Microsoft 365 vs Office 365: Key Differences Explained

It is no secret that Microsoft provides one of the most popular productivity suites on the market today. More than one million companies, including 70% of Fortune 500 firms, rely on Office 365 to complete numerous day-to-day tasks within various departments of their organizations.

Even with this widespread popularity, confusion persists around the naming conventions for the online subscription plans for Microsoft 365 and Office 365. Simply put, Office 365 and all its collaborative tools represent just one part of Microsoft 365, which also includes the Windows operating system and Enterprise Mobility and Security (EMS).

This blog details the features and pricing of Microsoft 365 and Office 365 packages and highlights the key differences between the two products.

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What Is Office 365?

Office 365 is a cloud service platform that combines several productivity, collaboration and communication applications, including email and the Office suite. Users can subscribe to one of the available monthly plans to access these Microsoft products online or on-premises using a desktop, laptop, tablet and phone.

The main applications in Office 365 packages are:

  • Office suite: These are the known Microsoft productivity tools such as Word, Excel, PowerPoint and OneNote.
  • Outlook and Exchange Online: Business-class email with shared calendars to streamline communication within and beyond your organization.
  • OneDrive: Personal cloud storage that allows you to sync different versions of a document and share them with other users.
  • Teams: A communication and collaboration software that provides a virtual workspace in which you can share documents and conduct meetings with your coworkers.
  • Editor: An AI-powered writing assistant with a grammar and spell checker for Word and Outlook.
  • SharePoint Online: An intranet and web hosting tool for simplified file access and management.
  • Skype for Business: Another communication app with instant messaging and video conferencing.
  • Planner: An app that helps organize different tasks or projects and keep track of your team’s progress.
  • Yammer: An internal social media network allowing you to communicate with members of your company.

All of these applications are always up to date since new versions are automatically downloaded and installed once you have an active Office 365 subscription.

Office 365 Version Comparison

The current Office 365 plans are dedicated to enterprises looking to create and share documents across multiple devices and from different locations. Below are the available Office 365 packages:

Office 365 E1 Office 365 E3 Office 365 E5
Main Features
  • Web and mobile versions of Office apps
  • Business-class email using Outlook and Exchange
  • File storage and sharing with OneDrive
  • Meetings and instant messaging with Teams
  • Analytics using Viva Insights
  • All features in Office 365 E1
  • On-premises Office apps
  • Device and app management features
  • Azure Information Protection and encryption
  • Legal compliance with archiving and eDiscovery
  • All features in Office 365 E3
  • Advanced analytics using Power BI Pro
  • Advanced threat protection with Microsoft Defender for Office 365
  • Advanced information protection using Office 365 Cloud App Security
  • Office 365 Advanced Compliance
  • Audio conferencing
Subscription Type
  • Annual
  • Auto-renewal
  • Annual
  • Auto-renewal
  • Annual
  • Auto-renewal
Price $10 user/month $23 user/month $38 user/month

Microsoft also provides three Office 365 Government plans specifically designed for governmental institutions. These packages include all the features and capabilities of Office 365 services with advanced compliance and security features to help government entities meet regulatory requirements.

It is important to note that in 2020, most of Office 365 was unified with Microsoft 365 and all the plans were merged to create more comprehensive offerings. Read on to learn about the latest Microsoft subscriptions.

What Is Microsoft 365?

Microsoft 365 is an all-in-one bundle that merges Office 365, Windows OS and Enterprise Mobility and Security (EMS). It is a subscription-based offering that includes all the applications in the Office suite in addition to Microsoft’s flagship operating system and threat protection features.

Windows OS incorporates security tools like Windows Defender antivirus and BitLocker in addition to the new Microsoft Edge web browser and the digital assistant, Cortana. EMS is a collection of tools that combine identity, access and endpoint management with information protection and identity security.

The Microsoft 365 packages are arranged according to their intended users:

  • Home
  • Business
  • Enterprise
  • Education

The plans are designed to provide distinct sets of products for personal, educational and professional use. Business and Enterprise plans even offer identity management and device management tools such as Azure Active Directory, Azure Information Protection and Cloud App Security to help you safeguard your data and simplify control.

Microsoft 365 for Home

This package is designed for personal use and provides the needed tools to help you create high-quality essays, reports and presentations. There are two subscription types available:

Microsoft 365 Personal Microsoft 365 Family
Licensing The license is for 1 person only but can be used seamlessly across 5 devices. This plan can be purchased as a bundle for up to 6 people.
Storage 1 TB of OneDrive cloud storage 1 TB of OneDrive cloud storage for each user
Services Desktop and web versions of Office apps including: Word, Excel, PowerPoint, Outlook, Teams and Editor Same as Microsoft 365 Personal
Security Ransomware file recovery and email phishing detection Same as Microsoft 365 Personal
Cost $59.99/year or $5.99/month $79.99/year or $7.99/month

Microsoft 365 for Business

Small and medium businesses with up to 300 users can choose from three different tiers:

Microsoft 365 Apps for business Microsoft 365 Business Basic Microsoft 365 Business Standard Microsoft 365 Business Premium
Storage 1 TB of OneDrive cloud storage per user 1 TB of OneDrive cloud storage per user 1 TB of OneDrive cloud storage per user 1 TB of OneDrive cloud storage per user
  • Desktop, web and mobile versions of Office apps, including Word, Excel, PowerPoint and OneNote
  • Microsoft Access and Microsoft Publisher for PC
  • Web and mobile versions (desktop versions excluded) of Office apps
  • Outlook on the Web
All the features in Microsoft 365 Business Basic and Microsoft 365 Apps for business in one package Everything in Microsoft 365 Business Standard

+ Device management with Microsoft Intune, automatic deployment of Office apps and Windows updates

Communication Not available Meeting and collaboration tools such as Microsoft Teams and SharePoint Online + Webinars: Attendee registration pages, email confirmations and reporting for efficient webinar hosting Same as Microsoft 365 Business Standard
Email Only desktop version of Outlook is available Business-class email and calendar using Outlook on the web and Exchange Online with 50 GB mailbox storage Same as Microsoft 365 Business Basic + Exchange Online Archiving
Security and compliance Standard security Exchange Online Protection in addition to custom permissions and policies Same as Microsoft 365 Business Basic + Advanced threat protection features
Cost $8.25 user/month $6 user/month $12.50 user/month $22.00 user/month

Microsoft 365 for Enterprise

Large organizations that require robust data security, powerful device management and strict user control can pick one of the three plans below:

Microsoft 365 F3 Microsoft 365 E3 Microsoft 365 E5
Storage 2 GB of OneDrive cloud storage per user 5 TB of OneDrive cloud storage per user Same as Microsoft 365 E3
  • Web and mobile versions of Office apps
  • Business-class email and calendar using Outlook and Exchange
+ Desktop versions of Office apps Same as Microsoft 365 E3
Communication Meetings and voice capabilities using Microsoft Teams Same as Microsoft 365 F3 + Phone System and Audio Conferencing
Security and compliance
  • Microsoft Advanced Threat Analytics, device protection and Azure Information Protection P1
  • Manual retention labels, content search and basic audit
+ Microsoft Defender for Endpoint P1 and Data Loss Prevent for email and files

+ Core eDiscovery and litigation hold

  • Complete threat and information protection with all available Defender types and Azure Information Protection P2
  • Robust compliance with advanced eDiscovery and audit
Advanced analytics Not available Personal insights using Viva Insights + Power BI Pro
Cost $8 user/month $36 user/month $57 user/month

Microsoft 365 Education

Microsoft created plans specifically for educators and students to empower and streamline the learning process. Schools have three dedicated packages:

Microsoft 365 A1 Microsoft 365 A3 Microsoft 365 A5
  • Web version of the Office 365 package including Word, Excel and PowerPoint
  • Communication tools like Teams and Outlook for the web
  • Educational services such as OneNote Notebooks, Sway and Visio
  • Unlimited personal cloud storage
  • Cloud management using Microsoft Intune
All the features in Microsoft 365 A1

+ Desktop versions of Office 365 apps

+ Includes Publisher and Access on PC only

Everything in Microsoft 365 A3

+ Advanced analytics

Security and compliance Standard information protection + Security management tools + Best-in-class intelligent security management

+ Advanced compliance

Cost One-time purchase, free of charge. $2.50 user/month $6 user/month

Office 365 vs Microsoft 365: Comparison

While both products offer Office 365 packages, Microsoft 365 plans also include device management tools, advanced security features and the Windows operating system.

The table below highlights the differences between the business plans of these two offerings.

Feature Office 365 Microsoft 365
Office apps
File storage
Email and calendar
Instant messaging and chat
User and access management
Device management
Information protection
Windows OS
Windows Defender

Wrapping Up

Office 365 packages are designed to provide individual users and businesses with various productivity and collaboration applications. These tools are also found in Microsoft 365, but they are combined with Windows OS in addition to different security, management and compliance features.

Choosing either one of these offerings depends entirely on your needs. It is important that you pick the right plan to avoid paying additional costs for a solution that you might never use.

Remember that you must safeguard your data regardless of your Microsoft 365 plan. Modern data protection tools like NAKIVO Backup & Replication offer incremental backups and instant point-in-time restores for data stored on cloud productivity platforms.

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