Why Business Premium can replace most perimeter security for typical SMBs

Short answer

For a cloud-first SMB that’s fully leveraging Microsoft 365 Business Premium and has many remote workers, a high-priced “next‑gen” or UTM firewall at each office is rarely cost‑effective. A reliable business-class router/firewall that provides NAT, stateful inspection, VLANs/guest Wi‑Fi, and basic VPN/site‑to‑site is typically sufficient when combined with Business Premium’s endpoint, identity, email, and data protections.
Consider an advanced firewall only if you have specific on-prem/network needs (for example, hosting public-facing services, heavy site‑to‑site VPN/SD‑WAN, regulated environments that explicitly require network IDS/IPS, or complex WAN requirements).

Why Business Premium can replace most perimeter security for typical SMBs

Endpoint protection and EDR everywhere (on and off the office network)
- Microsoft Defender for Business (included in Business Premium) delivers next‑gen AV, endpoint detection and response, automated investigation/remediation, firewall management, attack surface reduction (ASR) rules, controlled folder access (ransomware mitigation), network protection, and web content filtering across Windows, macOS, iOS, and Android. These controls travel with the device, so remote workers are protected even off-network.
- References:
- What’s included in Defender for Business: https://learn.microsoft.com/en-us/defender-business/mdb-overview#what’s-included-with-defender-for-business
- ASR, network protection, firewall, and web protection capabilities: https://learn.microsoft.com/en-us/defender-business/mdb-asr#attack-surface-reduction-capabilities-in-defender-for-business
- Web content filtering (works on-premises and away): https://learn.microsoft.com/en-us/defender-endpoint/web-content-filtering
Email and collaboration threat protection
- Defender for Office 365 Plan 1 (included in Business Premium) adds Safe Links, Safe Attachments, and anti‑phishing to protect Exchange Online, SharePoint, OneDrive, and Teams from zero‑day malware/phishing/BEC. This removes the need for email filtering on the firewall.
- References:
- Defender for Office 365 overview and plan levels: https://learn.microsoft.com/en-us/defender-office-365/mdo-about
- Zero Trust with MDO and protection tiers: https://learn.microsoft.com/en-us/defender-office-365/zero-trust-with-microsoft-365-defender-office-365
Identity-driven Zero Trust access instead of network trust
- Business Premium includes Microsoft Entra ID P1 (formerly Azure AD P1). Conditional Access plus Intune device compliance lets you gate access to M365 and SaaS based on MFA, device health/compliance, platform, app, and location—without hairpinning traffic through a central firewall.
- Reference:
- Conditional Access with Intune compliance: https://learn.microsoft.com/en-us/intune/intune-service/protect/conditional-access
- Business Premium FAQ (includes Intune and Entra ID P1): https://learn.microsoft.com/en-us/microsoft-365/business-premium/microsoft-365-business-faqs?view=o365-worldwide#does-microsoft-365-business-premium-include-the-full-capabilities-of-microsoft-intune
Data protection built into the cloud
- Sensitivity labels, encryption, and Microsoft Purview DLP in Business Premium protect data in email, SharePoint, OneDrive, and Office apps—addressing use cases that perimeter DLP/UTM appliances try to cover on a network chokepoint.
- References:
- Set up information protection in Business Premium (labels and DLP): https://learn.microsoft.com/en-us/microsoft-365/business-premium/m365bp-set-up-compliance?view=o365-worldwide
- Learn about DLP: https://learn.microsoft.com/en-us/purview/dlp-learn-about-dlp
Purpose-built for SMB Zero Trust
- Microsoft’s Zero Trust guidance for SMB explicitly positions Business Premium with Defender for Business and Defender for Office 365 as the foundation to “verify explicitly,” “use least privilege,” and “assume breach,” reducing reliance on perimeter devices.
- Reference:
- Zero Trust guidance for small businesses: https://learn.microsoft.com/en-us/security/zero-trust/guidance-smb-partner#additional-threat-protection

When a basic firewall is enough vs. when to consider more

A basic business-class router/firewall is enough when:
- You are primarily cloud/SaaS (Microsoft 365, line-of-business SaaS).
- You don’t host public-facing services on-prem.
- Remote users connect directly to the internet; you don’t backhaul traffic through HQ.
- You can implement simple VLANs for office/IoT/guest segmentation and provide site-to-site VPN only if needed.
Consider a higher-end firewall or specialized edge only if you require:
- Publishing on-prem apps to the internet and needing reverse proxy/WAF at the edge.
- Heavy site-to-site VPN/SD‑WAN, multi‑ISP load balancing, or strict QoS.
- Compliance mandates that call for network IDS/IPS at the perimeter and centralized packet logging.
- High-throughput VPN termination for many remote users or non‑Microsoft services that require network‑layer egress controls.

How to configure Microsoft 365 Business Premium to reduce or eliminate dedicated firewall appliances Below is a practical, step-by-step baseline you can apply. It assumes you manage devices with Intune and use Defender for Business and Defender for Office 365 that are included in Business Premium.

1) Identity and access (Zero Trust gatekeeping)

Require MFA for all users and admins.
Conditional Access policies (Entra ID P1):
- Require compliant device for access to Microsoft 365.
- Block legacy protocols (POP/IMAP/Basic auth) and require modern auth.
- Restrict by platform (for example, block unknown/unsupported OS versions).
- Require approved apps for mobile (Outlook/Office).
Reference: Conditional Access with Intune compliance policies: https://learn.microsoft.com/en-us/intune/intune-service/protect/conditional-access

2) Device onboarding and compliance

Enroll all Windows, macOS, iOS, and Android devices in Intune; define compliance policies that require:
- Disk encryption (BitLocker/FileVault), secure boot, OS version minimums, screen lock.
- Microsoft Defender Antivirus/EDR active on Windows; Defender for Business on macOS/iOS/Android where applicable.
Use device groups to target policies appropriately.
Reference: Device groups in Business Premium: https://learn.microsoft.com/en-us/microsoft-365/business-premium/m365bp-device-groups-mdb?view=o365-worldwide

3) Endpoint protection baselines (Defender for Business)

Verify default Defender for Business policies are applied; then harden:
- Attack Surface Reduction (ASR) rules—start in audit for a week, then enforce standard protection rules (for example, block LSASS credential theft, abused vulnerable signed drivers, WMI persistence).
- Controlled folder access to mitigate ransomware.
- Network protection to block malicious domains.
- Web content filtering to block risky categories (legal liability, adult, high bandwidth, etc.)—applies on and off the corporate network.
- Windows Defender Firewall with centrally managed rules via Intune; keep it enabled and only allow required inbound/outbound.
References:
- Policies to set up in Defender for Business (web filtering, controlled folder access, ASR): https://learn.microsoft.com/en-us/defender-business/mdb-view-edit-create-policies#policies-to-set-up-in-defender-for-business
- ASR + network protection + firewall capabilities: https://learn.microsoft.com/en-us/defender-business/mdb-asr#attack-surface-reduction-capabilities-in-defender-for-business
- Web content filtering details and off-network coverage: https://learn.microsoft.com/en-us/defender-endpoint/web-content-filtering
- Windows Firewall with Advanced Security overview: https://learn.microsoft.com/en-us/windows/security/threat-protection/windows-firewall/windows-firewall-with-advanced-security

4) Email and collaboration protection (Defender for Office 365 Plan 1)

Enable and tune:
- Safe Links (time-of-click protection across email and Office).
- Safe Attachments (detonation sandbox).
- Anti-phishing with impersonation protection for users and domains.
Implement DMARC, DKIM, and SPF for your domain.
Reference: MDO overview and plan differences: https://learn.microsoft.com/en-us/defender-office-365/mdo-about

5) Data protection (Microsoft Purview)

Publish sensitivity labels with encryption and usage rights for Confidential and Highly Confidential content; require justification to downgrade.
Turn on DLP policies for Exchange, SharePoint, OneDrive, and Office apps to prevent accidental sharing of PII/financial data.
Reference: Business Premium information protection setup: https://learn.microsoft.com/en-us/microsoft-365/business-premium/m365bp-set-up-compliance?view=o365-worldwide

6) Mobile and BYOD

Use Intune app protection policies (MAM) to enforce PIN, data leak prevention, and conditional launch for Outlook/Office on mobile.
Require approved client apps and app-based Conditional Access.

7) Patching and hygiene

Configure Windows Update for Business rings in Intune to keep devices current. Keep Defender AV/EDR signatures up to date.
Review Secure Score and Compliance Manager to track improvement areas.
Reference: Compliance Manager in Business Premium: https://learn.microsoft.com/en-us/microsoft-365/business-premium/m365bp-set-up-compliance?view=o365-worldwide#use-compliance-manager-to-get-started

Network design tips for a cost-effective SMB edge

Use a dependable business router/firewall for:
- ISP termination, NAT/stateful inspection.
- VLANs for Corp, Guest, and IoT; guest Wi‑Fi isolation on the APs.
- Optional site‑to‑site VPN between offices. Avoid backhauling all remote traffic through HQ.
- Simple inbound port forwarding only if truly needed; prefer cloud alternatives first.
Do not rely on perimeter TLS inspection to find threats; modern EDR/ASR on the endpoint and MDO do a better job for SaaS/cloud traffic, and TLS interception often breaks modern auth workflows.
Shift services off-prem where possible (files to OneDrive/SharePoint; apps to SaaS). If you must publish on-prem web apps, consider Microsoft Entra application proxy (included in P1) to avoid opening inbound ports.

Edge cases where high-end firewalls can still be justified

You host internet-facing workloads on‑prem and need WAF/reverse proxy and tight inbound publishing.
You require network IDS/IPS and packet capture for a compliance framework that explicitly demands it.
You operate many branches with high-volume site‑to‑site VPN/SD-WAN, advanced QoS, multi‑ISP path selection, or need >1–2 Gbps encrypted throughput.
You need complex segmentation inside a large on‑prem network with many legacy servers. If you have on-prem servers, also consider the Defender for Business servers add-on.
- Reference: Defender for Business servers add-on: https://learn.microsoft.com/en-us/office365/servicedescriptions/microsoft-365-service-descriptions/microsoft-defender-service-description#microsoft-defender-for-business-and-microsoft-defender-for-business-servers-add-on

Bottom line

For a typical remote-first SMB on Microsoft 365 Business Premium, invest in strong endpoint, identity, and data controls you already own rather than expensive UTM firewalls. Use a solid but basic firewall/router for connectivity, segmentation, and VPN as needed. Step up to advanced edge gear only when your business requirements clearly demand capabilities that Microsoft 365 and endpoint security cannot deliver at the host, identity, or data layers.

Additional references