What Really Is The Difference Between Office 365 and Microsoft 365?

Office 365 is a Software as a Service (SaaS) solution that combines traditional Microsoft Office desktop applications with a variety of cloud-based productivity services. Launched by Microsoft in June 2011, this subscription-based service provides access to essential office tools and services on both monthly and annual plans.

Office 365 offers core applications such as Word, Excel, PowerPoint, and Outlook—all familiar tools that businesses rely on daily. But beyond these, it also includes cloud services for file storage, secure communication, and collaboration. Tools like Planner, OneDrive, Exchange, SharePoint, Yammer, and Microsoft Teams allow teams to collaborate seamlessly and work more efficiently across different environments.

In April 2020, Microsoft officially rebranded Office 365 to Microsoft 365—but only for small and medium business SKUs. Previously, Microsoft 365 was an enhanced version of Office 365 that bundled additional features like Windows 10 desktop licenses, Intune device management, and other enterprise-focused services.

While the rebranding has affected only certain license types, it marked a shift towards unifying Microsoft’s productivity services under one umbrella. Today, Microsoft 365 integrates all the same powerful tools and applications as Office 365, but with the added value of Windows and device management solutions.

In essence, Microsoft 365 is the evolution of Office 365 into a more comprehensive platform, offering businesses a holistic suite of tools to manage their workforce, devices, and productivity services.

Let’s clarify the distinction between Microsoft Office (the traditional suite) and Microsoft 365:

• Microsoft Office (2013, 2016, 2019) is the standalone, one-time purchase version of the Microsoft Office suite. You buy it outright and install it on your computer, and while you have access to the software, you don’t receive updates unless you buy the latest version.
• Microsoft 365 (formerly Office 365) is a cloud-based subscription service that includes the latest version of Office apps (Word, Excel, PowerPoint) and a variety of cloud services, like email, storage, and collaboration tools. With Microsoft 365, updates are automatic, so you always have access to the newest features without additional purchases.

Microsoft 365 offers numerous advantages to businesses, especially those looking to streamline their operations and ensure seamless collaboration:

• Automatic Updates: Since Microsoft 365 is a cloud service, users always have access to the latest features and security patches without the need for manual installations or updates.
• Cloud-Based Services: With Microsoft 365, businesses no longer need to maintain on-premises servers or worry about software updates. All services are hosted in the cloud, allowing businesses to focus on what really matters: their operations.
• Anywhere Access: Employees can access Microsoft 365 tools and files from virtually any device, anywhere, provided they have an internet connection. This flexibility boosts collaboration, productivity, and accessibility.
• Cost-Effective: As a subscription-based service, Microsoft 365 eliminates the upfront costs of purchasing software licenses, hardware, and maintaining on-site servers. It is a budget-friendly solution that grows with your business.

According to a joint study commissioned by Microsoft and executed by Forrester Consulting, businesses that switched to Microsoft 365 saw a 154% return on investment (ROI) within just five months.

Some of the top benefits of using Microsoft 365 include:

• Improved collaboration and communication: Teams can chat, share documents, host online meetings, and co-author files—all in real time.
• Greater productivity: With powerful cloud apps like Teams, SharePoint, and OneDrive, teams can collaborate efficiently and access critical documents at any time.
• Anywhere access: Work from any device—smartphones, tablets, desktops—no matter where you are.
• IT control & efficiency: Simplified management of user permissions, data security, and device control.
• Automatic upgrades: Ensure that you’re always using the most up-to-date software and features.
• Empower employees: Microsoft 365 allows employees to collaborate and access resources from anywhere, improving overall efficiency and job satisfaction.

While Microsoft 365 is an incredible tool, there are some challenges to consider:

• Internet Dependency: Microsoft 365 is a cloud-based service, so you need a stable internet connection to access data and work efficiently. If your internet goes down, so does your ability to work.
• Compatibility Issues: Some older or specialized systems may not work seamlessly with Microsoft 365, requiring costly system upgrades before you can migrate to the platform.
• Data Privacy Concerns: Since your data is stored in the cloud, some organizations may have concerns about security and privacy, particularly when handling sensitive information. However, Microsoft provides options to store certain data on-premises to meet compliance and regulatory requirements.
• Governance Challenges: Many organizations struggle with Microsoft 365 governance, such as managing Teams sprawl, dealing with stale content, and ensuring compliance with data retention policies. Uncontrolled growth of Teams, Office 365 Groups, and SharePoint sites can become overwhelming for administrators.

At SnapOn Software, we help organizations implement Microsoft 365 governance solutions to bring control, consistency, and peace of mind back to their environment. Whether you’re looking to prevent Teams sprawl, preserve content for compliance, or simplify Microsoft 365 provisioning, we can help.

While Office 365 and Microsoft 365 share many similarities, Microsoft 365 is a more comprehensive and future-proof solution for businesses looking to fully embrace cloud-based productivity, collaboration, and device management. Microsoft 365 is steadily becoming the go-to solution for businesses of all sizes, and with automatic updates, cloud integration, and enhanced collaboration tools, it offers greater flexibility and control than ever before.

Whether you’re a small business or a large enterprise, Microsoft 365 offers scalable, cost-effective, and robust solutions to help your team work smarter and faster. If you’re ready to take full advantage of Microsoft 365’s capabilities, get in touch with us to start optimizing your Office 365 governance and enhance your Microsoft 365 experience.