A company is planning to implement Microsoft 365. The company has not purchased licenses from Microsoft. You need to recommend a licensing solution. Which licensing solution should you recommend?

Full User Subscription Licenses (USLs) are the appropriate starting point for organizations with no existing Microsoft licensing. They provide complete access to Microsoft 365 services from scratch without requiring any prerequisite licenses, making them the only valid option for a net-new customer deploying Microsoft 365.

Step-up USLs are designed for customers who already have a qualifying lower-tier Microsoft license and want to upgrade to a higher-tier plan, requiring a pre-existing base license.

Add-on USLs provide supplementary features or services on top of an existing Microsoft 365 base subscription, and cannot be purchased standalone without a qualifying base license already in place.

From Software Assurance (SA) USLs are only available to customers who already own on-premises Microsoft licenses covered under Software Assurance, allowing them to transition to cloud services - not applicable to a company with no prior Microsoft licensing.