What is Microsoft 365? Here's what you need to know about the subscription service to Word, Excel, and other Microsoft programs

  • Microsoft 365 is a subscription-based evolution of Microsoft Office, featuring familiar programs, like Word and Excel, but with additional features.
  • There are different tiers of Microsoft 365 plans suited for different needs, like business, personal, and family plans.
  • Visit Insider’s Tech Reference library for more stories.

You’ve likely heard of Microsoft Office, which consists of workplace applications, including the widely used Microsoft Word program.

What you may not realize is that Word and other Office programs — Excel, PowerPoint, and OneNote — are also a part of Microsoft 365.

Making a one-time purchase of Microsoft Office is still an option to anyone who wants access to the suite of programs. However, you might want to opt for Microsoft 365 instead, which is structured as a paid monthly subscription plan and features myriad perks not included with Office, including cloud-based productivity tools and artificial intelligence capabilities. 

Here’s a little bit more about Microsoft 365, how it differs from its predecessor, and how you can sign up.

What to know about Microsoft 365

Some of Microsoft’s subscription-based services were formerly known as Office 365.

In April 2020, Microsoft rebranded all of those services to Microsoft 365 to help differentiate its subscription service from the traditional Office-branded Microsoft program packages.

Microsoft 365 offers special additions to its classic Office apps as well as access to more programs, like OneDrive. Even a basic Microsoft 365 personal plan gives you access to premium versions of Word, Excel, and PowerPoint, which Office doesn’t offer.  

You also get access to advanced tools and features like Microsoft Editor to help edit your writing; the financial planning tool, Microsoft Money in Excel; and OneDrive, Microsoft’s cloud storage that allows for ease of collaboration in real time.

There’s also a slew of other smart perks in Microsoft 365: You can get focused help on your resume with Word’s Resume Assistant, or help with your next presentation with the PowerPoint Presenter Coach.

Again, these are benefits you won’t see with a basic Office purchase, and you can get them all with a Microsoft 365 plan for home, which has two tiers.

Microsoft 365 plans and pricing

You can compare and sign up for any of the Microsoft 365 plans online through Microsoft’s website. Here’s a breakdown of what each plan offers.


  • Microsoft 365 Personal: At $6.99 a month, or $69.99 for a year, this package covers just one person and offers 1 TB of storage.
  • Microsoft 365 Family: At $9.99 a month, or $99.99 for an annual subscription, this package can be shared with up to six people, offers 1 TB of storage per person, and includes additional safety features in the mobile app.
  • Microsoft 365 Business Basic: At $5 per user per month (with an annual commitment), this package includes Microsoft Teams, secure cloud storage, and the web and mobile versions of Word, Excel, and PowerPoint (desktop versions not included). 
  • Microsoft 365 Business Standard: At $12.50 per user per month (with annual commitment), this package includes Microsoft Teams, secure cloud storage, business email, and premium Office applications across all devices.
  • Microsoft 365 Business Premium: At $20 per user per month (with annual commitment), this packages includes all Standard features, as well as advanced cyberthreat protection and device management.

As the 365 plans move up in tiers, there are added security and business tools available. For instance, appointment manager Microsoft Bookings is available in the Standard and Premium versions of Microsoft 365, but not the Basic, and only the Premium tier of Microsoft 365 Business grants you access to mobile-device manager Intune and Azure Information Protection.

If you can’t decide on a business plan, Microsoft can help you determine what plan best fits your business, and you can back out before the one-month free trial ends.

Related coverage from Tech Reference:

  • How to get the Microsoft Office Suite on your iPhone and use certain apps for free

  • What is OneNote? How Microsoft’s note-taking app can help you organize your work

  • How to get all of the Microsoft Office suite apps on an Android device for free or with a paid subscription

  • What is Microsoft Teams? Here’s what you need to know about the workplace communication tool

  • What is Microsoft Authenticator? Here’s what you need to know about the two-factor authentication app that can secure your online accounts

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