Wednesday, April 25, 2018
Office 365 P1 (SMB Plan) - Features, Limits, and Capabilites

by Brett

Version 1h – Last updated 3/15/201

Microsoft Office 365 offers five primary plans and a variety of special use plans. Which features are or are not included with each plan can be confusing. This article focuses on the P1 plan for small businesses and professionals and will help you select the right plan.

The P1 plan is a great value for small businesses. Considering there are at least 3 million small businesses with 5 employees or less, Microsoft can expect to gain a ton of users for the P1 plan by this time next year. Training will be available at (not affiliated with Microsoft) for end users and plan administrators.

Microsoft can and does update the services regularly, so while I’ve checked and re-checked the details, the services and capabilities do change.

I am making the assumption in this article that you are already familiar with the services. See the article What is Office 365?

P1 Plan Features

The P1 plan costs $6 per month per user with a minimum of 1 user – an excellent value.

The services are delivered from the same platform and data centers as the E plans and include Exchange Online, SharePoint Online, and Lync Online. Office Pro Plus is available as an optional add-on.

Important features available in both the P1 and E plans include:

  • 25GB mailbox
  • Invitations for 50 external users to SharePoint Online
  • Invitations for 250 users to a Lync Online meeting or webinar with voice and video
  • Public Web Site
  • Virus and Spam scanning
  • Outstanding feature set with Exchange Online capabilities including mail tips, personal archive, distribution lists, conference rooms scheduling, shared calendars, contacts and more.
  • Web access to mail (Outlook Web Apps) and documents (SharePoint Online
  • Sync email to mobile device
  • Document versioning, check in/check out with SharePoint Online
  • Instant Messaging
  • Voice and video between Lync Online users
  • Much more

In fact, the P1 Plan includes hundreds of features, all for less than the cost of a movie ticket.

Additionally, a few P1 Plan features are not included in some E plans:

  • Office Web Apps with read/write privileges available in P1/E3 and E4 (see the Office Web Apps service description). E2 has Read only.
  • Access Web Services: Available in P1, E3 and E4

P1 Plan Limitations

Of course, for the price, limitations are to be expected. What follows is a list of differences between the P1 and E Plans, compiled from multiple sources. There are some surprises here so read carefully.

1. Phone / Ticketed Support Not Included

Support is one of the biggest overhead expenses for service providers. Logically, overhead is reduced when support is not provided, resulting in lower plan costs being passed on to the user. However, Microsoft’s language surrounding limitations can be confusing. What they don’t say is often more important than what they do say. Here is the exact language from the P1 service description:

“Support for Office 365 is provided by a rich library of online resources including online help, articles, community support, and blogs”

What Microsoft doesn’t say here is “phone support is not included.”

What Microsoft is saying is that you can post issues to and staff will help answer your questions.

Bottom line: If you want to be able to call Microsoft support when you have a problem, you must subscribe to an E plan.

2. Capacity Limited to 50 Users

Microsoft covers their bases here by saying that P1 is targeted to businesses of 1-25 users. While a user can double this to 50, not one seat more than 50 is possible.

3. Unable to Upgrade from P1 to E Plan

To be comfortable with this limitation, you must be certain you will not grow beyond 50 users in the foreseeable future, or you must be willing to go through an off boarding and on boarding process to move to an E plan.

4. One SharePoint Site Collection

To understand what this means, it helps to have a basic understanding of SharePoint Online. With SharePoint Online, you can easily create a website that you can interact with . Websites created with SharePointOnline are hosted in a “Site Collection”. When a site collection is created, a top level website is also automatically created. Site Collection administration takes place in this top level website. Once in the top level site, you can add other websites to the site collection.

Each site within a site collection shares attributes inherited from the site collection such as templates that can be applied, permissions, and other settings that flow down from the site collection to the sites.

With an E plan, a user can have multiple site collections. With the P1, plan the user can have only 1.

Having one site collection will probably not create a large impact for most small businesses of 25 users or less. Multiple site collections are useful when unique teams want their own workspace and separate security settings. You can still control security within sites, but there are considerations to manage, such as giving external users access to sites, which can give them access to the entire site collection.

5. Cannot Buy Additional SharePoint Storage

SharePoint Online comes with 10GB of storage overall, plus 500MB for each user. The E plan uses the same formula, but if more SharePoint Online storage is desired, this can be purchased from the Office 365 Portal. The P1 plan does not allow you to buy additional storage. The only way to add space is add users.

6. Directory Synchronization is Not Allowed

Due to the success of the Small Business Server product line and a very active SBS (Small Business Server) partner community, many small businesses have Active Directory. While E Plan subscribers can use the directory synchronization tool to replicate users, contacts, distribution lists, and other objects into Office 365, P1 Plan users cannot. I’ve heard that the SBS teams at Microsoft may be working on some tools to help this along, but as of now, if you want directory synchronization, you must purchase an E plan.

7. Federation (Single Sign On) is Not Supported

Due to the technical expertise and expense to deploy, it makes sense that Single Sign On is not supported on the P1 plan.

Federation is a feature that allows identity to flow between online and on premise systems as if they were one big happy system. In effect, when you log-in to your workstation (using Active Directory), you are logging into Office 365 at the same time. Federation is not simple to configure and requires on-site services deployment as well as a public certificate. When deployed, it’s great to have.

8. Custom Domain Validation Requires Microsoft Name Servers

Domain validation is one the biggest support issues for Microsoft. DNS is technical by nature, so many small businesses lacking in-house IT or IT-on-call can stumble here.

The question facing Microsoft is “How can we make domain validation and configuration as simple as possible for small businesses that don’t have an IT staff?” Not a simple problem. In addition, if you have difficulties during the process, you can’t call support. To be fair, help on the board is pretty good. The boards are stacked with MVPs, Microsoft support staff, other experts and Partners. Alternatively, consider seeking help from a Microsoft Partner or someone who understands DNS.

Microsoft’s solution to simplifying the domain validation and configuration process is to host DNS for your domain. They call this “full re-delegation” in that your domain is delegated to Microsoft DNS servers. This is a “good news, bad news” situation.

The good news is that this plan works great for businesses that do not currently use a custom domain with email or a website.

The bad news is that the DNS delegation feature can unexpectedly impact your existing website and mail flow. You should be aware of the following issues:

Here are three issues of which you should be aware:

Updating Microsoft DNS for Your Existing Website

Today, many small businesses are supported by websites. Remember that the P1 plan comes with a public website provided by SharePoint Online. Microsoft’s assumption is that you will use the SharePoint Online site for your public site. As a result, when you delegate your domain to Microsoft, the DNS entries in your existing provider’s system are not replicated to Microsoft’s DNS system.

If you already have a website and want to insure accessibility throughout the delegation, you must update Microsoft’s DNS entries for your domains immediately after delegation, or use the alternative delegation method described below.

Imagine your business is and you have an existing website that your devoted customers find useful to help locate and exchange information on rare books. In your existing DNS system will be an entry associating and with an IP address. This may look something like the following screenshot (from the DNS provide ENOM® which provides a very good web based management tool for DNS):

Now, look at the screen shot below, which shows the DNS entries Microsoft creates for your domain when it is delegated to Office 365 (P1). Keep in mind that this does not apply to the E plans which have a different process.

Compare these entries to the ones from the Enom site and you can see that there are no entries for your existing website. You must add two new entries:

1. An “A” record indicting WWW for the host name, pointed to your web server’s IP address.

2 A catch all entry “@” for the host name as an A record and point to the web server’s IP address.

In practice, this procedure may work seamlessly. There is often a delay in DNS that causes the user to go to the old DNS server even after delegation has occurred. The old DNS server has the correct website settings. This lag in DNS works to your advantage as it only takes a few minutes to update the Office 365 DNS settings with your website details. When the lag ends and the user starts to hit the Microsoft DNS servers, the updated web server settings are in place, and all is well. Even so, there is a potential for disruption if the delegation occurs quickly and Microsoft’s own DNS systems are not quick to update.

Managing Mail Flow When Delegating

Please note that, in the DNS entry example above for, an MX record was created. This means all mail will start to flow to Office 365 as soon as the delegated domain “kicks in” on the internet. In turn, this means mailboxes must be created and assigned to users on the new domain when the mail flow starts. If users are not created, or if you did not assign the users to the delegated domain each user, mail will bounce.

Microsoft DNS for P1 allows only for add / edit TXT or CNAME records.

If you require other kinds of DNS entries, consider an E plan.

DNS Validation for P1 – Alternate Method

.NO and .DK domains (denmark and norway) cannot be fully delegated to Microsoft DNS servers. I don’t know why. As a result, Microsoft posted this article explaining how to “partially” delegate a domain to P1 without Microsoft hosting the DNS servers.

As it turns out, the process is essentially the same as with the E plans. In short, immediately after validating your domain, end the wizard. Do not delegate the domain. Then you can setup your DNS entries as you would for an E plan.

To find out which entries should be added, simply click on the Troubleshoot domain button. I have conversed with several people inside and outside Microsoft that confirm this does work and that in fact, there is no technical reason why Microsoft must host DNS. Microsoft wants P1 users to fully delegate their domains, but in some cases, such as .NO and .DK domains, this isn’t feasible.

IMPORTANT: While this method definitely works, it is not officially endorsed by Microsoft. Microsoft prefers you fully delegate your domain. When you do partial delegation, keep in mind that changes you make in the Microsoft DNS system will have no effect. In addition, their domain troubleshooter evaluates the Microsoft DNS settings and not your providers, so it may give a different result than what is actually the case.Online

9. SSL Not Available with SharePoint

SSL encrypts the traffic between your computer and the Microsoft data center hosting SharePoint Online. Since SSL is not available with SharePoint Online and the P1 plan, documents you transmit to and from the Microsoft data center are transmitted “in the clear”. This may be an important consideration in your choice of plans. In addition, the unavailability of SSL affects several SharePoint Online features as detailed in

You can work around this by adding your SharePoint site to your trusted zone in IE (or other browser) but this is not recommended for security reasons. The above content states:

It is not recommended to add your SharePoint Online site to the Trusted Sites zone in Internet Explorer to enable these features. It is best practice to add only HTTPS sites to the Trusted Sites zone. Because your Office 365 for professionals and small businesses sites use HTTP, adding them to the Trusted sites zone may result in security risks.

Microsoft has told me they are working on updating the services to provide https capabilites but it is not known when such an update will be availble. 

10. My Sites not available in SharePoint Online

The MySite feature is not available in the P1 plan.

11. Connect to Office feature not available in SharePoint Online

This feature requires My Sites so is not enabled. When it is available, you can click on a button that says Connect to Office and SharePoint resources appear for recent locations in Microsoft Office. In addition, when you create a new document, you have the option of creating the document in SharePoint Online.

12. User accounts set to never expire.

P1 user accounts are set so that passwords never expire. Administrator accounts are set to expire in 90 days. In all  other Office 365 plans, user accounts are set to be changed every 90 days. This can be changed using powershell. 

13. Roles not available in the Office 365 Portal or Exchange Online

Larger organization have the need to delegate and control administrative authority over the services. For example, in the E  plans, you can give a user the ability to change passwords (for non-admin accounts) without making also making the services administrator. This was not possible in BPOS. Similarly, Exchange Online includes Role Based Access Control with a rich set of abilities to define and assign roles. Working under the assumption that a business from 1-25 does not need to have this kind of granular control, and the desire to simplify administration, the P1 plan does not include these capabilities.

15. Organization wide rules are not available (FOPE)

In the E plans, you can create organization wide rules that apply to everyone. Sometimes called "transport rules" these rules are useful in larger businesses for purposes such as applying a disclaimer or specific message to the end of all mail coming out of Exchange Online. This features is not  present in the P1 plan as the FOPE is not accessible.

16. Blackberry Enterprise Services not available

Blackberry owners should take note. BES is not availble for P1plan owners. You can use BIS, (Blackberry Internet Services), but you're calendar and contacts do not synch with your phone unless you are synce with your computer. This is not a limiation created by Microsoft, but by RIM.

17. Dynamics CRM connector for SharePoint Online not available


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  • Office 365 P1 (SMB Plan) - Features, Limits, and Capabilites
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