What is Office 365: 3 Things You Need to Know

If there’s a single suite of apps that users need on nearly every device with screen and a keyboard, it’s Office, Microsoft’s suite of productivity applications. For two decades Microsoft Office has been how people around the world get work done. Companies and small businesses around the world don’t just use it. Many of their employees live in its Outlook email and calendar tool. Word, Excel and PowerPoint are the apps that millions of students and teachers rely on for creating presentations, writing papers and more.

Sometime ago Microsoft found itself at a crossroads. At a time when more and more users were less willing to make pricey one-time software purchases, how could Microsoft still get Office into the hands of those who needed it? It answered this with a three-pronged strategy. The first part of this strategy was to compete head to head with Google Docs by making certain parts of Office absolutely free online. The second part of its strategy required Microsoft to continue offering  Office in the ways it had before, with one-time purchases of different versions and single Office apps.

Which Office Is best For Your Needs

Read: Which Version of Microsoft Office is Best For Your Needs?

It’s the third part of its approach that has gotten Microsoft the most credit with small businesses and users who’d become fed up with paying around $139.99 for Microsoft Office Home & Student. Launched just two years ago, Microsoft’s Office 365 has done to productivity apps what Spotify and Zune did to music.


Yes, You’re Renting Microsoft Office

Office 365

When I compare Office 365 to Spotify, the subscription music service, I’m not kidding. Seriously, the business model and benefits for subscribers are almost identical.

Instead of paying for Office up front, Office 365 allows users to pay $9.99 a month, or $99 a year, to rent Office. The idea of Office 365 is to make buying a legitimate copy of Office reasonable for everyone. Remember, retailers and PC makers used slap Windows buyers with the hidden cost of Office right before check out. The added cost of Office was always a problem for the Windows ecosystem, especially since many normal users just assumed that every Windows PC included it by default.

Like renting subscription music or an apartment, when you stop paying for Office 365, the apps stop working. You’ll still be able to open those documents and create new ones in the free Office Online web app, but that is all you can do until you subscribe to the service again.

No, You Don’t Have to Pay For Multiple Accounts

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There used to be a time when Microsoft forced users to purchase separate copies of Office for each PC. The idea was that Office, like most pieces of software at the time, was single use only. Users could transfer that copy of Office to another PC, but they weren’t supposed to use the same copy of Office on multiple PCs. Clearly, charging users $139.99 for multiple copies of Office wasn’t the most consumer friendly thing Microsoft had ever come up with.

And thankfully, that’s a thing of the past with Office 365 — provided that you purchase the right subscription.

Included in the base price of Office 365 Home are desktop versions of Word, Excel, PowerPoint, Outlook, OneNote, Publisher and Access. Paying $9.99 grants Office 365 subscribers the ability to load these desktop Office apps on up to 5 PCs and Macs. That way users are able to load the apps on multiple devices without having to break the bank.

For the single users out there, Microsoft just introduced a new version of Office 365 that makes it even cheaper for them to subscribe. Office 365 Personal users get all the benefits of having an Office 365 subscription, except they pay only $6.99 a month. Office 365 Personal users only get to install Office 365 Desktop apps on a single machine instead of five.

It Comes With Extras

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Office 365 is a great deal because it brings one of the most regularly used and relatively expensive software suite to everyone. That alone would be great. After all, making something more affordable and approachable is a surefire way to get more users interested. But Microsoft also throws in some pretty nifty extras for Office 365 users.

For starters, Office 365 subscribers get more cloud storage. Home users get 5 OneDrive codes to redeem 20GB of storage for each user on their account. Personal users get 20GB of extra OneDrive storage on their account. It might sound minor, but Office 365 incorporates cloud storage so that users can access their documents on their smartphone, tablet or the web. Having more storage to do that is a win, especially since that storage can be used to backup photos and anything else on your PC and smartphone too.

Speaking of smartphones and tablets, more recently, Microsoft has introduced versions of Office for the iPhone and devices running the Android operating system. An Office365 subscription is required to access these mobile versions of Office, including the one Microsoft just released for the iPad.  That’s why that extra OneDrive cloud storage is so crucial.

Somewhat strangely, Microsoft also throws in 60 minutes of monthly Skype calls with Office 365. It’s a bit random, but that time allows Office 365 subscribers to place calls to land lines phones for free, so it’s much appreciated. I should note that this Skype credit can be used on mobile phones and tablets too.

It used to be that purchasing Microsoft Office wasn’t just expensive, but repeatedly expensive. Microsoft traditionally released a new version of Office every three years or so. Newer updates would add more features and include more must-haves that modern PC users needed. Because Microsoft also discontinued support for older versions of Office, users ended up in a somewhat vicious cycle. Staying with the same copy for Office could leave you without crucial new features and out-of-date with no support.

Office 365 addresses this issue too. Each Office 365 subscription comes with updates to Office. While today’s version is built on top of Office 2013, it regularly receives updates, and when Microsoft inevitably introduces a new version users will get it with their subscription as well.

No other product defines the new age of Microsoft than Office 365. It wholeheartedly addresses the concerns of real consumers and makes interacting with documents and presentations on mobile devices that much easier. All ready users are starting to embrace the service. Microsoft announced that it had roughly 3.5 million Office 365 subscribers just recently.

If you’re in need of Microsoft Office, exploring the free month-long free trial of Office 365 should definitely be on your to-do list.


  1. Travis – this is an excellent appraisal. Love it that you write in plain and simple terms to set expectations properly! Have you ever assessed the business offering from Microsoft?

    • Thanks for the kind words. So far, I haven’t really dabbled in the companies business offerings but that’s not a bad idea. Not a bad idea at all sir.

  2. To me, it appears that spending $99/year is a lot more expensive than spending $219 once every 3 to 4 years. I’ve never worked anywhere, where outdated versions of Office are upgraded as soon as newer versions are released. Usually, we upgrade when we replace a computer and not before.

  3. I am not sure what it is about this review of Office 365 which makes it an editorial. Paul’s comment is 100% on mark that it’s cheaper to buy software outright than pay a monthly fee for it FOREVERl. There is NOTHING about a service like Office 365 (or ANY software for which one pays a monthly amount as rental e.g. Evernote despite many users swearing by it). What I find most baffling is how buyers, sorry I mean renters, of Office 365 cannot see through what is so obvious in paying monthly for software THAT IT IS MORE EXPENSIVE. To me it shows A COMPLETE absence of the ability to objectively assess what a company is trying to sell you, in this case Microsoft. And Mr. Travis Hope who wrote this sales pitch disguised as an *editorial* either lacks the capacity to see that it’s more expensive to pay monthly for Office 365 or going by what he is saying in this *editorial* he is doing a sales job on behalf of Microsoft. BUYER BEWARE of paying monthly fee for ANY software let alone Office 365. In either case in my opinion he needs to re-think his blundering point-of-view and give his evaluation more objectively and also make a full disclosure of his affiliations. Unless he does so he is going to lead the reader question his objectivity or integrity.

    • I don’t disguise anything. I’m considering the real world ramifications of Microsoft’s pricing. Asking people to buy software at all is a big thing. Asking people to buy office at full for $100+ is even bigger. For some people, paying a month — for the months they will need it is far easier than $129. I don’t do sales pitches. I look at whats in front of me and make a common sense determination of what normal people need. This is a low cost solution for those who need it.

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