Exchange Online Plan 1 vs Plan 2: Compare Price & Features
For organizations that are in the market for a standalone email service, Exchange Online is the first choice. However, the problem most IT administrators face is which one to choose between Exchange Online Plan 1 vs Plan 2?
This is not an easy decision to make. Even experienced administrators struggle to find the right balance between user requirements and budget constraints.
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Additionally, if you operate an on-premise exchange, the window for selecting and moving your infrastructure is shrinking. This is because both currently operational Exchange Server 2016 and 2019 are retiring in October of 2025.
We understand how important it is to choose the right plan; that’s why we have curated this definitive guide. Here you will find what remains the same between both editions of Exchange Online, and also see the feature-wise difference between the two plans.
So take a look at the table below, where we compare both choices.
Exchange Online Plan 1 vs. Plan 2: Quick Glance
| Feature | Exchange Online Plan 1 | Exchange Online Plan 2 |
| Best For | Essential Cloud Email | Advanced Compliance & Archiving |
| Price | $4.00 /user/month | $8.00 /user/month |
| Mailbox Storage | 50 GB | 100 GB |
| Archive Storage | 50 GB | 1.5 TB (auto-expanding) |
| Data Loss Prevention (DLP) | ❌ No | ✅ Yes |
| Litigation Hold | ❌ No | ✅ Yes |
| Core Email Features
(Web Access, Mobile, Security) |
✅ Included | ✅ Included |
Before we cover the differences in detail, let’s see what features you will get regardless of the plan you choose.
Overview of What’s Similar in Both Exchange Online Plans
Exchange Online is the name Microsoft has given to its cloud-based email service. Both Plan 1 and Plan 2 provide organizations with the facility to use email. On top of basic message transfer, users can also manage calendar events and set up contact lists through these plans.
Exchange Online service is available as part of many (if not all) Microsoft 365/Office 365 Business and Enterprise plans. Moreover, organizations also have the option to procure a stand-alone version of the Exchange Online service that covers all email communication requirements.
Both plans support large message size (up to 150 MB), native integration with the Outlook Client, mobile access, and generic email safety mechanisms like spam and malware protection.
Both plans can expand beyond their original mailbox size to accommodate more mail. For this to happen admin must enable auto archiving. Unlike M365 business plans, you don’t get a free trial option for Exchange Online plans, which is why the price assessment becomes a top priority. So let’s study it.
Exchange Online Plan 1 vs. Plan 2 Price Differences Explained
The difference in cost that an organization has to bear if it chooses one plan over the other is quite a lot. This is because Plan 2 is two times more expensive than Plan 1. You only have to pay 4$/per user/per month on Plan 1 compared to 8$/per user/per month on Plan 2.
So it is important to ask what exactly you get in the single license of Plan 2 that makes it worth the price of two individual Plan 1 licenses?
Storage is one major point of difference; you can keep a lot more messages with a Plan 2 type license compared to a Plan 1. However, more storage is not the only thing you get by paying double. Plan 2 Exchange Online license also has state-of-the-art DLP(data loss prevention), plus admins can also set up litigation hold when needed. Both these features are absent in the Plan 1 type license.
So in scenarios where compliance matters more than the cost, Plan 2 is the better choice. On the other hand, organizations that have thousands of users keeping the more expensive plan for everyone might not be the best idea. The costs can quickly add up, and if you don’t use most features, it’s no use paying extra.
Moreover, Microsoft does not restrict the type of license you are allowed to procure. That’s why admins must do a user role assessment and understand how many of each license type will be required, and buy accordingly. Here, we mentioned that storage varies between the two plans. Let us see how much variation there is actually.
See How Much Storage You Get in Plan 2 Compared to Plan 1
When we compare Exchange Online Plan 1 vs Plan 2 in terms of storage, the gap is quite large. The difference becomes apparent with the regular mailbox itself. For Plan 1, it is capped at 50 GB, but in Plan 2, you get double, i.e., 100 GB of storage. Both plans have the Auto Archive feature
Plan 1 mailboxes stop expanding after allowing 50 GB more space. So the maximum storage cannot exceed 100GB. However, if the same user has a Plan 2 type Exchange Online license, their Online Archive can expand by 100 GB, fifteen times before becoming full. Adding up to a total of 1600 GB or 1.6TB of total mail storage capacity.
If we now calculate the per GB mail storage cost, Plan 1 becomes more expensive (Although it only happens in niche situations when the archive facility is used fully).
Also, you can get the same 1.5 TB storage with the Exchange Online plan 1 itself by purchasing the Archiving Add-on (It is available through resellers). Seeing the storage and price differences is not enough to lock in a particular plan. That’s why we also cover all other major and minor feature differences.
Key Differences in Features Between the Two Exchange Online Plans
| Feature | Exchange Online Plan 1 | Exchange Online Plan 2 |
| Data Loss Prevention (DLP) | Does not include this feature. | Includes built-in DLP to automatically scan and protect sensitive data from leaving your organization. |
| Legal & Compliance Tools | Provides basic retention policies for simple email cleanup. | Adds essential Litigation Hold to preserve all mailbox data, which is critical for legal discovery. |
| Cloud Voicemail | N/A. Plan 1 is a pure email and calendar service. | Provides access to hosted voicemail with a professional UI and features like an auto-attendant for call routing. |
When to Choose Exchange Online Plan 1 vs Plan 2
Here are some mock situations to help you figure out which plan to choose and when:
Consider a startup. There, a budget-conscious administrator wants to set up a cost-effective email solution. One that allows its small team( < 50 people) of mostly remote workers to communicate over email. In such a scenario, the Exchange Online Plan 1 fits in perfectly. It covers all the basic email requirements at a low price.
Also Read: How to Fix Your Mailbox has been Temporarily Moved on Microsoft Exchange Server Error
Another scenario where a large MNC that operates under multiple jurisdictions needs a solution that can tackle the different regulatory agencies and compliance requirements. It does not mind paying extra for a service if it means the users get a large, always accessible storage right in their account. Exchange Plan 2 with its DLP and Litigation hold facility is the way to go.
It’s not that you can only choose one plan or the other. Users inside the same organization can have different types of Exchange Online plans. This is quite a common situation for organizations that have internal legal teams or operate within highly regulated industries.
Move to Exchange Online Professionally
The answer is simple: use SysTools Exchange to Office Migration Tool and safely move your on-premise Exchange 2000,2003,2007,2010,2013,2016 to Office 365‘s Exchange Online Plan 1 or Plan 2.
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Conclusion
Ultimately, the choice between Exchange Online Plan 1 vs Plan 2 is which plan matches your requirements more closely.
Plan 1 is suitable if you are new to Exchange Online and want to get used to the setup before committing fully to the M365 cloud.
Plan 2 is useful if you operate in a highly scrutinized industry that has to comply with regulations like HIPAA, etc. Plus, it is also useful for managing legal hold or dealing with sensitive data due to the presence of DLP.
You might want to find out what your Exchange Server version is to plan out the transfer more effectively.
Frequently Asked Questions
Q. From where do I purchase Exchange Online plans?
Visit the official Microsoft site or contact your Microsoft Cloud solution provider.
Q. Can I switch between the Exchange Online plan 1 and Plan 2?
Yes, upgrading from Plan 1 to Plan 2 is super simple. However, when you downgrade the plan, remember to back up any extra storage you are using, as you will lose access to it.
Q. Which is a better deal, Exchange Plan 1 with Auto Archive Add-on or Exchange Online Plan 2?
Depends, if you just want extra storage, then P1 with the add-on will be cheaper, but if you also want DLP and Litigation hold, there is no other option but to acquire Exchange Online P2.