What's actually inside Microsoft 365 E3
Microsoft 365 E3 is the floor for most Australian midmarket enterprise tenants. It bundles three things in a single per-user licence: Office 365 E3 (Word, Excel, PowerPoint, Outlook, Teams, OneDrive, SharePoint, Exchange Online), Windows 11 Enterprise (E3) and Enterprise Mobility + Security E3. The EM+S component is what most buyers underuse — it includes Microsoft Intune for device management, Microsoft Entra ID P1 for Conditional Access, and a Purview baseline for sensitivity labels and basic DLP.
What's not in E3 — the gaps that matter
E3 does not include Microsoft 365 Copilot (separate AUD ~$45/user/month add-on), Defender for Cloud Apps, Defender for Identity, the full Purview suite (Insider Risk, Communication Compliance, Records Management), Entra ID Governance, Privileged Identity Management for Entra roles, or Microsoft Sentinel. If you need any of those individually, the add-on price often makes E5 cheaper than E3 + selective add-ons.
When E3 is the right answer
E3 is right when you have a separate identity governance product, a separate SIEM, and you're not pursuing Essential Eight ML2 inside the Microsoft stack. It's also the most common pick for Australian businesses that already invested in third-party email security or third-party MDM and aren't ready to consolidate yet. For everyone else — and especially for Essential Eight ML2 targets — E5 or E3 + the relevant add-ons is the sensible choice.
Australian buying notes
Microsoft publishes USD list prices and Australian resellers convert to AUD with a margin. Cloud Solution Provider partners can sometimes beat list, particularly on annual commitments. Always check whether you're being quoted Microsoft 365 E3 (the full bundle) or just Office 365 E3 (no EM+S) — the difference is material and frequently confused on quotes.