What is Office 365? How does it differ from Microsoft Office 2016?

Office 365 is a subscription service that helps ensure you always have the latest updates from Microsoft. There are Office 365 packages for both home and personal use, as well as for small and medium businesses, large businesses, schools, and nonprofits.

All Office 365 suites for home and personal use include Office 2016 with full-featured Office applications you use, such as Word, PowerPoint, and Excel, add online storage, technical support for free and more. You can choose to pay your subscription on monthly or yearly basis and the Office 365 Home package can help you share your subscription with up to four family members.

Most Office 365 packages for businesses, schools, and nonprofits include applications that have been fully installed, but Microsoft also offers basic packages with online versions of Office, archiving file and email. You decide which package works best for you: Smaller Enterprise, Enterprise, School, or Nonprofit.

Office 2016 is also available as a one-time purchase, meaning you only need to pay a one-time start-up fee to download Office applications to a computer. One-time purchase packages are available for both PCs (such as Office Home & Student 2016) and Macs (such as Office Home & Student 2016 for Mac). Single-purchase packages do not have the upgrade option, which means that if you want to upgrade to the next version, you will have to purchase the version with full price.

Office Online is a free version of Office that you can use in your web browser.

Compare Office 2016 as a one-time purchase with the Office 365 subscription

one-time purchase
(Example: Office Home & Student 2016)
Office 365 subscription
(Example: Office 365 Home)
Cost Pay once, for a price Pay a small monthly fee or savings through yearly payments
Office applications Integrated Get Office 2016 apps, as Excel, Word and PowerPoint. Your apps will not be updated when new features are released. Integrated Get the latest version of Office applications, like Excel, Word, PowerPoint, and Outlook. Currently, the latest version is Office 2016, but your version will continue to receive new feature updates. PC users can also download Access and Publisher.
The update feature versions Not integrated Includes security updates, but you will not receive new features added to Office 2016. Do not include upgrades to major releases. Integrated Your version of Office will always be improved. Get the latest features and updates from Microsoft. Includes major upgrades to future versions.
Install Office on multiple computers (Mac or PC) Not integrated Single-purchase packages are designed for a single operating system, so your Office will not be compatible with a Mac and a PC. Integrated With Office 365 Home, you can install Office applications for up to 5 computers, and you can install the combination on both Mac and PC. If you do not need all those installations, share them with your family members.
Install Office and own advanced features on tablets and mobiles Not integrated Get basic editing features that are only available on your tablet and mobile. Integrated Get additional features when you sign in to Office apps on your device. With Office 365 Home, you get these extra features on up to 5 tablets and 5 smartphones.
Additional online storage Not integrated Not integrated. Integrated Store your files safely in the cloud, and access them from anywhere. Get 1 TB of OneDrive cloud storage per user, for up to 5 users (Office 365 Home).
Does not include technical support Not integrated Includes only initial technical support for installation. Integrated Contact Microsoft through your subscription at no additional cost for help with technical troubleshooting or for subscription and billing support.

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