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Office 365 vs Microsoft 365: Which one should you choose?


Released back in 2017, Microsoft 365 (M365) has received a lot of attention. However, the majority of small businesses and enterprise don’t fully understand which version to choose, what the features mean and the price differences.

After April 21 2020: Some Office 365 plans will change to Microsoft 365. Read more about it here

There is still a lot of confusion over the differences between Office 365 (O365) and Microsoft 365 (M365). The capabilities and use case of Microsoft 365 is not commonly known, in this article we aim to give you a basic understanding of the differences between the two product suites.

O365 vs M365: Which one should you choose? … The short answer

Office 365 is Microsoft’s cloud-based productivity suite, which includes desktop apps from the office suite which includes: Word, Outlook, PowerPoint and cloud services for Exchange, Skype and Teams.

Microsoft 365 bundles together Office 365 plus Windows 10 Pro and Enterprise Mobility + Security for a seamless and secure experience. M365 gives IT teams the ability to manage devices, keep users systems up to date, data secure all while protecting the corporate network.

Both solutions are consumed on a monthly or annual per-user subscription which is designed for business productivity. M365 shows its power with its device management, advanced security, and productivity capabilities.

  • Small businesses looking for just the essential business tools, O365 may be enough. However, we always recommend M365 to keep your business secure.
  • Small and medium businesses looking to get collaboration running quickly and efficiently while protecting user’s security, M365 Business is likely the best option.
  • Large business (over 300 people) that need Microsoft’s full suite of productivity and collaboration tools including analytics and advanced security, M365 Enterprise is the best option.

What does Microsoft 365 include?

M365 has the Office 365 suite and services for remote device and mobile application management. It also includes Windows 10 Pro (M365 Business) and Windows 10 Enterprise (M365 E3/E5/F1) protection for devices against spam and malware. M365 comes in different flavours for business and enterprise. Each version comes with a different set of features which generally includes:

  • Office 365 collaboration and communication tools – Word, Excel, PowerPoint, Outlook, Teams, SharePoint, Skype and much more
  • External sharing with staff and employees using SharePoint, Teams, or OneDrive;
  • Windows 10 Professional;
  • Generous email and storage limits: Microsoft 365 Busienss (50GB email & 1TB OneDrive), Microsoft 365 E3/E5/F1 (Unlimited email & Onedrive);
  • Microsoft Admin Console;
  • Advanced Threat Protection with data governance, protection from spyware, viruses, other malware, and compliance (M365 Business only).

See the full detailed list of Microsoft 365 features

See: M365 vs O365 full feature comparison

More details on Office 365

Office 365 plans are divided between Office 365 Business and Office 365 Enterprise.

Office 365 Business

For Office 365 Business you have two options: Office 365 Business Essentials and Office 365 Business Premium. The main differences are:

  • Office 365 (Apps Only) is best for businesses that need Office apps plus cloud file storage and sharing on PC, Mac, or mobile. Includes the desktop-only versions of Outlook, Word, Excell, PowerPoint and Access;
  • Office 365 Business Essentials offers only online versions of Office applications (Word, PowerPoint, etc.) while Office 365 Business Premium offers desktop versions;
  • Office 365 Business Premium offers more tools to build and manage your business such as scheduling, invoicing, Exchange, Sharepoint and Teams.

Office 365 Enterprise

For Office 365 Enterprise you have four options: Office 365 ProPlus, Office 365 E1, Office 365 E3, and Office 365 E5.

  • Office 365 ProPlus is for enterprises that want access to just the desktop apps and OneDrive without the need of email, SharePoint and collaboration;
  • Office 365 E1 doesn’t offer desktop Office applications, instead includes the online versions of Office 365 Enterprise, email (Exchange) and collaboration tools like SharePoint, Onedrive, Teams and Yammer;
  • Office 365 E3 includes the Enterprise version of O365 which offers all of the desktop and online features of Office 365 ProPlus and Office 365 E1. Plus security and compliance tools such as legal hold, and data loss prevention. This is a good option for larger businesses that need more security and may face litigation;
  • Office 365 E5 offers all of the features of Office 365 E3, plus advanced security, analytics (PowerBi) and voice capabilities.

See: M365 vs O365 full feature comparison

More detail on Microsoft 365

Microsoft 365 plans are also divided between Business and Enterprise versions.

Microsoft 365 Business

Microsoft 365 Business is Office 365, Windows 10 Pro and advanced security features and device management capabilities.

A chart comparing Microsoft 365 Business to Office 365 Business Pro can be found here.

Microsoft 365 Enterprise

Microsoft 365 Enterprise is Office 365 Enterprise + Windows Enterprise (the operating system) plus a variety of features and apps depending on the tier. Microsoft 365 Enterprise is subdivided into 3 tiers: F1, E3, and E5, each containing more features at a higher price point. The key differences between each tier are summarized below:

Microsoft 365 F1

  • Aimed at kiosk/shared workstations and first-line/front-line workers;
  • Perfect for retail workers, easy-to-use tools and services to create, update, manage schedules and tasks, communicate, train and onboard quickly;
  • Office applications are online versions only.

Microsoft 365 E3

  • A universal toolkit for teamwork, providing flexibility and choice on how to connect, share and communicate;
  • Simplify IT by unifying management across users, devices, apps and services;
  • Desktop versions of Office applications;
  • Office 365 data loss prevention;
  • Basic analytics.

Microsoft 365 E5

  • More advanced meeting and voice tools, including PSTN conferencing and modern voice with cloud PBX;
  • Simplify IT by unifying management across users, devices, apps and services;
  • Information protection;
  • Advanced Compliance tools;
  • Analytics features;

See: M365 vs O365 full feature comparison

Office 365 Business Pro vs Microsoft 365 Business & Enterprise

Compare the differences between the products and find out how much they cost.

  Features Office 365 Business Pro Microsoft 365 Business Microsoft 365 E3 Microsoft 365 E5
  Estimated retail price per user per month $AUD inc GST $17.49 $28.05 $42.00 $75.70
  Maximum number of users 300 300 unlimited unlimited
Office Apps Word, Excel, PowerPoint, OneNote and Access Business Business ProPlus ProPlus
Email & Calendar Outlook, Exchange Online 50GB 50GB unlimited unlimited
Chat based Workspace, Meetings Microsoft Teams, Skype For Business
File Storage OneDrive for Businss 1TB 1TB unlimited unlimited
Social, Video, Sites Yammer, SharePoint Online, Planner
Business Apps Scheduling Apps Booking, StaffHub
  Business Apps Outlook Customer Manager    
Threat Protection Microsoft Advanced Threat Analytics, Device Guard, Credential Guard, App Locker, Enterprise Data Protection,    
  Office 365 Advanced Threat Protection    
  Windows Defender Advanced Threat Protection      
  Office 365 Threat Intelligence      
Identity & Access Management Azure Active Directory SSPR Cloud Identities, MFA, SSO >10 Apps  
  Azure Active Directory Conditional Access, SSPR Hybrid Identities, Cloud App Discovery, AAD Connect Health    
  Credential Guard and Direct Access    
  Azure Active Directory Plan 2      
Device & App Management Microsoft Intune, Windows AutoPilot  
  Microsoft Desktop Optimization Package, VDA    
Information Protection Unlimited Exchange Archiving, Office 365 Data Loss Prevention, Azure Information Protection Plan  
  Azure Information Protection Plan 2, Microsoft Cloud App Security, O365 Cloud App Security      
On Prem CAL Rights ECAL Suite (Exchange, SharePoint, Skype, Windows , SCCM, Win. Rights    
Compliance Litigation Hold, eDiscovery, Compliance Manager, Data Subject Requests  
  Advanced eDiscovery, Customer Lockbox, Advanced Data Governance      
Analytics Power BI Pro, MyAnalytics      
Voice PSTN Conferencing, Cloud PBX      

To get the most out of your Microsoft 365 investment or to get some help with your Office 365 project, feel free to drop us a line.