Office 365 is a subscription-based cloud version of Microsoft Office that also offers access to cloud tools like 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 on a regular basis, and the Office 365 admin portal makes managing user permissions and enforcing updates straightforward. 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 the cloud services Microsoft offers, you may be better off checking out alternatives such as 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. For our purposes, we'll be focusing on the business line, but freelancers and contractors often get the personal version for dual usage. As with many SaaS products, the fees for Office 365 are per user per month, but 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.
- 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 no offline access. Here's the other problem with this subscription tier: You can only install Office apps on up to five phones and five tablets, but with the other subscriptions, you can also install them on up to five Macs or PCs at a time.
- Office 365 Business: At $8.25 a month, Office 365 Business is still affordable. This version includes all the Office applications (Outlook, Word, Excel, PowerPoint, OneNote, Access for PCs), as well as access to OneDrive, but not the other Microsoft services (Exchange, SharePoint, Skype for Business, 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 either of the other subscription levels, which both offer 50GB 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. The annual cost is $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 Business Center. Our recommendation is to avoid this level of service unless you have a concrete plan for utilizing all these additional Microsoft products, the majority of which are probably not necessary for smaller operations. Additionally, there are lots of third-party apps out there that can do what these add-ons do, with more accessible interfaces.
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 have already installed it. 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 runway 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.
Office 365 updates to expect in 2018
Microsoft is constantly updating cloud products such as Office 365 with improved design features and functionality. The latest round of updates was recently announced, and while they'll roll out in a piecemeal fashion to select groups (and there aren't any firm dates yet), here's what you can look forward to in upcoming updates.
- Upgrades to Skype: If Skype is included in the Office 365 package you have, you can upgrade now 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 users who like the current ribbon (the toolbar at the top of the screen) that it will still be accessible to those who want it, but 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.