Microsoft 365 – previously called Office 365 – is a subscription service providing access to Microsoft’s office applications and OneDrive cloud storage. Several subscription packages are offered, each with different combinations of software and services.

What’s included in Microsoft 365?

There are four Microsoft 365 subscription tiers aimed at businesses. The cheapest is Business Basic: this comes with 1TB of OneDrive storage per user, plus access to the web and mobile editions of the core office applications. Desktop software isn’t included, but users can host and join meetings in the Microsoft Teams application.

The next tier is Apps for Business. This adds access to the core desktop applications, although users are limited to free features in Teams.

Beyond this, the Business Standard and Business Premium tiers include all applications, plus the full set of capabilities in Teams. Additional management features in the Premium package can be used to enforce data-protection, security and usage policies.

For individuals, a Microsoft 365 Personal subscription provides the core Office applications and 1TB of OneDrive storage, while a Family subscription extends the deal to a maximum of six people.

Does Microsoft 365 include Windows?

For enterprise customers, Microsoft offers a monthly Microsoft 365 subscription that covers both Windows and the office applications. However, the packages available to individuals and SMBs don’t include Windows: that must be licensed separately.

Does Microsoft 365 replace Microsoft Office?

Microsoft Office is still available in two editions, namely Office 2021 Home & Student and Office 2021 Home & Business. However, these will be the last Office packages that can be bought outright. After support expires in 2026, a Microsoft 365 subscription will be the only way to access Microsoft’s office applications.

What are the advantages of Microsoft 365?

Rather than paying a lump sum for a limited number of Office licences, Microsoft 365 allows companies to budget a modest monthly cost for each user, and easily add or remove licences at any time to suit their needs.

Microsoft 365 is also convenient for remote or hybrid working, as users can work from anywhere, and access their data via OneDrive. The web-based Office apps enable teams to collaborate in real-time on documents and spreadsheets.

And subscribers get continual access to software updates and telephone support; by contrast, the Office 2021 suite doesn’t receive new features and only includes support via live chat.

What are the disadvantages of Microsoft 365?

The online apps and storage included in Microsoft 365 require an internet connection. An outage could leave users unable to work.

Customers also lose access to their applications and cloud data if the subscription isn’t maintained, creating potential challenges for business continuity and long-term archival. However, documents created in Microsoft applications can still be opened by third-party office software.

What are the alternatives?

The major competitor to Microsoft 365 is Google Workspace – a similar subscription service which includes a suite of office applications and cloud storage. However, Workspace is focused more on online working, and relies on cloud-based productivity tools such as Google Docs and Sheets: there are no desktop versions of Google’s applications.


  • Microsoft 365 provides access to Microsoft’s office applications and OneDrive cloud storage on a subscription basis. 
  • Various packages offer a choice of desktop applications and management features. 
  • Microsoft 365 requires an internet connection to make use of cloud features, plus an ongoing subscription. 
  • The traditional Office 2021 suite is still available for purchase, but is due to be retired in 2026. 
Avatar photo
Darien Graham-Smith

Darien is one of the UK's most knowledgeable technical journalists. You will find him in PC Pro magazine, writing reviews for a variety of sites and on guitar with his band The Red Queens. His explainer articles help TechFinitive's audience understand how technology works.