xsn) can be opened in a Web browser from computers that do not have InfoPath 2013 installed, but they will open in InfoPath 2013 when it is installed.




  • Easy for Power Users to create forms
  • The InfoPath Designer client deploys easily as part of the Office package (Word, Excel, etc)
  • Forms Services allows users to take advantage of electronic forms without needing the InfoPath Filler client


  • InfoPath is not mobile friendly
  • InfoPath has not been changed or improved since it was released as part of the Office 2013 suite
  • InfoPath is being deprecated, so there won’t be any new features for this product going forward eitherThere is not a named replacement or a guarantee that there will be an upgrade path to another form solution
    • The InfoPath 2013 client will be supported through April 2023.
    • InfoPath Forms Services for SharePoint Server 2013 will be supported until April 2023.
    • InfoPath Forms Services in Office 365 will be supported until further notice.


  • Stay the course until an alternative path is provided by Microsoft
  • Develop forms in HTML
  • Purchase a 3rd party tool like K2
  • Find free tools like Forms7 on CodePlex*

*Some programming knowledge is still needed


SharePoint Online 1

Microsoft is still sticking with the recommendation that organizations still use InfoPath until its replacement has been announced.  So, if forms in the browser are important to you, you don’t have any developers on staff and you don’t have the budget for a third party solution, Forms Services may be a reason to upgrade your licensing from E1 to E3. 

Business Connectivity Services (BCS)

What is BCS?

With Business Connectivity Services, you can use SharePoint 2013 and Office 2013 clients as interfaces into data that doesn’t live in SharePoint 2013 itself. For example:

  • This external data may be in a database and it is accessed by using the out-of-the-box Business Connectivity Services connector for that database.
  • Connect to data that is available through a web service

In SharePoint Online, you can create Business Connectivity Services (BCS) connections to data sources, such as SQL Azure databases or Windows Communication Foundation (WCF) web services that are outside the SharePoint site. Once you’ve created these connections, you can manage or edit BCS information on the SharePoint admin center site. You can log on to the SharePoint admin center site directly, or log on to the Office 365 Preview admin center and then move to the SharePoint admin center.

SharePoint Online uses BCS together with Secure Store Services to access and retrieve data such as BDC Models from external data systems. To learn more about BCS, see SharePoint Online planning guide for Office 365 and here for detailed BCS information.

SharePoint Online 2


If you are considering the use of business connectivity services as part of your SharePoint Online implementation, there are many factors to consider.  At present, if connections into legacy systems is a high priority for your organization, it will still be easier to stay on-premises or utilize a hybrid environment.  While it is certainly possible to use business connectivity services to load on-premises data into your SharePoint Online environment, there are many factors to consider that will require advanced skillsets to support.  This includes but is not limited to someone who controls your firewall, support for ADFS and claims authentication, senior developers comfortable with building web services that may not be provided for your legacy systems, and knowledge of building SharePoint apps using the relatively new app model.  If you are up for a challenge, upgrading E1 to E3 for business connectivity services may be right for you!


Information Rights Management (IRM)

What is IRM?

The capability of information rights management for SharePoint Online is symmetric to the ability to assign a Windows Right Management Server (RMS Server) to an on premises SharePoint installation.

It uses permissions and authorization to help prevent sensitive information from being printed, forwarded, or copied by unauthorized people. After permission for a document or message is restricted by using this technology, the usage restrictions travel with the document or email message as part of the contents of the file.

Azure Rights Management (RMS) is not included with your E3 subscription, but can be purchased as a separate add-in, in order to enable supported IRM features.

SharePoint Online 3

By default, SharePoint Online data is encrypted while being stored and while in motion, without needing to add rights management. 

From the Microsoft support blogs:
“When people download files in an IRM-enabled list or library, the files are encrypted so that only authorized people can view them. Each rights-managed file also contains an issuance license that imposes restrictions on the people who view the file. Typical restrictions include making a file read-only, disabling the copying of text, preventing people from saving a local copy, and preventing people from printing the file.”

IRM will NOT prevent screen capture from third party tools. 

If rights management is a priority to your organization, you will need to upgrade your subscription to E3.

Business Intelligence

You can use a site, such as a BI Center site in SharePoint Online to store, share, and manage basic BI content, such as Excel workbooks and dashboards that were created by using Web Part Pages.

Services included with the business intelligence functionality in SharePoint Online are listed below.  Each has been hyperlinked to more detail on each of these business intelligence services.  It’s important to note that functionality like Power View is still created and edited in the Excel 2013 client.  Similarly, SharePoint Online only provides basic browser interactivity for PowerPivot workbooks up to 10 MB in size. Gallery, Scheduled Data Refresh, Management Dashboard, BISM link files, and other BI features are not available.

It does NOT include Power BI.  

SharePoint Online 4


From a business intelligence perspective, that SharePoint Online cannot host a true replacement for on-premises functionality.  The business intelligence benefits in SharePoint Online are mostly related to the sharing and collaboration of data created elsewhere in your corporate environment. 

In Summary

When making a decision about upgrading from E1 to E3, there are many factors to consider and they are not all highlighted in this article.  For the majority of the organizations we have worked with, the items we have called out in detail have largely been the deciding factors when making a decision.  If you are considering electronic forms in the browser, rights management, connections into legacy systems, or business intelligence, this document is the beginning of understanding which route is best for your organization.

The best news, is that your organization can upgrade from E1 to E3 at any time and these licenses can be specific to your users.  With this mix and match scenario, you have the ability to target the advanced functionality available in SharePoint Online and keep things basic for everyone else. 

If you would like to see the full list of features, you can click here:

If you have any questions, please contact us and we will be happy to discuss any of this in more detail!!

Microsoft Office Online Sees Increased Accessibility
OneDrive for Business Now Available on Mac and iOS Devices

Related Posts