Choosing the Right Microsoft Licenses for CMMC 2.0 Readiness
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Choosing the Right Microsoft Licenses for CMMC 2.0 Readiness

A practical guide for teams who need clarity, not more complexity


Man and woman decision makers selecting licenses on a control board.

If you work with the U.S. Department of Defense, either directly or as a subcontractor, CMMC 2.0 (Cybersecurity Maturity Model Certification) should already be in your planning conversations.


And if your organization uses Microsoft 365, you may be asking a very practical question:

“Are we already paying for the tools we need for CMMC readiness, or are we missing something important?”

This article walks through the essentials clearly and without assumptions.


1. Quick Overview: What is CMMC 2.0?

CMMC 2.0 is the Department of Defense cybersecurity framework designed to protect controlled defense information.

Level

Purpose

Applies to

Level 1

Basic cyber hygiene

Organizations handling only Federal Contract Information (FCI)

Level 2

Based on NIST SP 800 171

Organizations handling Controlled Unclassified Information (CUI)

Level 3

Advanced cybersecurity

High sensitivity or special access contract environments

Most small and mid sized contractors fall into Level 2.


Keep in mind that CMMC is built around people, process, and technology.


Microsoft technology supports the technical component, but it does not provide compliance certification.


2. Enforcement Timeline

The rollout is phased and not applied all at once.


  • Expected initial enforcement for new contracts begins around November 2025, depending on contract type and level.

  • Broader adoption is expected to increase through late 2026.

  • Full enforcement across the Defense Industrial Base is anticipated by 2028.


If you handle CUI and plan to compete for DoD work after 2025, now is the right time to begin readiness planning.


3. Why Microsoft Licensing Matters

Two organizations may both be using Microsoft 365. One may have:

  • MFA fully enforced

  • Proper device compliance controls active

  • Threat detection enabled

  • Monitoring and response capabilities integrated


The other may not have any of these features enabled, even if they are paying for them.


Licensing controls access to tools. Compliance depends on configuration and implementation.


4. Microsoft Licensing Tiers for CMMC

Licensing options and available features change frequently. Always confirm with your Microsoft partner before making final licensing selections.

Tier

Best for

Considerations

Microsoft 365 Business Premium

Under 300 users

Strong foundational security features

Microsoft 365 E3 with security add ons

Larger or more complex environments

Requires thoughtful selection and management

Microsoft 365 E5 or E5 Security

Higher risk or regulated environments

Includes most security capabilities by default

Tier 1: Microsoft 365 Business Premium

Best for organizations with fewer than 300 users.

Includes:

  • Microsoft Entra ID with MFA and Conditional Access

  • Microsoft Intune for device management

  • Microsoft Defender for Business endpoint protection

  • Centralized control of BitLocker device encryption

Missing items include advanced reporting, deeper analytics, and SIEM integration.

This option is strong for smaller contractors if configuration is managed carefully.


Tier 2: Microsoft 365 E3 with security add ons

Includes enterprise functionality with no user limit, but requires additional licensing for advanced security. These add ons often include:

  • Microsoft Defender for Endpoint Plan 2

  • Microsoft Defender for Office 365 Plan 2

  • Microsoft Defender for Identity

  • Defender for Cloud Apps

  • Microsoft Purview advanced features

A common issue is that organizations purchase E3 licenses but do not enable the related security tools.


Tier 3: Microsoft 365 E5 or E5 Security

Includes most advanced security capabilities and automation. Additional highlights:

  • Full Defender suite

  • Integrated Microsoft Sentinel connection for SIEM and incident monitoring

  • Expanded Purview capabilities

  • Real time threat intelligence and automation

Best for organizations with consistent DoD work, more complex risk environments, or a goal of centralizing security operations.


Special Consideration: Microsoft 365 GCC High

Organizations handling more sensitive CUI should evaluate whether Microsoft 365 GCC High is appropriate. This cloud environment offers:

  • U.S. data residency and controlled access

  • Additional compliance alignment for DoD requirements

  • Restricted administrative access

Not every contractor needs GCC High, but many Level 2 organizations use it to increase audit confidence.


This decision should be evaluated with a Microsoft partner that understands defense sector conditions.


5. What Licensing Does Not Solve

Even with optimal licensing, compliance still requires:

  • Written cybersecurity policies

  • Training and awareness

  • Incident response procedures

  • Clear access control processes

  • Planning and coordination with a C3PAO (Certified Third Party Assessor Organization)

Licensing provides tools. Policies and consistent practice provide evidence.


6. How Kosh Supports Compliance Readiness

When working with clients preparing for CMMC using Microsoft technology, we typically:

  1. Review current licenses (Business Premium, E3, E5, or GCC High)

  2. Map those tools to relevant CMMC technical requirements

  3. Enable features that are not being used

  4. Identify upgrade needs only if necessary

  5. Support interaction with compliance experts or C3PAOs


Final Thought

The most costly licensing mistake is not overspending. It is failing to use the tools that you already own.


Before upgrading to new Microsoft SKUs, verify that existing licenses are being fully implemented.


Recommended Next Step

Schedule a Microsoft and CMMC readiness assessment with Kosh Solutions.

  • Inventory your Microsoft licensing

  • Compare to technical requirements

  • Activate unused security capabilities

  • Identify necessary upgrades only if needed

  • Plan your technology roadmap aligned with the phased CMMC timeline


Call: 505-796-5988

Disclaimer

The information contained in this communication is intended for limited use for informational purposes only. It is not considered professional advice, and instead, is general information that may or may not apply to specific situations. Each case is unique and should be evaluated on its own by a professional qualified to provide advice specifically intended to protect your individual situation. Kosh is not liable for improper use of this information.


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