Microsoft 365 (M365) and Office 365 (O365) are both subscription suites from Microsoft, but they are not the same thing. The simplest difference is that Office 365 is a subset of Microsoft 365: O365 includes only the cloud productivity apps (Word, Excel, Teams, Exchange, etc.), while M365 bundles those same apps with Windows 10/11 Enterprise licenses, enterprise mobility and security (EMS), and advanced security and device management tools. If you only need email, Office apps, and Teams, O365 is enough; if you want a complete enterprise IT solution with OS and security, you need M365.
What Office 365 Actually Includes
Office 365 launched in 2011 as a subscription replacement for the old perpetual Office licenses. It gives you the familiar Office applications (Word, Excel, PowerPoint, Outlook, OneNote, Publisher, Access) plus cloud services such as Exchange Online (email), SharePoint Online (document storage), OneDrive for Business (personal storage), and Teams (chat and meetings). All plans include 50 GB mailbox storage, 1 TB of OneDrive storage, and the ability to install Office on up to five devices per user.
O365 plans are named by business size: Business Basic, Business Standard, Business Premium, and Enterprise E1, E3, E5. The Enterprise E3 plan, for example, includes desktop Office apps, Exchange, SharePoint, Teams, and eDiscovery, but it does not include Windows.
What Microsoft 365 Adds on Top
Microsoft 365 was introduced in 2017 as a bundle that combines Office 365 with Windows 10 Enterprise and Enterprise Mobility + Security (EMS). The idea was to give organizations one subscription that covers the entire stack: productivity apps, operating system, and security/device management. When you buy a Microsoft 365 plan (E3, E5, Business Premium, F3), you get everything in the corresponding Office 365 plan plus:
- Windows 10 or Windows 11 Enterprise licenses (for up to 5 devices per user)
- Azure Active Directory Premium P1 or P2 (identity and access management)
- Intune (mobile device and app management)
- Advanced security tools like Microsoft Defender for Office 365, information protection, and cloud app security (depending on plan)
- Windows Autopilot and other deployment/management tools
For example, Microsoft 365 E3 includes Office 365 E3, Windows 10/11 Enterprise E3, and EMS E3. Microsoft 365 E5 adds advanced security and analytics features like Power BI Pro and Defender for Identity.
Key Differences at a Glance (Table)
| Feature | Office 365 | Microsoft 365 |
|---|---|---|
| Office apps (Word, Excel, Teams, Outlook) | Yes | Yes |
| Exchange, SharePoint, OneDrive | Yes | Yes |
| Windows 10/11 Enterprise license | No | Yes |
| Azure AD Premium (identity management) | No (basic only) | Yes (P1 or P2) |
| Intune (device management) | No | Yes |
| Advanced security (Defender, DLP, Cloud App Security) | Limited (some in E5) | Full suite (E5) |
| Target audience | Users who only need productivity apps | IT departments wanting integrated OS + security |
| Example plans | Business Standard, Enterprise E3 | Business Premium, Enterprise E3/E5 |
Note: Microsoft 365 Business Premium is the small-business version that includes Office 365 Business Premium plus Intune and Azure AD P1. It is often the recommended plan for companies under 300 users.
How the Plans Compare in Practice
If you are a freelancer or a small business that just needs email and Office apps, an O365 plan like Business Standard is cheaper and sufficient. You can still use Teams, SharePoint, and OneDrive, and you get 1 TB of cloud storage per user. You do not get Windows, but you can buy a standalone Windows license separately.
If you have an IT team that needs to manage company-owned devices, enforce security policies, or deploy Windows to remote workers, M365 Business Premium or Enterprise E3 is the better fit. The included Windows Enterprise license alone can save money compared to buying Windows separately for each device. The security features (like conditional access and device compliance) are also essential for organizations that handle sensitive data.
Common Misconception: M365 vs O365 vs Office 2019
Many people confuse the subscription plans with the one-time purchase version of Office. Office 2019 (or Office 2021) is a perpetual license: you pay once and own the software forever, but you do not get updates or cloud services. O365 and M365 are subscriptions that include cloud services and continuous feature updates. Microsoft has stopped selling perpetual Office to consumers, but business users can still buy Office 2019/2021 for offline use.
Another misconception is that M365 is just a rebranding of O365. That is false: Microsoft renamed Office 365 to Microsoft 365 in 2020, but the two product lines still exist as separate SKUs. The name change only affected the consumer and small-business bundles (like Microsoft 365 Personal and Family), while the enterprise Office 365 plans remain. In fact, you can still buy Office 365 E3 and Microsoft 365 E3 separately.
How to Choose Between M365 and O365
Consider these factors:
- Do you need Windows? If your users already have Windows 10/11 Pro, you may not need the Enterprise license. If you want to upgrade to Enterprise (for features like BitLocker, DirectAccess, or Windows Update for Business), M365 includes it.
- Do you need device management? If you need to enforce policies on company phones and PCs, M365 includes Intune. O365 does not.
- Do you need advanced security? If you handle regulated data (health, finance), M365 E5 gives you information protection, DLP, and advanced threat analytics. O365 E5 also includes some of these, but not all.
- Budget: O365 plans are cheaper per user. M365 Business Premium is about 30% more expensive than O365 Business Standard, but it includes Windows and Intune.
- User count: Business plans (both O365 and M365) are limited to 300 users. For larger organizations, you need Enterprise plans.
Cost and Licensing Details
Microsoft does not publish fixed prices, but the general structure is: O365 Business Basic ~$6/user/month, Business Standard ~$12.50, Business Premium ~$20. Enterprise E3 ~$32, E5 ~$57. M365 Business Premium ~$22, Enterprise E3 ~$36, E5 ~$57. These are list prices and may vary by region and reseller. Educational and nonprofit discounts are available.
Licensing is per user, and you can mix plans (e.g., some users on O365 E1, others on M365 E5). You cannot mix Business and Enterprise plans in the same tenant, though. Also, M365 plans require a minimum of one license, but some features (like Windows Enterprise) require a device to be associated with a licensed user.
Frequently Asked Questions
Is Microsoft 365 just a new name for Office 365?
No. Microsoft 365 is a superset of Office 365. The name change in 2020 affected the consumer and small-business bundles, but the enterprise Office 365 plans still exist as separate products. Microsoft 365 includes Office 365 plus Windows and EMS.
Can I use Microsoft 365 without Office apps?
No, M365 includes Office apps as part of the bundle. You can choose to not install them, but you still pay for the license. If you only need Windows and security, there are separate Windows 10/11 Enterprise subscriptions.
Which plan is best for a small business?
For most small businesses (under 300 users), Microsoft 365 Business Premium is the best value because it includes Office apps, Teams, Exchange, Intune, and Azure AD P1. If you do not need device management, Office 365 Business Standard is cheaper and sufficient.
Do I need to buy Windows separately if I have Office 365?
Yes, O365 does not include a Windows license. You can use any version of Windows (Home, Pro, etc.) that you already own. If you want Windows Enterprise features, you need to buy a separate license or upgrade to M365.
Can I migrate from Office 365 to Microsoft 365?
Yes, you can upgrade your subscription at any time. Microsoft prorates the cost and you keep all your data and settings. The migration is usually seamless because M365 includes O365.
What happens to my data if I cancel my subscription?
You have 90 days to renew or export your data. After that, your data is deleted and cannot be recovered. It is recommended to download your OneDrive and SharePoint files before canceling.
Bottom Line
Office 365 and Microsoft 365 are both subscription services, but they serve different needs. If you only need productivity apps and email, O365 is enough. If you want a complete solution that includes Windows, security, and device management, choose M365. The table above summarizes the key differences, but always check the latest plan comparison on Microsoft’s official website, as features and pricing can change.
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