Microsoft Office 2016 vs. Office 365 vs. Microsoft 365 vs. Office Online

If you read the title of this article and thought, “wait – aren’t those all the same thing,” you’re not alone.

Confusing as it is, Microsoft has created 4 different product lines with extremely similar names. Each software is good for its own scenarios, but figuring out which is best for your business can be a challenge. And to cloud the situation even further, each product also has different bundles, features, and services.

Let’s take a closer look at how each option compares to the other.

This is likely the most familiar option. Office 2016 is the latest version of the Microsoft Office Suite.

There are several different tiers, all of which include Word, Excel, PowerPoint, and OneNote. The Professional version (most common for businesses) also includes Outlook, Publisher, and Access.

And what’s really cool is that, for the first time ever, both Windows and Mac OS are in sync with their Office version. Historically, Office for Mac was an entirely separate product and didn’t follow the same version updates, but now, Mac and PC users are on the same page. (Except Microsoft Access and Publisher, which are only available for PCs).

This is a one-time purchase for one computer. The benefit to this is that you don’t have to pay a subscription fee each month. The disadvantage is that you’ll have to buy Office again when a new version comes out if you want to stay current. Another disadvantage is that you only get to install it on one computer (The subscription version, Office 365, gives you the ability to install it on multiple computers, laptops, and mobile devices).

You’ll still get security updates for as long as the product is supported by Microsoft, but you won’t get any new feature updates. The software will remain the same from the day you buy it to the day you stop using it.

If you’re a wondering why you would purchase the Professional version instead of the Home version for your business, there are a couple reasons. For one, you get more features and additional software that many businesses need (i.e. Outlook). But the MAJOR reason why is because Microsoft’s licensing agreement stipulates that Home and Student versions can’t be used for commercial or revenue-generating activities.

So, to recap, Office Professional 2016 is a single-user license for Word, Excel, PowerPoint, OneNote, Outlook, Publisher and Access. You’ll get security updates, but no new features.

Office 365

Say hello to Microsoft’s flagship Cloud service. It’s simple and cost effective, which is why it’s so popular with small and midsized businesses. The beauty of most Office 365 for business plans is that you get business-class email for up to 300 users. Enterprise plans are available for larger organizations.

There are 3 Office 365 plans available for small and midsize businesses: Business Essentials, Business, and Business Premium. All plans are subscription-based, so you’ll get ongoing security and feature updates.

Another major plus is that one license covers up to 5 devices, so you won’t have to buy additional licenses if your users want to have Office on their desktop, laptop, tablet, and phone, for example.

Here are the main differences between plans:

Office 365 Business Essentials

Priced the lowest at $5.00 user/month with annual commitment, this plan includes: business-class email hosting with 50 GB mailbox and custom email domain address, Exchange, SharePoint, OneDrive, Skype for Business, Microsoft Teams, and Yammer. Web versions of certain Office applications (Outlook, Word, Excel, and PowerPoint) are included, but it does NOT include desktop Office applications.

Best if you need business-class email and cloud services, but not desktop Office.

Office 365 Business

Priced in the middle at $8.25 user/month with annual commitment, this plan includes: desktop versions of Office applications (Outlook, Word, Excel, PowerPoint, OneNote, and Access), web versions of Word, Excel, and PowerPoint, and OneDrive cloud storage. It does NOT include business-class email hosting.

Best if you need desktop Office and OneDrive, but not business-class email or other cloud services.

Office 365 Business Premium

Priced the highest at $12.50 user/month with annual commitment, this plan is the best of both worlds.

It includes: Desktop versions of Office applications (Outlook, Word, Excel, PowerPoint, OneNote, and Access), plus web versions of Word, Excel, and PowerPoint. It also includes business-class email hosting with 50 GB mailbox and custom email domain address, Exchange, SharePoint, OneDrive, Skype for Business, Microsoft Teams, and Yammer. Plus, web versions of certain Office applications (Outlook, Word, Excel, and PowerPoint).

Best if you need desktop Office, business-class email, and cloud services.

Microsoft 365

Take everything you just learned about Office 365, add Windows 10 Pro and mobility, plus security solutions and you’ve figured out Microsoft 365.

Microsoft 365 was announced in July, so there’s not much information about it yet. But here’s what we know:

With Microsoft 365, you get everything in Office 365 Business Premium, plus device management and security features. These two extra features are likely items your IT department will be excited about, but they won’t make much difference to end users. They give your IT team the ability to centrally manage users and devices from a single console. This will make it faster for them to set up new computers and roll out Office applications.

Office Online

Formally known as Office Web Apps Server, anyone with a Microsoft account can use Office Online.

This free version of Office is stripped down and only includes web versions of Word, Excel, PowerPoint and OneNote. Office Online doesn’t have all of the features of Office 2016, and consequently might not be able to open more complex documents.

However, it’s good for everyday documents or editing. It automatically saves your documents, so you won’t lose anything if WiFi connection is lost.

Where Office Online gets tricky for businesses is email. The only email available with Office Online is a free Outlook account. The only way that Office Online will work business email is if you your company has an Exchange server, in-house or hosted elsewhere. Otherwise, you won’t have an overarching admin account to regulate emails, sync calendars, and share information with ease.

For some businesses, the limited web versions of these programs will be sufficient. However, most business users will find their needs to be in line with the full-featured applications in Office 365 or Office 2016.

Now, armed with a little more information, picking the right Microsoft application package comes down to the price and features your business needs. Each option is designed for different scenarios, so drill down on the options that make sense for how your business operates and what your goals are. Work with your IT department, or outsourced IT support provider, to see where you are now and evaluate your options for the future.

IT Untangled

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Related: Business Email: Microsoft Office 365 vs. Google G Suite