Microsoft 365 vs Office 365: What Is the Actual Difference?
The naming confusion explained. Learn which plan is right for your business, what apps each includes, and how much you should pay in 2026.
Every week, someone asks us: "Is Microsoft 365 the same thing as Office 365?" The short answer is yes — but with important differences. Microsoft 365 is the evolved, rebranded version of Office 365 that includes additional security, device management, and AI tools. Understanding exactly what changed matters, especially when you are choosing a plan for your business.
In this guide, we break down the differences in plain English, compare every business plan side-by-side, and help you pick the right option — whether you are a solo freelancer or a 500-person enterprise.
Quick Answer
Microsoft 365 is the new name for Office 365. They include the same core apps (Word, Excel, Outlook, Teams, OneDrive). The difference is that Microsoft 365 plans add advanced security (Defender), device management (Intune), and AI Copilot features. Office 365 plans still exist as legacy Enterprise options but lack these extras.
If you are a small business, the only name you need to know is Microsoft 365 Business Basic, Standard, or Premium. The Office 365 branding for small business has been retired.
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Microsoft 365 vs Office 365: Side-by-Side Comparison
| Feature | Office 365 | Microsoft 365 |
|---|---|---|
| Core Apps | Word, Excel, PowerPoint, Outlook, OneDrive, Teams | Word, Excel, PowerPoint, Outlook, OneDrive, Teams |
| Desktop Apps | Yes (on Standard+ plans) | Yes (on Standard+ plans) |
| Cloud Storage | 1TB OneDrive per user | 1TB OneDrive per user |
| Email Hosting | Exchange Online | Exchange Online |
| Security (Defender) | Not included | Included (Business Premium+) |
| Device Management (Intune) | Not included | Included (Business Premium+) |
| Azure AD Plan 1 | Not included | Included (Business Premium+) |
| AI Copilot | Separate add-on only | Included in some plans |
| Windows 365 Cloud PC | Not available | Integration available |
| Current Pricing (2026) | $6–$57/user/month | $6–$57/user/month |
Note: The core apps are identical. The difference is entirely in the security, management, and AI extras bundled with Microsoft 365 plans.
Every Microsoft 365 Business Plan Explained (2026 Pricing)
Microsoft 365 Business Basic
Web apps + email + cloud storage
Outlook web, Word web, Excel web
1TB OneDrive storage
Teams (chat, video, 300 participants)
Exchange Online (50GB mailbox)
No desktop Office apps
No Defender security
No Intune device management
No Azure AD Plan 1
Best for: Teams that work entirely in a browser and do not need desktop Office apps.
Microsoft 365 Business Standard
Desktop apps + email + cloud storage + booking
Everything in Basic
Desktop Office apps (PC/Mac)
Microsoft Bookings
Webinar hosting (1,000 attendees)
No Defender security
No Intune device management
No Azure AD Plan 1
No advanced DLP
Best for: Most small and medium businesses. Desktop Office apps are essential for serious document work.
Microsoft 365 Business Premium
Everything + security + device management + AI
Everything in Standard
Microsoft Defender for Business
Intune device management
Azure AD Plan 1
Advanced data loss prevention (DLP)
Conditional access policies
Attack simulation training
Windows 365 integration
Copilot ready (add-on)
Best for: Businesses handling sensitive data, regulated industries, or organizations with BYOD policies.
Microsoft 365 Subscription vs Office 2024 One-Time Purchase
Microsoft 365 (Subscription)
- Always the latest version of Word, Excel, PowerPoint
- 1TB OneDrive cloud storage included
- Outlook with Exchange Online email hosting
- Microsoft Teams for collaboration
- Install on up to 5 devices per user
- AI Copilot features (in select plans)
- New features added continuously
Cost: $6–$22/user/month
$72–$264 per user per year
Office 2024 (One-Time Purchase)
- Word, Excel, PowerPoint, Outlook (desktop only)
- One-time payment, no recurring bills
- Install on 1 PC or Mac
- No cloud storage
- No Teams, no web apps
- No new features after purchase
- No AI Copilot
Cost: $149–$439 one-time
Home & Student vs Professional editions
Bottom Line
If you are a business with 3 or more people, Microsoft 365 is almost always cheaper and more capable than buying Office 2024 licenses. The subscription includes cloud storage, email, Teams, and continuous updates that a one-time purchase cannot match. Only choose Office 2024 if you are a home user with 1–2 computers and no need for cloud collaboration.
Which Plan Should You Choose? Decision Guide
Solo freelancer or 1–2 person team
Microsoft 365 Business Basic ($6) or Office 2024 ($149)
If you work in a browser, Basic is perfect. If you rarely collaborate, Office 2024 might be simpler.
Small business (3–25 users)
Microsoft 365 Business Standard ($12.50)
Desktop Office apps are essential for professional document work. Teams and 1TB storage add massive value.
Growing business with remote workers
Microsoft 365 Business Premium ($22)
Device management and Defender protect laptops your team uses from home. Intune ensures compliance.
Healthcare, finance, or legal
Microsoft 365 Business Premium or E3 ($36)
DLP, conditional access, and audit logging are required for HIPAA, SOX, and GDPR compliance.
Enterprise (250+ users)
Microsoft 365 E3 or E5 ($36–$57)
Advanced threat protection, analytics, and governance tools built for large-scale IT management.
Nonprofit or education
Microsoft 365 Nonprofit or Education (free to $3)
Microsoft offers deeply discounted or free licenses for eligible nonprofits and schools.
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Frequently Asked Questions: Microsoft 365 vs Office 365
QIs Microsoft 365 the same as Office 365?
QWhat apps come with Microsoft 365 that Office 365 does not have?
QShould I buy Office 2024 or subscribe to Microsoft 365?
QHow much does Microsoft 365 cost for business in 2026?
QCan I still buy Office 365 instead of Microsoft 365?
QDo Microsoft 365 and Office 365 use the same apps?
Setting Up Microsoft 365 for the First Time?
We handle Microsoft 365 tenant setup, domain verification, email migration, Teams configuration, and security hardening — so your team is productive from day one.