Not All Microsoft 365 Accounts Are Equal Why Defense Contractors Must Buy Direct from Microsoft Don't Let Resellers Like GoDaddy Block Your CMMC Compliance
GoDaddy's Microsoft 365 lacks the essential security features required for CMMC Level 1. Learn why you need to buy direct—and how to migrate if you're already stuck with a reseller account.
⚠️ CRITICAL WARNING FOR DEFENSE CONTRACTORS
Microsoft 365 purchased through GoDaddy (or other web hosting providers) is NOT sufficient for CMMC Level 1 compliance.
GoDaddy's reseller version lacks essential security features required to protect Federal Contract Information (FCI):
- ❌ No Microsoft Intune – Cannot manage or secure devices
- ❌ No Azure AD Premium P1 – Cannot enforce Conditional Access policies
- ❌ No Microsoft Defender for Business – No endpoint threat protection
- ❌ Limited Data Loss Prevention – Cannot adequately protect FCI from unauthorized sharing
- ❌ Restricted Admin Access – GoDaddy maintains control over your tenant
Bottom line: If you're pursuing CMMC compliance, you must use Microsoft 365 Business Premium purchased directly from Microsoft.
Table of Contents
1. Introduction: The Hidden Differences
If you're a small defense contractor working toward CMMC Level 1 compliance, you might assume that "Microsoft 365 is Microsoft 365" regardless of where you purchase it. Unfortunately, that assumption could derail your entire compliance effort.
Many small businesses purchase Microsoft 365 through their web hosting provider—companies like GoDaddy, Bluehost, HostGator, or IONOS—often because it's convenient to bundle email with domain registration and web hosting. While this approach works fine for basic email and document editing, it creates a critical problem for defense contractors: GoDaddy's Microsoft 365 offering lacks the security features required for CMMC compliance.
📌 Important Clarification
You cannot use Microsoft 365 without Azure Active Directory. Azure AD is the foundational identity platform that comes automatically with every M365 subscription—whether from GoDaddy or Microsoft direct.
The key difference is which features of Azure AD and M365 are included in your subscription. GoDaddy's reseller versions include only basic features, while Microsoft's direct Business Premium plan includes the advanced security capabilities needed for CMMC.
Why Does This Happen?
GoDaddy and similar companies are Microsoft Cloud Solution Providers (CSP). They purchase Microsoft 365 licenses at wholesale prices, rebrand them with their own support and billing, and resell them to small businesses. To maintain their competitive pricing and support model, they typically offer only the basic Microsoft 365 plans—specifically Business Basic and Business Standard—which lack the advanced security features included in Business Premium.
For a typical small business needing only email and Office applications, this limitation isn't a problem. But for defense contractors handling Federal Contract Information (FCI), these missing features make CMMC compliance impossible.
2. Feature-by-Feature Comparison
Let's examine the critical differences between GoDaddy's Microsoft 365 offering and Microsoft's direct Business Premium plan—the minimum required for CMMC Level 1 compliance.
Email and Productivity (Similar)
| Feature | GoDaddy M365 | Microsoft Direct |
|---|---|---|
| Exchange Online (Email) | ✓ Yes | ✓ Yes |
| 50 GB Mailbox | ✓ Yes | ✓ Yes |
| Office Desktop Apps (Word, Excel, etc.) | ✓ Yes | ✓ Yes |
| OneDrive (1 TB storage) | ✓ Yes | ✓ Yes |
| Microsoft Teams | ✓ Yes | ✓ Yes |
Security and Compliance (Critical Differences)
| Feature | GoDaddy M365 | Microsoft Direct |
|---|---|---|
| Microsoft Intune (Device Management) | ✗ NOT INCLUDED | ✓ INCLUDED |
| Azure AD Premium P1 | ✗ Basic Only | ✓ INCLUDED |
| Conditional Access Policies | ✗ Not Available | ✓ Full Support |
| Microsoft Defender for Business | ✗ NOT INCLUDED | ✓ INCLUDED |
| Device Compliance Policies | ✗ No | ✓ Yes |
| BitLocker Management | ✗ No | ✓ Yes |
| Advanced Threat Protection | ✗ No | ✓ Yes |
| Attack Surface Reduction Rules | ✗ No | ✓ Yes |
| Data Loss Prevention (DLP) for FCI | ⚠ Basic Email Only | ✓ Full (Email, OneDrive, SharePoint, Teams) |
| Full Admin Portal Access | ⚠ Limited | ✓ Complete |
⚠️ Why These Features Matter for CMMC
CMMC Level 1 Access Control (AC) requirements demand:
- Device management (Intune): Required to enforce BitLocker encryption, firewall rules, and antivirus updates on all company devices
- Conditional Access: Required to block access from non-compliant or compromised devices
- Endpoint protection (Defender): Required to detect and respond to malware, ransomware, and other threats
- Comprehensive DLP: Required to prevent accidental or intentional FCI disclosure via email, file sharing, or cloud storage
Without these capabilities, you cannot demonstrate compliance with CMMC Level 1 access control practices (AC.L1-3.01.01, .02, .20, .22).
3. Why This Matters for CMMC Compliance
CMMC Level 1 requires defense contractors to implement 17 security practices across six domains. The Access Control (AC) domain alone requires capabilities that simply don't exist in GoDaddy's Microsoft 365 offering.
AC.L1-3.01.01: Authorized Access Control
Requirement: Limit information system access to authorized users, processes acting on behalf of authorized users, or devices (including other information systems).
What you need:
- Azure AD with Conditional Access to enforce device compliance checks before granting access
- Intune device compliance policies to verify devices meet security requirements (BitLocker, antivirus, firewall)
- Multi-factor authentication (MFA) enforcement for all users (available in both versions, but easier to manage with Azure AD P1)
What GoDaddy M365 lacks: Without Intune and Azure AD Premium P1, you cannot verify device compliance or block non-compliant devices from accessing FCI. This is a fundamental gap that makes the AC.L1-3.01.01 practice impossible to fully implement.
AC.L1-3.01.20: External Connections
Requirement: Verify and control/limit connections to and use of external information systems.
What you need:
- Microsoft Defender for Endpoint to monitor and control external network connections
- Web content filtering to block access to malicious or unauthorized websites
- Attack Surface Reduction rules to prevent exploitation through external connections
What GoDaddy M365 lacks: No endpoint detection and response (EDR) capability, no web filtering, no visibility into device network connections. You're essentially flying blind when it comes to external threat vectors.
AC.L1-3.01.22: Control Public Information
Requirement: Control information posted or processed on publicly accessible information systems.
What you need:
- Comprehensive DLP policies covering email, OneDrive, SharePoint, and Teams to prevent FCI from being shared externally
- External sharing controls in SharePoint and OneDrive with granular permissions
- Guest access management in Azure AD to control external collaboration
What GoDaddy M365 lacks: DLP in GoDaddy's plans typically covers only email, not OneDrive, SharePoint, or Teams. This leaves massive gaps where FCI could be accidentally or intentionally disclosed through file sharing or collaboration tools.
✅ What Microsoft 365 Business Premium Provides
When you purchase Microsoft 365 Business Premium directly from Microsoft ($22/user/month), you get:
- ✓ Microsoft Intune for complete device lifecycle management
- ✓ Azure AD Premium P1 for Conditional Access and advanced identity protection
- ✓ Microsoft Defender for Business for endpoint threat detection and response
- ✓ Microsoft Purview Information Protection for comprehensive DLP across all M365 services
- ✓ Full administrative control over all security settings and policies
- ✓ Direct Microsoft support from engineers who understand the platform
This is the minimum viable platform for CMMC Level 1 compliance.
4. Pricing: Is GoDaddy Really Cheaper?
At first glance, GoDaddy's Microsoft 365 pricing might seem attractive, especially when bundled with domain and hosting services. However, when you factor in the features required for CMMC compliance, the value proposition changes dramatically.
GoDaddy M365
Business Standard
Through GoDaddy
- ✓ Email (50 GB)
- ✓ Office Apps
- ✓ OneDrive (1 TB)
- ✓ Teams
- ✗ Intune
- ✗ Defender
- ✗ Azure AD P1
- ✗ Full DLP
❌ Not Suitable for CMMC
Microsoft 365
Business Premium
Direct from Microsoft
- ✓ Email (50 GB)
- ✓ Office Apps
- ✓ OneDrive (1 TB)
- ✓ Teams
- ✓ Intune
- ✓ Defender for Business
- ✓ Azure AD Premium P1
- ✓ Full DLP
✅ CMMC Level 1 Ready
Microsoft 365
E3
Direct from Microsoft
- ✓ Everything in Business Premium
- ✓ Advanced eDiscovery
- ✓ Advanced Compliance
- ✓ Information Barriers
- ✓ Better for 50+ users
Great for larger contractors
Real-World Cost Comparison for Small Contractors
| Team Size | GoDaddy M365 Standard | Microsoft Business Premium | Annual Difference |
|---|---|---|---|
| 5 users | $90/month ($1,080/year) | $110/month ($1,320/year) | +$240/year |
| 10 users | $180/month ($2,160/year) | $220/month ($2,640/year) | +$480/year |
| 15 users | $270/month ($3,240/year) | $330/month ($3,960/year) | +$720/year |
💡 The Real Question
Is saving $240-$720 per year worth losing your ability to compete for defense contracts?
The answer is clearly no. Without CMMC compliance, you cannot bid on or win defense contracts that require FCI protection. The cost of non-compliance—lost revenue opportunities—far exceeds the modest savings from using GoDaddy's limited M365 offering.
Think of Microsoft 365 Business Premium not as an expense, but as an essential business investment that enables you to pursue defense contracts worth tens or hundreds of thousands of dollars.
5. How to Tell What You Have
Not sure whether you have GoDaddy's Microsoft 365 or a direct Microsoft subscription? Here are three quick ways to check:
Check #1: Where Do You Pay?
- Review your monthly bills or credit card statements
- If charges come from GoDaddy, Bluehost, HostGator, IONOS, or another web host → You have a reseller version
- If charges come from Microsoft or appear as "Microsoft 365" → You likely have direct Microsoft
Check #2: Can You Access Intune?
- Open a web browser and navigate to: intune.microsoft.com
- Sign in with your Microsoft 365 admin account
- If you see the Intune admin center with device management options → You have the features you need
- If you get a "Permission denied" error or can't access the site → You likely have a limited reseller version
Check #3: Review Your License Assignment
- Sign in to admin.microsoft.com
- Navigate to Users > Active users
- Click on any user account
- Click the "Licenses and apps" tab
- Look at the license name:
- If it says "Microsoft 365 Business Basic" or "Business Standard" (through GoDaddy) → Insufficient for CMMC
- If it says "Microsoft 365 Business Premium" → Good (if purchased direct from Microsoft)
- If it says "Microsoft 365 E3" or "E5" → Excellent
⚠️ What If You Have GoDaddy M365?
If any of these checks confirm you have GoDaddy (or another reseller's) Microsoft 365, you'll need to migrate to a direct Microsoft subscription before pursuing CMMC compliance. The migration process is covered in the next section.
6. Migrating from GoDaddy to Microsoft Direct
If you've determined that you have GoDaddy Microsoft 365, don't panic. Migration to direct Microsoft 365 is a well-established process, though it requires careful planning to avoid data loss or extended downtime.
⚠️ Critical Warning
Do NOT simply cancel your GoDaddy M365 and sign up for a new Microsoft account. This will result in complete data loss—all emails, files, and settings will be gone.
Instead, follow a proper migration process that transfers your data from the GoDaddy tenant to your new Microsoft tenant.
Migration Options
Option A: Professional Migration Service (Recommended)
Cost: $500-2,000 depending on data volume and complexity
Timeline: 1-2 weeks
Best for: Most contractors who want minimal risk and downtime
Pros:
- ✓ Complete email history preserved
- ✓ All OneDrive and SharePoint files transferred
- ✓ Minimal downtime (often just hours)
- ✓ DNS changes handled professionally
- ✓ Expert support if issues arise
- ✓ Lower overall risk
Recommended providers:
- BitTitan MigrationWiz: Self-service tool (~$12/mailbox) with excellent documentation
- Microsoft Partners: Search at microsoft.com/solution-providers
- SkyKick: Partner-focused platform for automated migrations
Option B: DIY Migration (Not Recommended)
Cost: $0 (just your time investment)
Timeline: 2-4 weeks
Best for: Very tech-savvy contractors with ample time and high risk tolerance
Cons:
- ❌ High risk of data loss if mistakes are made
- ❌ Complex technical process requiring PowerShell and Microsoft Graph API knowledge
- ❌ Significant potential downtime
- ❌ No support if things go wrong
- ❌ May take weeks to complete properly
High-Level Migration Process
- Purchase Microsoft 365 Business Premium
- Go to microsoft.com/microsoft-365/business
- Purchase the required number of licenses
- Do NOT cancel GoDaddy yet—you'll run both temporarily
- Set Up New Microsoft Tenant
- Create new tenant (yourcompany.onmicrosoft.com)
- Add your custom domain (yourcompany.com)
- Verify domain ownership via DNS TXT record
- Create user accounts for all employees
- Migrate Email
- Use IMAP migration or third-party tool (BitTitan recommended)
- Migrate all mailboxes with complete history
- Verify successful transfer before proceeding
- Migrate OneDrive and SharePoint Files
- Use SharePoint Migration Tool or migration service
- Transfer all files with permissions preserved
- Verify integrity of transferred files
- Update DNS Records
- Change MX records to point to Microsoft (not GoDaddy)
- Update Autodiscover, SPF, DKIM, and DMARC records
- Monitor email flow carefully during transition
- Configure Security
- Enable Security Defaults or Conditional Access
- Enroll devices in Intune
- Configure Microsoft Defender for Business
- Set up Data Loss Prevention policies
- Test Everything
- Test email send/receive functionality
- Verify file access in OneDrive/SharePoint
- Test Teams meetings and chat
- Confirm device access to Microsoft 365
- Verify users can sign in with MFA
- Cancel GoDaddy
- Only after confirming everything works in new tenant
- Keep GoDaddy active for 30-day overlap if budget allows (safety net)
- Export any final data before cancellation
📅 Typical Migration Timeline
- Week 1: Purchase Microsoft direct, set up new tenant, create user accounts
- Week 2: Migrate email and files, verify data integrity
- Week 3: Update DNS records, configure security settings (Intune, Defender, DLP)
- Week 4: Final testing, user training, cancel GoDaddy subscription
Total time: Approximately 4 weeks from start to finish for a typical 5-10 person contractor
After Migration: Complete Your CMMC Level 1 Compliance in Weeks
Once you have Microsoft 365 Business Premium configured, you still need to implement all 17 CMMC Level 1 practices and generate 142 required artifacts. Our Turnkey package includes 140+ professional templates specifically designed for Microsoft 365, plus 8 expert consultation sessions to guide you through implementation.
✅ What You Get:
- ✓ All 142 artifacts with professional templates for M365
- ✓ 8 bi-weekly expert consultation sessions (1 hour each)
- ✓ 4 weeks from start to SPRS submission
- ✓ 4 weeks of post-submission support
- ✓ Save $500 - Just $2,495 (originally $2,995)
Traditional consultants charge $15,000-$50,000+ for this. You save $47,500+ and get compliant 5+ months faster.
7. Frequently Asked Questions
A: No. GoDaddy typically doesn't offer Microsoft 365 Business Premium or Enterprise plans through their reseller program. Even if they did, you'd still have the issue of limited admin access and GoDaddy maintaining control over your tenant. The only reliable solution is to migrate to a direct Microsoft subscription.
A: No. Your email addresses (user@yourcompany.com) remain the same. Only the hosting platform changes from GoDaddy to Microsoft. Your domain name stays with you, and your email addresses are simply reconfigured to point to Microsoft's servers instead of GoDaddy's.
A: Your domain registration is completely separate from your Microsoft 365 subscription. You can keep your domain registered with GoDaddy (or transfer it to another registrar like Namecheap or Google Domains) while using Microsoft 365 direct for email and productivity. There's no requirement to move your domain registration.
A: With professional migration services, email downtime is typically only 1-4 hours during the DNS cutover. File access may be limited for 24-48 hours while SharePoint and OneDrive data transfers, but you can usually continue working from local copies. DIY migrations may have significantly more downtime due to the complexity of the process.
A: Yes, they're either misinformed or being misleading. Ask them specifically: "Does your Microsoft 365 offering include Microsoft Intune, Azure Active Directory Premium P1, and Microsoft Defender for Business?" The answer will be no. These critical security features are only available in Microsoft 365 Business Premium or higher, which GoDaddy doesn't typically offer in their reseller program.
A: If you're a small business that only needs basic email and Office apps, and you're not handling sensitive data or pursuing CMMC compliance, GoDaddy's M365 offering might be adequate. However, even for general business use, the added security features in Microsoft's direct offering provide better protection against modern threats. Given the modest price difference ($4-7/user/month), most businesses benefit from the enhanced security of Business Premium.
A: Any web hosting provider or domain registrar offering Microsoft 365 is likely providing a limited reseller version. This includes Bluehost, HostGator, IONOS (1&1), Namecheap, DreamHost, and others. The general pattern: if you bought M365 as part of a bundle with web hosting or domain registration, it's probably insufficient for CMMC. Always purchase directly from Microsoft or through a Microsoft Partner who gives you full administrative control.
A: When done properly with professional tools or services, migration risk is very low. The key is to never cancel your GoDaddy subscription until you've confirmed that all data has been successfully migrated and is accessible in your new Microsoft tenant. Running both systems in parallel for a few weeks provides a safety net. DIY migration does carry higher risk due to the technical complexity, which is why we recommend professional migration services for most contractors.
8. Conclusion and Next Steps
The difference between GoDaddy Microsoft 365 and direct Microsoft 365 Business Premium isn't just about features—it's about your ability to compete for defense contracts and protect Federal Contract Information. While GoDaddy's offering works fine for basic business productivity, it simply cannot support CMMC Level 1 compliance.
Key Takeaways
- GoDaddy M365 lacks essential security features required for CMMC compliance, including Intune, Azure AD Premium P1, and Microsoft Defender for Business
- The cost difference is modest—roughly $240-$720 per year for a small team—but the capability difference is enormous
- Migration is manageable with proper planning and professional assistance, typically taking 2-4 weeks
- Microsoft 365 Business Premium ($22/user/month direct from Microsoft) is the minimum viable platform for CMMC Level 1
- Direct Microsoft support is superior to reseller support for technical Microsoft 365 issues
What to Do Next
If You Currently Have GoDaddy M365:
- Verify your current setup using the three checks outlined in Section 5
- Get quotes from 2-3 professional migration services (BitTitan, Microsoft Partners, SkyKick)
- Purchase Microsoft 365 Business Premium directly from Microsoft
- Schedule your migration for a low-activity period (avoid month-end or busy seasons)
- Budget 2-4 weeks for complete migration and testing
- After migration, implement CMMC security controls with our 140+ professional templates covering all 142 required artifacts - explore our Compliance Toolkit
If You're Evaluating Microsoft 365 Options:
- Purchase directly from Microsoft at microsoft.com/microsoft-365/business
- Avoid bundled offerings from web hosts or domain registrars
- Verify you can access intune.microsoft.com before committing
- Choose Microsoft 365 Business Premium at minimum ($22/user/month)
- Budget for professional setup assistance if you're not technically experienced
✅ The Bottom Line
For defense contractors pursuing CMMC Level 1 compliance, Microsoft 365 Business Premium purchased directly from Microsoft is not optional—it's a requirement. The modest additional cost compared to reseller versions is a necessary investment in your ability to handle Federal Contract Information and compete for defense contracts.
Don't let an inadequate Microsoft 365 subscription derail your compliance efforts and eliminate your competitive advantage in the defense industrial base.
Ready to Achieve CMMC Level 1 Compliance?
Now that you have the right Microsoft 365 subscription, you need to implement all 17 CMMC Level 1 practices across 6 security domains. Overwatch Tools provides everything you need—from free assessment to complete turnkey compliance.
Free CMMC Assessment
$0
- ✓ Complete evaluation of all 17 CMMC Level 1 practices
- ✓ Professional self-assessment with instant results
- ✓ Actionable compliance roadmap
- ✓ Identify exactly what you're missing
CMMC Level 1 Compliance Toolkit
$1,495
- ✓ All 142 required artifacts clearly defined
- ✓ 140+ professional templates for Microsoft 365
- ✓ Implementation procedures and workflows
- ✓ SPRS submission report generation
- ✓ Email support included
Turnkey CMMC Level 1 Package
$2,995 $2,495
Save $500 - Limited Time
- ✓ Everything in Toolkit PLUS:
- ✓ 8 bi-weekly expert consultation sessions (1 hour each)
- ✓ Complete customized practice artifact library
- ✓ 4 weeks from start to SPRS submission
- ✓ 4 weeks of post-submission support
- ✓ Full platform access with annual updates
Why Overwatch Tools?
We built our toolkit specifically for small defense contractors using Microsoft 365 Business Premium. You get 140+ professional templates covering all 142 required artifacts across 6 security domains—Access Control, Identification & Authentication, Media Protection, Physical Protection, System & Communications Protection, and System & Information Integrity.
Traditional CMMC consultants charge $15,000-$50,000+ for Level 1 compliance. Our Turnkey package saves you $47,500+ and gets you compliant in just 4 weeks instead of 6+ months.
Questions? Email us at support@overwatchtools.com
About Overwatch Tools
Overwatch Tools specializes in CMMC Level 1 compliance solutions for small defense contractors. We provide practical, affordable templates and guidance to help contractors achieve compliance without enterprise-level complexity or cost.
Disclaimer: This article provides general guidance on Microsoft 365 subscription differences and CMMC compliance requirements. Every organization's situation is unique.