Small and medium businesses (SMBs) with remote employees have shifted from a single “office network” model to a Zero Trust model. Microsoft 365 Business Premium (BPP) already includes extensive security layers – identity protection, device management, email scanning, and endpoint defenselearn.microsoft.comlearn.microsoft.com. With those controls fully configured, the traditional on-premises network perimeter (and thus an expensive firewall appliance) becomes far less critical. In practice, a standard router/NAT firewall combined with Windows/macOS built‑in firewalls and M365’s cloud protections can cost‑effectively secure a remote SMB. We explain how M365 BPP’s features cover typical firewall functions, and when a dedicated firewall (beyond a basic one) may not be needed.

Built-In Security in Microsoft 365 Business Premium

Microsoft 365 Business Premium bundles multiple security layers: endpoint protection, identity/access controls, device management, and more. Key built‑in features include:

• Endpoint Security – Microsoft Defender for Business (included) provides next‑gen antivirus, threat detection/response and a host firewall on each devicelearn.microsoft.comlearn.microsoft.com. Devices (Windows, macOS, iOS, Android) get managed protection against ransomware, malware and network attacks.
• Email and App Protection – Defender for Office 365 Plan 1 (included) scans email attachments and links for malware and phishing. Safe Links/Safe Attachments help stop threats before they reach userslearn.microsoft.com.
• Identity and Access (Zero Trust) – Azure AD Premium P1 (included) enables Conditional Access policies and mandatory multi-factor authenticationmicrosoft.comlearn.microsoft.com. Only compliant, enrolled devices can access company resources, and admins/devices are always re‑authenticated.
• Device Management – Microsoft Intune can enforce security policies on all devices: requiring device encryption (BitLocker), patching, endpoint firewalls, and even configuring VPN or Wi‑Fi profileslearn.microsoft.comlearn.microsoft.com. In short, Intune ensures every device meets the company’s security baseline before it connects.
• Secure Remote Access – Azure AD Application Proxy (via Azure AD P1) publishes any on‑premises app through Azure AD, so remote users can reach internal resources without opening inbound firewall portssherweb.com. This often replaces a VPN or on‑site reverse proxy, making remote access simpler and safer.

These built-in layers cover most attack vectors. For example, M365 BPP’s Defender for Business includes a managed host-based firewall and web filtering, so each laptop is protected on any networklearn.microsoft.com. And Conditional Access can block sign-ins from unsecured locations or unregistered devices, effectively extending the network perimeter to only trusted endpoints.

Zero Trust and Remote Work

In a modern SMB, employees “can work anywhere,” so the old model of trusting the office LAN no longer applies. As Microsoft describes, traditional protections rely on firewalls and VPNs at fixed locations, whereas Zero Trust assumes no network is inherently safelearn.microsoft.com. Every sign-in is verified (via Azure AD) and every device is checked (via Intune) no matter where the user is.

In this diagram, a corporate firewall on the left no longer suffices when employees roam (right side)learn.microsoft.com. With Business Premium, identity and device policies take over: multifactor authentication and Conditional Access ensure only known users on compliant devices connectlearn.microsoft.commicrosoft.com. In effect, the organization’s “perimeter” is the cloud. Remote workers authenticate directly to Azure/Office 365 and receive Microsoft’s protection (e.g. encrypted tunnels, safe browser checks), rather than passing first through an on‑site firewall.

Host-Based Firewalls and Device Security

Even without a hardware firewall, devices must protect themselves on untrusted networks. All common operating systems include a built‑in firewall. Enabling these host firewalls is free and highly effective – many MSP guides advise turning on Windows Defender Firewall (and macOS’s) on every device before even buying a hardware applianceguardianangelit.com. Microsoft Defender for Business not only installs antivirus but can manage each device’s firewall settings: for instance, Intune can push a profile that blocks all inbound traffic except essential serviceslearn.microsoft.com.

By treating each endpoint as its own secured “network edge,” an SMB covers the user’s connection in coffee shops or home Wi‑Fi. For example, if a user’s laptop is on public Wi‑Fi, the Windows firewall (enforced by Defender policies) stops inbound attacks, while Defender’s web protection filters malicious sites. This layered endpoint approach (antivirus+EDR + host firewall + encrypted disk) significantly shrinks the need for a central firewall inspecting all traffic.

Network Perimeter and When to Use Firewalls

If an SMB still maintains an office or data closet, some firewall or router will normally be used for basic perimeter functions (NAT, DHCP, segmentation of guest networks, etc.). However, the level of firewall needed is typically minimal. A basic managed router or inexpensive UTM is often enough to separate IoT/guest Wi-Fi from internal staff, and to enforce outbound rules. Beyond that, heavy enterprise firewalls yield little benefit in a predominantly cloud-centric setup.

For remote-heavy SMBs, many experts suggest zero-trust access (e.g. VPN, ZTNA) instead of relying on office hardware. ControlD’s SMB security checklist, for instance, recommends ensuring VPN or Zero-Trust Network Access for remote employees, rather than expecting them to route through the office firewallcontrold.com. In other words, with cloud apps and M365-managed devices, the on‑site firewall sees only its local subnet – almost all work and threats are already handled by Microsoft’s cloud services and endpoint defenses.

Configuring M365 Business Premium as Your “Firewall”

A Business Premium tenant can be tuned to cover typical firewall functions:

• Enroll and Update All Devices: Use Intune (part of BPP) to enroll every company device (Windows, Mac, mobile) and onboard them to Defender for Businesslearn.microsoft.comlearn.microsoft.com. Ensure full disk encryption (BitLocker/FileVault), automatic OS updates, and Defender real‑time protection are all enabled.
• Enforce Host Firewalls: Create an Intune endpoint security policy that turns on Windows Defender Firewall for all profiles (Domain/Private/Public) and disables unnecessary inbound rulesguardianangelit.comlearn.microsoft.com. Similarly, enable the macOS firewall via Intune configuration. This ensures devices block unwanted network traffic by default.
• Enable Multi-Factor Authentication & Conditional Access: Turn on Azure AD security defaults or define Conditional Access policies so that every login requires MFA and checks device compliancelearn.microsoft.commicrosoft.com. You can restrict access by device state or location, preventing unknown devices from even reaching company apps.
• Protect Email and Apps: Activate Defender for Office 365 (Plan 1) to scan all incoming email and Teams messages. Safe Links/Attachments in Office documents serve as an additional layer that no firewall can providelearn.microsoft.com.
• Use Application Proxy for Internal Apps: If you have any on-premises servers, install the Azure AD Application Proxy connector. This publishes apps (e.g. intranet, CRM) through Azure without punching holes in your firewallsherweb.com. Remote users then access the app via Azure AD login, with no need to maintain a VPN or open router ports.
• Monitor and Respond: Use Microsoft 365 Defender’s security portal (included) to monitor alerts. Its threat analytics will flag unusual traffic or sign-ins. Automated investigation and remediation in Defender for Business can contain a threat on a device before it spreads.
• Network-Level Protections (Optional): For extra DNS- or web-filtering, an SMB might add services like Microsoft Defender SmartScreen (built into Edge/Windows) or a cloud DNS filter. These complement – but don’t replace – the firewall; they block malicious domains at the device level.

In this configuration, each device and identity becomes a control point. The M365 stack effectively sits in front of your data, rather than hardware at the network perimeter.

Cost vs. Benefit of Dedicated Firewalls

Without regulatory mandates, a high-end firewall appliance is often not cost-justified for an SMB fully on M365. The hardware itself and ongoing subscriptions (threat feeds, VPN licenses, maintenance) add significant cost. Given that M365 Business Premium already provides next-generation protection on endpoints and enforces secure access, the marginal security gain from a $2k+ firewall is small for remote-centric SMBs.

That said, a simple firewall/router is still recommended for the office LAN. It can provide:

• Basic NAT/segmentation: Separating staff devices from guest or IoT VLANs.
• VPN termination (if needed): A site‑to‑site VPN or point‑to‑site gateway for branch offices or legacy systems (though Azure VPN with Azure AD is an alternative).
• On‑prem device connectivity: If on-premises servers exist, the firewall can regulate incoming traffic.

For example, installing Azure AD Application Proxy (no cost beyond BPP license) often removes the need to expose an on‑site port for remote accesssherweb.com. Similarly, if home users connect via secure VPN with M365 credentials, the corporate firewall is bypassed by design.

In contrast, host-based security and cloud controls cover most threats: phishing and remote intrusion are handled by Defender and MFA, malware is stopped at the device, and data exfiltration is controlled by identity and DLP settings. As one MSP guide notes, for small businesses the built-in OS firewalls should be used before investing in hardware firewallsguardianangelit.com. In practice, the total protective overlap from Intune+Defender+Conditional Access can eliminate many risks that a hardware firewall is meant to address.

Conclusion

For a typical SMB with Microsoft 365 Business Premium fully enabled, the need for an expensive dedicated firewall is greatly reduced. M365 BPP delivers comprehensive security – endpoint protection, email filters, and zero-trust access – that, when properly configured, cover most attack vectorslearn.microsoft.comlearn.microsoft.com. A basic network firewall (even the one built into a router) is useful for simple segmentation, but beyond that most protections are handled by Microsoft’s cloud services and host firewalls. In short, by leveraging Business Premium’s features (Defender, Intune, Azure AD P1, etc.), an SMB can safely rely on default and cloud-managed defenses rather than purchasing a high-end firewall applianceguardianangelit.comsherweb.com.

Sources: Microsoft documentation and SMB security guides detailing Microsoft 365 Business Premium’s included protectionslearn.microsoft.comlearn.microsoft.comcontrold.comguardianangelit.comsherweb.com, and industry best practices for SMB security in a remote-work, zero-trust modellearn.microsoft.comcontrold.com.