4 Easy Steps to Downgrade from Microsoft 365 Business Standard to Basic

Currently, it is the most-used practice by IT leaders and organizations. The reason is simple: it reduces operational costs and cuts IT overhead instantly. Especially after the recent Microsoft 365 price hike.

So, if you’re an IT administrator or business owner looking forward to saving thousands of dollars annually without disrupting the workflow, use this enterprise-grade guide. It will help you in downgrading Microsoft 365 licenses. And, introduce you to the critical pre-migration data backup phase that most blogs skip.

Benefits of Downgrading From Standard to Basic License

Switching from Business Standard to Basic license can literally save thousands of dollars and make systems more workable for employees. Including reducing administrative overhead. But how, you may ask!

The trick lies in understanding the Microsoft 365 subscription plans. See, both the plans offer the following features:

• 50 GB of Exchange Mailbox
• 1 TB of OneDrive Storage
• And an option to create custom domain emails.

But the key difference that makes downgrading from Standard to Basic financially sensible is application access.

• The Microsoft 365 Business Standard License provides a fully installable desktop version of core productivity apps (Word, Excel, PowerPoint, and Outlook).
• Whereas Microsoft 365 Business Basic plan allows users to use only the web and mobile versions of these apps.

So, if your organization’s workforce has shifted to cloud-only workflows or can be moved to the cloud, understanding how to downgrade Microsoft 365 business subscription licenses can save $6 to $8 per user every month.

The Hidden benefit: 38% of IT leaders have claimed that they have observed significant improvement in usability when they downgraded Microsoft 365 Business subscription. Because it relaxed compliance rules and made systems easier to navigate.

And since Microsoft 365 prices are going to increase from July 2026, switching from Microsoft 365 Business Standard to Basic license appears a savvy decision. It can prove a fruitful & defining strategy for organizations.

Pre-requisite for Downgrading Microsoft 365 Subscription (Do Not Skip!)

Switching from Business “Standard” to Business “Basic” without backing up tenant data is a perfect recipe for disaster. It can result in:

• Unrecoverable Data Loss
• Corrupted PST files
• Major workflow disruption.

But how? Because many M365 Business Standard users depend on local Outlook Desktop data files (.OST and .PST) and cached Exchange modes. And when they remove the Standard license, desktop apps get blocked.

It means any unsynced local data, heavy mailbox archives, or locally kept compliance data are at immediate risk. It can become inaccessible or corrupted.

So, as an IT leader or business owner, how can you downgrade from Standard to a Basic license without the risk of data loss?

The industry-standard solution to secure tenant data and switch license type is the SysTools Office 365 Backup and Restore tool.

• A best-rated backup and restore tool by MVP.
• It allows users to download complete Office 365 mailboxes’ data (emails, calendar, Contacts, & Documents) in bulk using a single admin account.
• It also supports In-Place Archive Office 365 mailboxes.
• It provides a built-in dashboard to track the backup process.
• To fasten the backup process, it also supports Concurrent Microsoft 365 backup.
• IT admins also save only freshly added data in the mailbox known as Delta Backup.
• This super-helpful backup tool is fully functional on Windows and Mac OS versions.

How to Downgrade From Microsoft 365 Business Standard to Basic? 4 Easy Steps

Here’s how to downgrade Microsoft 365 Business subscription:

Step 1: Buy the New Business “Basic” Licenses

• Open the Microsoft 365 admin center and log in
• Go to Billing >> select Purchase Services.
• Search “Microsoft 365 Business Basic”.
• Lastly, select the billing frequency >> buy the exact number of licenses for the users switching from “Standard” to “Basic”

Step 2: Switch from “Standard” to “Basic” License

• Navigate to “Users” >> click “Active Users”.
• Select the users to downgrade >> right-click the “License and apps tab” (in the flyout pane on the right).
• Click the “License” section to expand.
• Check the box for “Microsoft 365 Business Basic” >> uncheck “Microsoft 365 Business Standard”.
• Finally, hit “Save Changes”.

Step 3: Remove Unused/Empty “Standard” Licences

• Go to Billing >> right-click “Your Products”.
• Select the “Microsoft 365 Business Standard Subscription” >> choose “Remove Licenses”.
• Lower the quantity by the number of users downgraded >> press “Save”.

Step 4: Uninstall Desktop Apps (Optional But Recommended)

Once the “Standard” licenses are removed, users may experience “Unlicensed Product” errors. To fix this, instruct users to uninstall the desktop suite (apps) via Windows Settings or the Microsoft Uninstall tool.

Via Windows Settings:

• Open “Settings” (Press Windows Key + I).
• Select “Apps” (on the left sidebar) >> right-click “Installed Apps”.
• Type “Office” or “Microsoft 365” ( in the search bar at the top).
• In the search results, look for Office suite >> press the three dots next to it >> hit the “Uninstall” button.
• Lastly, right-click “Uninstall” again to confirm >> follow the next on-screen instructions.

Microsoft Uninstall Tool:

• Downloading Microsoft Support and Recovery Assistant.
• Open the software (SetupProd_OffScrub.exe) >> hit “Run” to install the tool.
• Choose “Microsoft 365” or your current Office version (from the list).
• Hit “Next” >> move forward with the on-screen prompts >> reboot your PC.

SysTools Suggests: Upgrade Microsoft 365 Subscription Plans: Personal, Family, and Business Options Explained

Author’s Final Words

Switching to the Microsoft 365 Basic License is a healthy practice for IT admins and organizations. Especially for those whose workflows are mostly managed on the cloud. It not only economizes resources but also eases compliance rules that optimize the system for employees.

But always keep in mind not to execute an enterprise-level downgrade without any data retention and backup! It can manifest into catastrophic events.

People Also Liked: How Many Devices Per User? Microsoft 365 Maximum Devices Limit Explained!

FAQs (Frequently Asked Questions)

Q.1 Can I downgrade my Microsoft 365 subscription?
Absolutely Yes! You can downgrade Microsoft 365 subscriptions by following the given steps:

• Purchase new Basic licenses
• Switch licenses
• Remove unused Standard Licenses
• Uninstall desktop apps

Q.2 How to downgrade from Microsoft 365 Business Standard to Basic?
Here’s how to downgrade from Microsoft 365 Business Standard to Basic license:

• Buy new Basic licenses for the users.
• Switching license from Standard to Basic.
• Delete empty Standard Licenses.
• Remove O365 desktop apps.

Q.3 How do I cancel my Microsoft 365 Business Basic subscription?

To cancel the Microsoft 365 Business Basic subscription:

• Open Microsoft Admin center (use admin account).
• Go to Billing >> Your Products >> select the subscription.
• Select Cancel Subscription or turn off Recurring Billing.

Q.4 How to downgrade O365 version for a single user?

Steps to downgrade O365 version for a single user are as follows:

• Simply purchase a single Basic license.
• Assign it to the specific user via the Active Users Portals
• Lastly, remove the standalone license.

Q.5 How to upgrade Microsoft 365 subscription for free?
No, you cannot upgrade the Microsoft 365 subscription for free. However, using a 30-day to 60-day free trial, you can try out the incredible features of a higher-tier license (E3 or Business Premium) within Admin Center