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M365 E3 vs E5 Information Protection & Governance license - what do you need to manage records?

Updated: May 24, 2020

Microsoft changed last year their license structure, and it is often difficult to understand what you need of licenses to manage and protect information and records in Microsoft 365 (M365).

E5 Information Protection & Governance

Many organizations have the M365 E3 license which now include the following features for managing and protecting information.


M365 E3 license

  • Apply non-record retention labels manually

  • Apply a single retention policy to the entire organization, specific locations or users

  • Protection for on-premises Exchange and SharePoint content via Rights Management connector

  • Email archiving

  • Import PST

  • Apply sensitivity labels manually in Microsoft 365 Apps (Office 365 ProPlus/Business client apps) using built-in labeling

  • Apply sensitivity labels manually in Microsoft 365 Apps (Office 365 ProPlus/Business client apps) on Windows using AIP plug-in

  • Apply sensitivity labels manually in Office for the Web and Office Mobile

  • Apply sensitivity labels manually for SharePoint sites, Teams, and Office 365 Groups (Preview)

  • Apply sensitivity labels manually to data in 3rd party clouds

  • Enable 3rd party integration into Microsoft Information Protection (MIP) using MIP SDK

  • Analytics Overview (Preview)

  • Basic Office 365 Message Encryption

  • Office 365 DLP for files and email

  • Bring Your Own Key (BYOK) for customer-managed key provisioning life cycle

None of the above features will help with records management in SharePoint Online. You need then the E5 license, or the M365 Information Protection & Governance add-on license. The added costs could be justified to meet compliance requirements, e.g. GDPR, but opportunities for replacing expensive and complex legacy content management systems with M365 will often cover the cost of the E5 license. As an example, the annual cost of a leading content management system for 2,000 users is often more than the annual cost of M365 Information Protection & Governance for 20,000 users.


E5 Information Protection & Governance add-on license

  • Apply a default retention label for SharePoint/Teams/OneDrive for business libraries, folders, and document sets and Office 365 Groups

  • Apply retention policies automatically based on specific conditions (e.g., keywords or sensitive information)

  • Apply retention policies automatically based on Machine Learning (trainable classifiers)

  • Apply retention policies automatically based on an event

  • Retention labels disposition review

  • Records Management (record labels, file plan manager, records versioning) (Preview)

  • Apply sensitivity labels automatically in Microsoft 365 Apps (Office 365 ProPlus/Business client apps), Office for the Web, and Office Mobile based on sensitive information types

  • Apply sensitivity labels automatically to data in Office perpetual and SharePoint Server on-premises using AIP client (incl. AIP scanner)

  • Apply sensitivity labels automatically to files in SPO or to EXO email (Preview)

  • Auto-labeling policy simulation (Preview)

  • Apply sensitivity labels automatically to data in 3rd party clouds

  • Classify data automatically based on Exact Data Match

  • Classify data automatically based on Machine Learning (trainable classifiers) (Preview)

  • Set labels to automatically apply pre-configured S/MIME protection in Outlook

  • Control oversharing of information when using Outlook (warn, justify or block emails)

  • 3rd-party data connectors

  • Content and Activity Explorer (Preview)

  • Advanced Office 365 Message Encryption

  • Communication DLP (Teams chat and channel conversations)

  • Cloud App Security (includes ability to auto-apply sensitivity label based on metadata)

  • Customer Key for Office 365

  • Hold Your Own Key (HYOK) that spans Azure Information Protection and Active Directory (AD) Rights Management for highly regulated scenarios (Preview)


The above features will allow you to automate records management with SharePoint Online and record labels, but also automate information protection and security with sensitivity labels. For more details about the Microsoft 365 compliance features as of April 1, 2020, download this Detailed Microsoft 365 Compliance Licensing Comparison (PDF).


How do you justify the investment in E5 or M365 Information Protection & Governance add-on license? Check out my previous blog post about how to establish a business case for information governance and protection. Feel free to contact us if you want a demonstration of the above features.

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