Microsoft 365 licensing is complex enough in the commercial cloud. But in GCC High, it becomes even more critical to understand how features differ—especially when your organization is subject to DFARS, ITAR, or FedRAMP High requirements.
In this guide, we break down the key differences between Microsoft 365 E3 and E5, explore add-ons to bridge the security and compliance gap, and provide exclusive recommendations for planning a secure and cost-effective licensing model in GCC High.
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Table of Contents
- 🔍 Microsoft 365 E3 vs E5 Feature Comparison (Commercial)
- 🔒 Security & Compliance Add-ons to Microsoft 365 E3 (Commercial or GCC High)
- 🔐 What is Included in Microsoft 365 E5 Security?
- 📜 What is Included in Microsoft 365 E5 Compliance?
- Microsoft 365 E3 & E5 in GCC High: What’s Different?
- ✅ Exclusive Recommendations for GCC High Licensing Strategy
- 📚 Resources
- 🔚 Final Thoughts
🔍 Microsoft 365 E3 vs E5 Feature Comparison (Commercial)
Let’s first take a quick peak at what’s available in the commercial tenants for Microsoft 365.
| Category | Microsoft 365 E3 | Microsoft 365 E5 |
|---|---|---|
| Office Apps | ✅ | ✅ |
| Exchange Online (100GB) | ✅ | ✅ |
| Teams & SharePoint | ✅ | ✅ |
| Intune & Endpoint Mgmt | ✅ | ✅ |
| Defender for Office 365 P2 | ❌ | ✅ |
| Defender for Endpoint P2 | ❌ | ✅ |
| Defender for Identity | ❌ | ✅ |
| Defender for Cloud Apps | ❌ | ✅ |
| Insider Risk Management | ❌ | ✅ |
| Advanced eDiscovery | ❌ | ✅ |
| Customer Lockbox | ❌ | ✅ |
| Entra ID P2 (Azure AD P2) | ❌ | ✅ |
| Power BI Pro | ❌ | ✅ |
| Phone System & Audio Conf | ❌ | ✅ |
💡 Note: Microsoft 365 E3 is excellent for productivity. Microsoft 365 E5 expands into enterprise-grade security, compliance, analytics, and voice capabilities.
🔒 Security & Compliance Add-ons to Microsoft 365 E3 (Commercial or GCC High)
The following table is a collection of add-ons that can be applied along with an existing Microsoft 365 E3 license.
| Add-On License | Purpose |
|---|---|
| Microsoft Defender for Office 365 Plan 2 | Advanced phishing protection, attack simulation, automation |
| Microsoft Defender for Endpoint Plan 2 | Endpoint detection & response (EDR), threat analytics |
| Microsoft Defender for Identity | Detect identity-based threats from Active Directory |
| Microsoft Defender for Cloud Apps | Cloud visibility & control over Shadow IT |
| Microsoft 365 E5 Security | Bundle: Defender for Office, Endpoint, Identity, Cloud Apps |
| Microsoft 365 E5 Compliance | Insider Risk, Advanced Audit, eDiscovery |
| Entra ID P2 (Azure AD Premium P2) | Identity governance, conditional access, PIM |
| Azure Information Protection P2 | Auto-labeling, sensitive content protection |
| Audio Conferencing + Phone System | Voice calling, PSTN dial-in capabilities |
🔐 What is Included in Microsoft 365 E5 Security?
Microsoft 365 E5 Security is a specialized license designed for organizations that want the advanced security and identity protection features of Microsoft 365 E5—without purchasing the full E5 suite (which also includes analytics, voice, and compliance features).
| Category | Service | Included in E5 Security? | Purpose |
|---|---|---|---|
| Identity & Access | Microsoft Entra ID P2 (formerly Azure AD P2) | ✅ | Privileged Identity Management, Conditional Access, Identity Protection |
| Threat Protection | Microsoft Defender for Endpoint Plan 2 | ✅ | Advanced threat detection and response for endpoints |
| Microsoft Defender for Office 365 Plan 2 | ✅ | Phishing protection, Safe Links/Attachments, Attack simulation | |
| Microsoft Defender for Identity | ✅ | Protects on-prem AD against identity attacks | |
| Microsoft Defender for Cloud Apps (MCAS) | ✅ | Shadow IT detection, SaaS app control | |
| Security Management | Microsoft 365 Security & Compliance Center | ✅ | Centralized security insights and configuration |
| Microsoft Secure Score | ✅ | Security posture measurement and improvement suggestions |
📜 What is Included in Microsoft 365 E5 Compliance?
Microsoft 365 E5 Compliance is a specialized license designed for organizations that need the advanced compliance, information protection, insider risk, and data governance features of Microsoft 365 E5—without paying for the full E5 suite (which also includes security, voice, and analytics features).
It enables data loss prevention, records management, insider risk policies, and advanced auditing, supporting regulatory and frameworks like CMMC, NIST 800-171, HIPAA, and GDPR.
🔍 Features Included in Microsoft 365 E5 Compliance
| Category | Service | Included in E5 Compliance? | Purpose |
|---|---|---|---|
| Information Protection | Microsoft Purview Information Protection (AIP P2) | ✅ | Auto-classification, labeling, encryption, and protection of sensitive data |
| Microsoft Purview Data Loss Prevention (DLP) | ✅ | Prevent sensitive data from leaking via email, Teams, SharePoint, etc. | |
| Insider Risk Management | Microsoft Purview Insider Risk Management | ✅ | Monitor and mitigate potential insider threats |
| Microsoft Purview Communication Compliance | ✅ | Monitor communications for policy violations (e.g., harassment, data leaks) | |
| eDiscovery & Auditing | Microsoft Purview Advanced eDiscovery | ✅ | Collect, preserve, and analyze content for legal/compliance needs |
| Microsoft Purview Audit (Premium) | ✅ | Provides forensic-level logging for investigations (1-year retention) | |
| Data Lifecycle | Microsoft Purview Records Management | ✅ | Automate retention and disposition of records |
| Microsoft Purview Information Barriers | ✅ | Enforce ethical walls to prevent conflict of interest or policy violations | |
| Compliance Management | Microsoft Compliance Manager with Premium Assessments | ✅ | Track compliance against frameworks (CMMC, NIST, ISO 27001, etc.) |
| Customer Key for Microsoft 365 | ✅ | Add your own encryption keys for maximum data sovereignty |
🏛️ Compliance & CMMC Guidance
For organizations pursuing CMMC 2.0 Level 2 or Level 3, or operating in regulated sectors (DoD, healthcare, finance, etc.), the following features are critical:
| CMMC/NIST Requirement | Mapped E5 Compliance Feature |
|---|---|
| Controlled Unclassified Information (CUI) | Information Protection, DLP, Records Management |
| Audit and Accountability (AU) | Advanced Audit (1-year retention) |
| Incident Response & Monitoring | Insider Risk Management, Communication Compliance |
| Configuration Management & Data Governance | Compliance Manager, Records Management |
| Encryption & Key Control | Customer Key, AIP (Sensitivity Labels) |
| Data Residency & Sovereignty | Customer Key, DLP, Microsoft Purview |
Microsoft 365 E3 & E5 in GCC High: What’s Different?
GCC High is designed for U.S. government agencies and defense contractors requiring DoD SRG Level 4/5 or FedRAMP High compliance. While Microsoft 365 E3 and E5 exist in GCC High, there are feature gaps and restrictions compared to the commercial cloud.
📊 Feature Parity Table – Microsoft 365 E5: Commercial vs GCC High
| Feature/Service | Commercial E5 | GCC High E5 | Notes |
|---|---|---|---|
| Teams Live Events | ✅ | ❌ | Not supported |
| Teams Breakout Rooms | ✅ | ⚠️ Partial | Limited features |
| Teams App Store | ✅ | ❌ | No 3rd-party apps or bots |
| Phone System | ✅ | ⚠️ Direct Routing only | No Microsoft calling plans |
| Audio Conferencing | ✅ | ✅ | PSTN dial-in limited |
| Defender for Endpoint | ✅ | ✅ | Must be deployed in Azure Gov |
| Defender for Office 365 | ✅ | ✅ | Available |
| Defender for Cloud Apps | ✅ | ⚠️ Partial | Limited 3rd-party connectors |
| Defender for Identity | ✅ | ⚠️ Partial | Works with Azure Gov Entra |
| Purview Compliance Suite | ✅ | ✅ | Full availability |
| Insider Risk & Audit | ✅ | ✅ | Fully supported |
| Power BI Pro | ✅ | ⚠️ Limited | Service available, feature restrictions |
| Viva Suite / Copilot | ✅ | ❌ | Not available in GCC High |
| Microsoft Graph API | ✅ | ⚠️ Limited | Restricted endpoints |
| 3rd-Party Integrations | ✅ | ❌ | Not permitted |
| Microsoft 365 Lighthouse | ✅ | ❌ | Not supported in GCC High |
✅ Exclusive Recommendations for GCC High Licensing Strategy
Most government contractors face this challenge:
“I want E5-level security, but not the E5 price tag.”
Here’s what you can do:
🎯 Recommended Path: E3 + E5 Security Add-on:
- Start with Microsoft 365 E3 (GCC High)
- Add Microsoft 365 E5 Security (GCC High SKU)
This gives you:
- Defender for Office 365 P2
- Defender for Endpoint P2
- Defender for Cloud Apps
- Defender for Identity
- Entra ID P2 (Azure AD Premium P2)
➡️ You now have 90% of E5’s security capabilities without buying the full suite.
💡 Optional: Add E5 Compliance (if required) If you’re managing legal holds, audits, or insider threats:
- Add Microsoft 365 E5 Compliance (GCC High)
📚 Resources
🔚 Final Thoughts
Navigating Microsoft 365 licensing in GCC High isn’t just about picking a plan—it’s about aligning your security and compliance objectives with a rapidly evolving cloud ecosystem.
By combining Microsoft E3 with the right security add-ons, most organizations can achieve a cost-effective, FedRAMP-compliant, and scalable solution that protects sensitive government data.
Need help mapping out your licensing roadmap?
Contact us to get expert guidance for your Microsoft 365 GCC High deployment.