Office 365 is a subscription-based cloud version of Microsoft Office that also offers access to cloud tools such as OneDrive, Skype for Business and Microsoft Teams. Small business owners like Office 365 because it's affordable and comes with lots of extras. Microsoft rolls out updates regularly, and the Office 365 admin portal makes it easy to manage user permissions and enforce updates. However, if you've never been a software admin and you don't have the time to learn about the admin portal – or if you have a very small team that doesn't need all of the cloud services Microsoft offers – you may be better off checking out alternatives such as Google's G Suite.
If you do go forward with adopting Office 365, here's what you can expect.
Office 365 subscription tiers
Microsoft offers business-focused and personal-use versions of Office 365. This article focuses on the business line, but freelancers and contractors often get the personal version for dual usage. As with many software-as-a-service products, the fees for Office 365 are per user per month, but they're billed annually. There is an option to pay on a month-to-month basis; but you'll end up paying more overall, so we recommend going the annual route. Here's an overview of the three subscription tiers:
Office 365 Business Essentials: The cheapest Office 365 version is Essentials. It's just $5 a month per user and includes access to Exchange, OneDrive, SharePoint, Skype for Business and Microsoft Teams. This package also includes access to web versions of Outlook, Word, Excel and PowerPoint, but not to the applications, which means you don't get offline access. Another limitation with this subscription tier is that you can install Office apps on only up to five phones and five tablets; with the other subscription tiers, you can also install them on up to five Macs or PCs at a time.
Office 365 Business: At $8.25 per user per month, Office 365 Business is still affordable. This version includes all of the Office applications (Outlook, Word, Excel, PowerPoint, OneNote and Access for PCs), as well as access to OneDrive. However, it does not include the other Microsoft services (Exchange, SharePoint, Skype for Business and Microsoft Teams). Depending on the size of your team and your collaboration needs, this may or may not matter. The other potential issue with this subscription level is that it doesn't include business email, which means you cannot create a custom email address, and you won't have as much email storage as you get with the other subscription levels, both of which offer 50GB of mailbox space and custom email domains.
- Office 365 Business Premium: Like the other versions, the top tier of Office 365 supports up to 300 users. It costs $12.50 per user per month. This subscription includes everything the other two levels offer, with the addition of Microsoft Connections, Microsoft Listings, Outlook Customer Manager, Microsoft Invoicing, Microsoft Bookings, MileIQ and Microsoft Business Center. We recommend avoiding this level of service unless you have a concrete plan for utilizing all of these additional Microsoft products, the majority of which are probably not necessary for smaller operations. Additionally, there are lots of third-party apps that can do what these add-ons do, with more accessible interfaces.
You can manage your Office applications from the main hub.
Office 365 vs. Microsoft 365
Office 365 is a cloud-based suite of productivity apps that you're probably familiar with; Outlook, Word, Excel, PowerPoint, etc. Microsoft 365 is a bundle of services including Office 365, as well as things like Windows 10 Enterprise.
Getting started with Office 365
As with most products, Microsoft allows new users to try out Office 365 for free, but in true Microsoft fashion, you have to fill out a form to do so. You can also purchase Office 365 outright directly from the website. Once you enter relevant information, like your team size and subscription level, you'll manage downloads of the software to a Mac or PC and be able to check which machines already have it installed. You can send out invites to others on your team so they can download it as well.
Depending on the size of your team, the tech you currently use and your access to in-house tech support, you may want to hire a third-party company or consultant to help you with the implementation process. To get an idea of what Office 365 implementation entails, check out general guides on the process, but keep in mind that timelines vary drastically from company to company. Established businesses that are migrating to Office 365 from an existing system will naturally have a longer implementation period than small operations without systems already in place.
After the basic implementation, you can explore further customizations through add-ons available in the Microsoft app store. However, be cautious about implementing too many apps too quickly. Office 365 has lots of built-in functionality, and add-ons can create more work for software admins.
What is Microsoft 365 for Business?
Microsoft 365 is a subscription service that allows you to run your organization in the cloud while Microsoft manages the IT and associated devices. Microsoft also protects you against potential cyberthreats and provides you with all updates and the latest business software. Additionally, by signing up for Microsoft 365 Business, you gain access to the same tools you receive when you subscribe to Office 365 Business Premium. This allows you to work from virtually anywhere while enjoying the benefits and premium features that Microsoft has become known for. It also makes it possible for you to collaborate with members of your team as well as other business affiliates. What is included in Microsoft 365 for Business?
If you subscribe to Microsoft 365 for Business, you will gain access to the following features:
Subscription-based payments: Rather than paying large costs upfront, you will pay a small monthly fee for this service.
Around-the-clock support: You will be able to contact web support 24/7.
Monthly updates: You will get immediate access to new features and updates every month.
Desktop versions of Office apps: By purchasing Microsoft 365 for Business, you will gain access to the full versions of Outlook, Word, Excel, PowerPoint and OneNote.
Cloud storage: You will receive up to 1TB of convenient OneDrive cloud storage space.
One license for Office apps: You can use the apps on up to five mobile devices, as well as up to five PCs or Macs.
- Professional digital storytelling: With the help of Sway, you will also be able to create engaging newsletters, presentations, web-based newsletters, training materials and more.
How does Office 365 for Business work?
Office 365 makes it possible for business owners to collaborate with a wide variety of professionals across the globe. Once you have signed up for the subscription service, you can begin working on business-related documents that can be revised by anyone you wish. Therefore, you can create documents and other business-related materials that can be edited by several authors in real time.
Recent Office 365 updates
Microsoft is constantly updating cloud products such as Office 365 with improved design features and functionality. Recent additions include the following:
Upgrades to Skype: If Skype is included in the Office 365 package you have, you can upgrade for free. The latest version of Skype includes faster load times, free HD video calling for groups, direct file sharing (up to 300MB, with a drag-and-drop interface), and a chat gallery that looks a lot like other business-use chats with @ mentions, notifications, themes and bot add-ons.
Simplified ribbon: Microsoft promises that the current ribbon (the toolbar at the top of the screen) will still be accessible to those who want it. However, there will also be a new version that's "designed to help users focus on their work and collaborate naturally with others." The new ribbon will include smarter search options powered by AI, new color themes, new icons and more.
Microsoft translator support: This feature was added to Word, Excel and PowerPoint. Under the Review tab, you can now translate entire documents or select portions of text.
PowerPoint improvements: Zoom is a new dynamic navigation option for presenting slides. You will have thumbnails you can click on to add an animation. A new transition, called Morph, has been added to PowerPoint. It allows you to add smooth movement between slides.
- New functions in Excel: Excel is adding six new functions: CONCAT, IFS, MAXIFS, MINIFS, SWITCH and TEXTJOIN. CONCAT is similar to CONCATENATE, but it adds support for range references. MAXIFS can get you the largest number in a range, and MINIFS will return the smallest. SWITCH evaluates one value against a list of values to find the result corresponding to the first matching value. TEXTJOIN can combine text from multiple ranges.