Microsoft Office may be the most common productivity tool for corporate users, but it's not a one-size-fits-all suite. Here are the differences between Office 2021 and Microsoft 365 and how to decide which is best for you.
By Gregg Keizer and Christina Wood
- Microsoft Office: The options
- How you pay for Office
- How each version of Office is serviced
- How Office hooks up with cloud services
Microsoft Office is how billions of people around the world go to work and school, whether they do it from home, an office, a classroom, or a combination of any of those. This suite of productivity tools is used by people working in 106 languages in nearly every country in the world, and it’s available in versions for personal, small business, enterprise, and educational use.
But there is more than one way to buy Office — or, rather, to buy the license to use it. There’s the “perpetual” version of Office that’s available as a one-time purchase; the most current version is Office 2021. Then there’s the subscription version that lives in the cloud and for which you pay a monthly or annual fee. When this version was introduced in 2011, Microsoft called it Office 365, later renaming it Microsoft 365 for personal and small business subscriptions. At the enterprise level, both Office 365 and Microsoft 365 plans are available. In this story, we’ll use “Microsoft 365” as shorthand for all “365” subscriptions unless we’re referring to a specific plan.
Why choose to buy it one way and not the other? The answer can be confusing, especially since each suite of tools includes most of the same applications, give or take.
Microsoft has made its preference clear: The company believes that “the cloud will power the work of the future” and would love it if everyone purchased Microsoft 365. There are lots of incentives for doing just that. But you have options.
Here’s help deciding which version is right for you or your company.
Microsoft Office: The options
How you pay for Office
One big difference between the “2021” and “365” options is how you pay for them. If you are buying a “perpetual license” (such as with Office Home & Business 2021 or Office LTSC 2021), you pay a larger sum than with the subscription’s offerings under the Microsoft 365 or Office 365 brand, but you do so only once. When you subscribe to any of the Microsoft 365 or Office 365 plans, you pay annually or monthly.
Office 2021: a perpetual license
Whether you buy a single copy of Office 2021 in a retail outlet or download hundreds of seats via volume licensing, Microsoft calls this is a "one-time purchase" because you pay only once, not every month. (Labels like “perpetual,” which have been widely used byComputerworld, technically note the type of license rather than payment methodology, but in this case, the kind of license is tied to whether it was bought outright or simply “rented.”)
Microsoft defines the term as when “...you pay a single, up-front cost to get Office applications for one computer.” Up-front is the key adjective there. You have to ante up the entire purchase price before you get the software.
That purchase of a license to legally run the software gives you the right to use that version of Office 2021 in perpetuity. In other words, the license has no expiration date, and users may run the suite for as long as they want. Pay for Office 2021 this year and use it for the next seven years? Fine. Use it to operate your space portal in the year 2050? Nothing to stop you. (Except hardware compatibility. Though you could probably find an old, refurbished computer and drag that into space.)
But if you want new features that come out with the next update, you will have to pay full price again, whatever that is, when the next version comes out — if one comes out. There are no upgrade options on the perpetual license packages.
Microsoft 365: Office as a service
Microsoft 365, the purchase method Microsoft would prefer you choose, is a subscription service, where you pay the software giant monthly or annually. There is a discount, sometimes a tempting one, for going with the annual payment plan over the monthly one. (All enterprise plans, from Enterprise E1 to E5, require an annual commitment.) And the company is always sweetening this pot by offering more apps than you get with the perpetual license products and with a continuous supply of new features.
Like any subscription, Microsoft 365 provides a service — in this case, the right to run the suite's applications and access the associated services — only as long as payments continue. Stop paying, and rights to run the apps expire. This happens in a progressive way, giving you time to download your data or update your payment plan, whichever you choose.
For 30 days after non-payment, your plan will be “Expired.” You will still have access to all your apps and files. If you don’t activate it again while it’s in the Expired stage, it moves to “Disabled,” where it will stay for 90 days. You won’t be able to access your apps or data until you pay up. If you still don’t pay for your plan, it will be “Deleted.” At that point, it’s gone.
A Microsoft 365 license, then, is contingent on sustained payments. Halt the latter, and the license is revoked. Restart the payments — but don’t wait too long — to restore the license.
How each version of Office is serviced
Although payments define one difference between Office 2021 and Microsoft 365, Microsoft’s development and release pace is ultimately more important to users — and the IT professionals who support them.
Think of Office 2021 as traditional software — a bundle of tools that typically don’t change much until the next major version. That holds for servicing, too. Microsoft does release monthly security and quality updates for the perpetual license versions of Office. (You can check from within any Office app if there are updates available. From, say, a Word document, go to File > Account and look for Product Information. Then choose Update Options and Update Now.)
But Office 2021 doesn’t get the continually upgraded features and functionality that Microsoft 365 does. What you get when you buy the suite, feature-wise, is it. If you want the updates, at some point in the future, you will have to buy whatever version Microsoft is selling as a perpetual license then.
(The company says of the release of Office LTSC 2021, “While this will not be our last perpetual release, we continue to make investments that make it even easier for customers to adopt Microsoft 365.” And in an online explainer about all Office products, the company says, “We are happy to confirm our commitment to another release of the perpetual version of Office in the future, beyond this release.”)
Microsoft regularly releases feature and security updates for Microsoft 365 apps, though. And it releases them as they happen. As new features and functionality accrete, and the applications in Microsoft 365 evolve, Microsoft will decide it’s time for a new version of Office. It will then package some of those features into an upgraded suite for customers who continue to make one-time, up-front purchases. How long they keep doing this likely depends on how long there is a demand for these “locked in time” versions.
One other important note: Office 2021 and Office LTSC 2021 will be supported with security updates only through Oct. 13, 2026. That’s just five years of support, down from seven years in Office 2019 and 10 years in prior releases. In contrast, with Microsoft 365 subscriptions, support never runs out — as long as you keep paying, of course.
How Office hooks up with cloud services
One reason to choose Office 2021 over Microsoft 365 is internet access. If you don’t have reliable access to the cloud, can’t be connected to the internet for security reasons, or — for whatever reason, maybe you live on a remote mountaintop — your computer is often offline, this is the type of software you need.
In fact, internet access is one of the main reasons Microsoft can’t force us all to subscribe to Microsoft 365. Microsoft 365 runs in apps that are downloaded to your computer, phone, or tablet, but those apps require near-constant internet access, especially if you use OneDrive and store all your files in the cloud.
In standard use, Microsoft 365 stops working if it can’t connect to the internet for 30 days. For some use cases, this is a deal breaker. But the company is making efforts to overcome this objection to the Microsoft 365 products. Last year, Microsoft launched features for enterprise users that allow Microsoft 365 keep working without issue even if it is offline for extended periods of time. An IT administrator has to set it up, but after that, a user can keep working, offline, for up to 180 days.
Office 2021, on the other hand, does not rely as heavily on an internet connection to operate, save files, and self-update. You can connect it when you have access and work offline when you don’t. This, as much as cost and a desire to stick to old-school software distribution models is, perhaps, the most compelling reason to insist on one of the perpetual license products.
Whichever license you ultimately choose, you will get many of the same tools. And the reasons for making one choice over another have less to do with price and features than with how you or your users work, support and security needs, reliability of internet access, online storage and collaboration needs, and how excited (or annoyed) you or your users are likely to be by new features that turn up, like a gift, in the software.
This article was originally published in July 2017 and most recently updated in June 2022.
- Microsoft Office
- Microsoft 365
- Office Suites
- Productivity Software
Copyright © 2022 IDG Communications, Inc.
Bing’s AI chatbot came to work for me. I had to fire it.
What is the most basic difference between Microsoft 365 and Office 2021? ›
The biggest difference between MS Office 2021 and MS Office apps in Office 365 is that Office 365 is a subscription service, while Office 2021 is a one-time purchase. This means that with Office 365, you always have the latest version of the software and access to online storage and collaboration features.Is Microsoft 365 the same as Office 2021? ›
While both Office 2021 and Microsoft 365 include traditional productivity applications like Word, Excel, and PowerPoint, there are differences between the two versions. Licensing: The most apparent difference between the two products is the licensing model and how users pay for each product.What is the difference between normal Microsoft Office and Office 365? ›
Microsoft 365 includes the robust Office desktop apps that you're familiar with, like Word, PowerPoint, and Excel. You also get extra online storage and cloud-connected features that let you collaborate on files in real time.Can you remove Office 2021 and use Office 365? ›
Microsoft Office should be completely gone from Windows 10, and now you can move on or reinstall Office 365 from your Office online account or manually use the standalone installation for Office 2021. You cannot uninstall individual apps anymore, such as Word or Excel, using Microsoft 365 (Office 365).What are the disadvantages of Office 365? ›
- Subscriptions aren't for everyone. You don't have to pay out one-time costs, but you do have to pay every month. ...
- Compatibility issues with bespoke systems. ...
- Constant updates mean constant changes. ...
- Most people only use 20% of the functionality. ...
- You don't actually own the software.
If you've used recent versions of the suite, you'll find the 2021 version to be a comfortingly familiar experience, with a low learning curve. Once you upgrade, you can get back to work quickly, yet you'll also find enough new touches for it to be worth the money.What are two advantages of Office 365 over traditional Office? ›
- You can work from anywhere. ...
- It has important features for collaboration. ...
- Provides access to the latest versions of Office apps. ...
- Enhanced security features. ...
- Work with what you know.
Ultimately, the decision comes down to the apps and services you need to complete the work. If you plan to use Office for years to come, Microsoft 365 is hands-down your best option. The reason is that with the subscription, you will get full access to the apps and benefits at a low cost of ownership.Why it is better to use Office 365? ›
Microsoft 365 is a subscription service in which you get Office applications that are updated automatically when a new version is available + 1TB cloud storage + more. You'll get all the latest features and updates, as well as security updates and bug fixes with no extra cost.Do people still use Office 365? ›
Office 365 is used by over a million companies worldwide, with 145,844 customers in the United States alone using the office suite software. Office 365 is the brand name used by Microsoft for a group of software applications providing productivity related services to its subscribers.
Can I still use Word without Office 365? ›
The good news is if you don't need the full suite of Microsoft 365 tools, you can access a number of its apps online for free, including Word, Excel, PowerPoint, OneDrive, Outlook, Calendar, My Content, Skype, Designer and Clipchamp.How long can I use Office 2021? ›
One other important note: Office 2021 and Office LTSC 2021 will be supported with security updates only through Oct. 13, 2026. That's just five years of support, down from seven years in Office 2019 and 10 years in prior releases.What are the benefits of Office 2021? ›
In Office 2021, you'll find new co-authoring features, inking tools, data types, functions, translation and editing tools, motion graphics, ease-of-use features, and so much more! Check out what's available to you today.Do I need to uninstall Microsoft 365 before installing Office 2021? ›
Before you can install Office, you'll need to remove Microsoft 365.Does Office 2021 include Outlook? ›
Office Home and Business 2021 is for families and small businesses who want classic Office apps and email. It includes Word, Excel, PowerPoint, and Outlook for Windows 11 and Windows 10. A one-time purchase installed on 1 PC or Mac for use at home or work.What 2 things can Office 365 be used for? ›
- The latest productivity apps, such as Microsoft Teams, Word, Excel, PowerPoint, Outlook, OneDrive, and so much more.
- The ability to install on PCs, Macs, tablets, and phones.
- 1 TB of OneDrive cloud storage.
- Feature updates and upgrades not available anywhere else.
When using Office 365 online applications in a web browser and working with files in the cloud, a slow internet connection with high latency causes lags and delays. These Office 365 issues are inconvenient when you want to open a document or write changes to it, and can considerably slow down operations.Do you have to uninstall Office 365 before installing Office 2021? ›
Before you can install Office, you'll need to remove Microsoft 365.What is the most basic version of Microsoft Office? ›
- Home & Student for PC/MAC: Includes core applications only.
- Home & Business for PC/MAC: Includes core applications plus Outlook.
- Professional: Includes core applications plus Outlook, Publisher and Access.
Office Home and Business 2021 is for families and small businesses who want classic Office apps and email. It includes Word, Excel, PowerPoint, and Outlook for Windows 11 and Windows 10. A one-time purchase installed on 1 PC or Mac for use at home or work.
What are two advantages of Office 365 compared to the traditional Office? ›
Enhanced security features
Major security features on Office 365, but missing on your regular desktop Office include: Data loss prevention. Email encryption. Advanced threat analysis.
You can install Microsoft Office for free on up to 15 devices in total (five installations on Windows and MAC devices, five installations on smart phones and five on tablet devices).Will I lose documents if I download Office 365? ›
Microsoft's straightforward answer is no, "There will be no impact on your account, profile, subscription or files.Will I lose my files if I uninstall Office 365? ›
Tip: Uninstalling Microsoft 365 only removes the Microsoft 365 applications from your computer, it doesn't remove any files, documents, or workbooks you created using the apps.What happens when Office 365 expires? ›
Admins and users no longer have access to the services or Office applications that came with the subscription. All customer data—from user data to documents and email—is permanently deleted and is unrecoverable. At this point, you can't reactivate the subscription.Is it necessary to buy Microsoft 365? ›
However, you will need a qualifying Microsoft 365 subscription if: Your mobile device is larger than 10.1”. You are creating, editing, and saving files to online business storage services such as: Google Drive, Box, and other business storage.Do you have to renew Microsoft Office every year? ›
That purchase of a license to legally run the software gives you the right to use that version of Office 2021 in perpetuity. In other words, the license has no expiration date, and users may run the suite for as long as they want.