What’s the Difference Between Office 365 and Microsoft 365?

We often come across references to both Office 365 and Microsoft 365 online, but what exactly are they? Which one should you use? What advantages do they offer? And is there really any distinction between the two? Let’s delve into the details.

Understanding Office 365

Office 365 is a Software as a Service (SaaS) solution that combines the traditional Microsoft Office desktop applications, Microsoft application services, and some new productivity services. These services are all available on Microsoft’s Azure cloud platform.

Introduced by Microsoft in June 2011, Office 365 is a subscription-based service that can be paid monthly or annually. It provides an incredibly cost-effective way for organizations to access their productivity workloads.


Office 365 includes the core desktop applications found in traditional versions of Microsoft Office, such as Word, Excel, PowerPoint, and Outlook. Additionally, it offers a suite of other apps and online services for cloud file storage, secure communication, and collaboration. Tools like Planner, OneDrive, Exchange, SharePoint, Yammer, and Microsoft Teams come together to provide an unparalleled user experience.

Introducing Microsoft 365

On April 21, 2020, Microsoft rebranded Office 365 as Microsoft 365. However, this change only applies to specific license types, specifically the small and medium business SKUs.


Until recently, Microsoft 365 was an enhanced version of Office 365 that included options for Windows 10 desktop licenses, the Intune device management solution, and more. It provided a one-stop solution for organizations placing their trust entirely in Microsoft as a solution provider.

READ  Where to Find Outlook.exe in Windows 10 and 11

All applications, service levels, and subscription packages for current customers remain the same. The rebranding simply allows Microsoft to unify its brands under fewer banners, merging the powerful productivity features and services of Office 365 with the platform-centric features of Microsoft 365.

With the world in lockdown, the rebranding may have gone unnoticed by many. However, the new name, Microsoft 365, is gradually gaining recognition and references to it are expected to increase on the web. Despite the rebrand, the suite will likely continue to be referred to as Office 365 for some time.

Microsoft Office vs. Microsoft 365: What’s the Difference?

Microsoft brand names can be confusing, with “Office” and “Microsoft” being used interchangeably over the years. Here’s a quick breakdown to clarify the distinctions:

Microsoft Office (2013, 2016, 2019) are software suites that you purchase upfront, with a one-time perpetual license. These suites are installed on your computer and can be used indefinitely. If you want access to the latest version, you need to buy a new copy that includes all the new features. Microsoft Office has been around for nearly three decades, with early versions bundling Word, Excel, and PowerPoint at a discounted price.

Interestingly, as part of Microsoft’s transition to subscription-based models, the latest versions of Office can now be licensed on a subscription basis for all users. From single home use licenses to enterprise-level subscriptions, Office can now be purchased as a subscription, although subscription pricing was previously only available to volume customers.

Microsoft 365 (formerly known as Office 365) is a cloud-based service that requires a monthly or annual subscription. It provides access to all Microsoft tools and apps hosted on Microsoft servers, including online versions of Microsoft Office. With Microsoft 365, there’s no need to physically install the software on your PC.

READ  What Is Microsoft Word?

Built as a cloud-first service but based on on-premises products like SharePoint Server and Exchange Server, Microsoft 365 ensures that users always have access to the latest version. The platform is regularly updated by Microsoft.

With various all-in-one subscription options that include access to Microsoft cloud services, Microsoft Office, and Windows 10, Microsoft 365 is set to become the go-to license for most organizations.

Why Do Businesses Choose Microsoft 365?

As a cloud-based subscription service, Microsoft 365 automatically updates its software and services whenever a new version is released. This ensures that you always have access to the latest features and functionality. Updates are frequent, eliminating the wait for the traditional three-year update cycle that Microsoft was previously known for.

Since the services are provided in the cloud, organizations don’t need to install server software or maintain any hardware. This simplifies IT management as product updates, patches, and new releases are issued automatically. Moreover, it is budget-friendly for the finance department.

A joint study by Microsoft and Forrester Consulting revealed a 154 percent ROI for small to mid-sized companies that switched to Microsoft 365 in just over 5 months.

Microsoft 365 also includes email hosting and cloud storage space, allowing users to save their documents to the cloud and access them anytime, anywhere, from any device. It offers secure access to content, conversations, tasks, and schedules.

Productivity tools facilitate knowledge sharing, effective communication, and increased efficiency within teams. Microsoft 365 brings a whole new level of intelligence to the table.

microsoft-365-logo microsoft-365-app-logos-teams-sharepoint-yammer

All the apps and services within Microsoft 365 are interconnected, enhancing teamwork and enabling employees to work better and faster together. Features like team chat, group emails, online meetings, and file co-authoring and sharing foster collaboration.

READ  Azure Virtual Desktop: A Comprehensive Guide

Improved collaboration and communication are essential for productivity, and Microsoft 365 significantly reduces time spent on administrative tasks for management, users, and IT. This allows everyone to focus on innovation and drive their business forward.

The Pros of Microsoft 365

There are numerous advantages to using Microsoft 365, including:

  • Improved collaboration and communication
  • Greater productivity
  • Anywhere access
  • IT control and efficiency
  • Automatic upgrades
  • Enhanced user desktop functionality while alleviating IT burdens

Microsoft 365 empowers employees and contributes to a more efficient and productive work environment.

The Cons of Microsoft 365

To use Microsoft 365 effectively, a stable internet connection is necessary. Without an internet connection, work cannot be done.

Additionally, some organizations may need to invest in costly system upgrades if their critical systems are not compatible with Microsoft 365. Data privacy can also be a concern for some, as they may be hesitant to entrust all their confidential data to Microsoft. However, there are workarounds and measures that can be taken to retain some data on-site to maintain comfort levels.

One common challenge with Microsoft 365 in businesses is governance. Many organizations struggle with issues like uncontrolled growth, stale content, compliance, and complex provisioning of Microsoft Teams, Office 365 Groups, and SharePoint. However, there are solutions available to regain control, consistency, and peace of mind within Microsoft 365.

If you’re looking to bring back control to administrators, self-service capabilities to users, and peace of mind to management, we can help. Get in touch to find out how we can assist you with Microsoft 365 governance.

Related Posts