What is Microsoft 365? An in­tro­duc­tion to Microsoft’s complete solution

Microsoft 365 includes, in addition to the well-known Microsoft Office package, a variety of primarily cloud-based ap­pli­ca­tions. Different sub­scrip­tions and plans ensure that Microsoft 365 can be used in the personal area as well as being at­trac­tive for business customers.

In­for­ma­tion correct as of July 2025

What is Microsoft 365 anyway?

Under the brand name Microsoft 365, Microsoft dis­trib­utes its pro­duc­tiv­i­ty software cloud-based on a sub­scrip­tion model. The popular Office suite no longer needs to be purchased as a desktop in­stal­la­tion but is available in the cloud as Software-as-a-Service. Ad­di­tion­al­ly, Microsoft 365 includes various com­mu­ni­ca­tion and col­lab­o­ra­tion tools.

This sales model is not new, but it is un­fa­mil­iar to long-time Microsoft customers. Ad­di­tion­al confusion is caused by al­ter­na­tive Microsoft offerings such as Office Online and Microsoft Office, as well as the scope of available license models.

Office Online consists of Microsoft’s Office programs in the form of free web apps. However, these have a reduced range of functions. Microsoft Office, on the other hand, is the classic desktop in­stal­la­tion. Once you purchase the Office suite, you can use it on your PC. You won’t receive updates to newer versions.

Microsoft 365

Microsoft 365 bridges the gap between the web apps offered through Office Online and the classic desktop in­stal­la­tion. Instead of pur­chas­ing the software outright, users enter into a sub­scrip­tion.

For the duration of the contract term, you receive unlimited access to all ap­pli­ca­tions and features included in the re­spec­tive sub­scrip­tion package. The web interface of Microsoft 365 is available to you in the web browser, where you can access the Office Online apps.

Selected versions of Microsoft 365 also include in­stal­lable full versions of the well-known Office ap­pli­ca­tions. However, the range of functions is expanded with ad­di­tion­al cloud services such as online storage and internet telephony.

If a local version of the Office suite is included in the product scope, you will find a button in the web interface that allows you to start the in­stal­la­tion on any PC or Mac and mobile devices (Windows, Android, or macOS) from the cloud.

Microsoft 365 operates on a cloud-based system. Data storage, computing processes, and software in­stal­la­tions are primarily carried out on Microsoft data center servers. The advantage for users is that Microsoft 365 services are prac­ti­cal­ly available every­where there is an internet con­nec­tion.

The downside of this cloud-based software usage is that sensitive data in the form of emails, documents, photos, or videos is stored in an external data center. Users are thus compelled to comply with Microsoft’s privacy policies. For business use of Microsoft 365, ad­di­tion­al steps like a com­pre­hen­sive data pro­cess­ing agreement may also be required.

Is there a dif­fer­ence between Microsoft 365 and Office 365?

Fun­da­men­tal­ly, in 2020 Microsoft 365 replaced Office 365. With the re­brand­ing, the existing dif­fer­ences between Microsoft 365 and Office 365 have dis­ap­peared. So now, only Microsoft 365 exists with its different plans. The tricky part is that Microsoft 365 still includes plans under the name “Office 365.” These plans are primarily aimed at ed­u­ca­tion­al in­sti­tu­tions.

What is in Microsoft 365?

Depending on which plan you choose, a Microsoft 365 sub­scrip­tion offers you a range of pro­fes­sion­al Microsoft ap­pli­ca­tions for word pro­cess­ing, spread­sheets, pre­sen­ta­tions, and database man­age­ment. Ad­di­tion­al­ly, the cloud-based pro­duc­tiv­i­ty software provides access to email and groupware functions, cen­tral­ized data storage, and a powerful tool for instant messaging, video con­fer­enc­ing, IP telephony, and screen sharing.

Many new updates and features are offered ex­clu­sive­ly for the sub­scrip­tion model and require a Microsoft 365 account.

Word

Microsoft Word is the classic word pro­cess­ing program. Microsoft 365 also offers sub­scribers the ability to create documents in the familiar Word interface. Depending on the plan, there’s a web app with reduced features, a full desktop in­stal­la­tion, or a version tailored for mobile devices.

Unlike the Microsoft Office version, Word in the sub­scrip­tion model links pro­fes­sion­al document creation with various cloud functions. A Microsoft 365 account offers con­nec­tions to the OneDrive cloud storage and the Share­Point content man­age­ment system. This allows users to centrally manage documents and share them with other users. Entire teams can col­lab­o­ra­tive­ly edit documents in real-time and com­mu­ni­cate directly within Word.

Excel

Microsoft Excel is the most widely used software for pro­fes­sion­al spread­sheets worldwide. Anyone looking to organize, filter, format, analyze, or visualize numerical or text-based datasets turns to Microsoft’s standard solution. The program includes extensive col­lec­tions of formulas and math­e­mat­i­cal functions—for example, for business or sta­tis­ti­cal cal­cu­la­tions—and is in­dis­pens­able in everyday office life.

As part of the cloud service Microsoft 365, Excel offers in­ter­faces to OneDrive and Share­Point. Users have the ability to share Excel workbooks within a team and col­lab­o­ra­tive­ly edit them in real-time. This requires internet access and signing in with a Microsoft or Microsoft 365 account.

Pow­er­Point

Microsoft Pow­er­Point is an in­ter­ac­tive pre­sen­ta­tion software. The program is based on a slide-oriented concept, where content is displayed as text blocks, graphics, charts, or mul­ti­me­dia elements on suc­ces­sive slides. Various design templates, Au­toShapes, charts, and SmartArt elements can be cus­tomized in­di­vid­u­al­ly, offering users a wide scope for cre­ativ­i­ty.

As with Word and Excel, Microsoft relies on a central file man­age­ment system and team-based syn­chro­nous work with Pow­er­Point. Here too, the con­nec­tion to OneDrive and Share­Point is linked to a Microsoft or Microsoft 365 account.

OneNote

OneNote is Microsoft’s digital notebook. Users can create, organize, and share notes with the software. Besides keyboard text input, OneNote supports images and audio and video files. On touch­screen devices, notes or drawings can be made with a tablet pen or fingertip. When content from other ap­pli­ca­tions or the internet is in­te­grat­ed, OneNote au­to­mat­i­cal­ly adds a link to the source.

As part of Microsoft 365, OneNote can be linked with the cloud services OneDrive and Share­Point to share or col­lab­o­ra­tive­ly edit notes with friends, family, or col­leagues. Created notes are au­to­mat­i­cal­ly saved and synced in the cloud, ensuring you always have the latest version available on all your devices.

Outlook

Outlook is Microsoft’s email program and Personal In­for­ma­tion Manager (PIM). The software allows users to manage emails, contacts, ap­point­ments, and tasks. In corporate en­vi­ron­ments, Outlook is typically used as a client for the Microsoft Exchange server. When combined with Microsoft’s mail server solution, users have access to enhanced software features, including the out-of-office assistant, mailbox sharing, and del­e­ga­tion options.

Outlook allows you to create groups for sharing files and notes. In com­bi­na­tion with Microsoft Teams, voice and video calls can be initiated directly from Outlook. With an interface to OneDrive and OneDrive for Business, at­tach­ments can be loaded directly from the cloud and shared with friends, family, or business partners.

Access

Access is Microsoft’s database man­age­ment system for end users. The software combines the Jet database engine with an In­te­grat­ed De­vel­op­ment En­vi­ron­ment (IDE). This is available through a graphical user interface.

Users can create custom database apps with Access without pro­gram­ming knowledge, either as a desktop ap­pli­ca­tion or for the web browser. All data is stored in the backend on SQL servers and the Microsoft Azure SQL database, ensuring high re­li­a­bil­i­ty, data security, and scal­a­bil­i­ty. With pro­fes­sion­al­ly designed app templates featuring a user-friendly interface, Access offers newcomers a quick start in database man­age­ment. Ex­pe­ri­enced users can also create custom apps with the program in just a few steps.

Publisher

Publisher is the desktop pub­lish­ing software within the Microsoft ecosystem. The program offers features to create pro­fes­sion­al print pub­li­ca­tions, online pre­sen­ta­tions, or websites but does not reach the com­plex­i­ties of industry software like Adobe InDesign or QuarkX­Press. However, this beginner-friendly program impresses with its easy handling and various templates.

If users are signed in with a Microsoft or Microsoft 365 account, all pre­sen­ta­tions created with Publisher are au­to­mat­i­cal­ly saved in the cloud, allowing them to be shared and col­lab­o­ra­tive­ly edited via a sharing link. Publisher is only available for Windows PCs.

Planner

Planner is a project man­age­ment tool developed for Microsoft 365 to manage tasks and is es­pe­cial­ly suitable for busi­ness­es. The software connects teams in the cloud and enables them to organize col­lab­o­ra­tive work. Users create project plans and tasks with Planner, assign them to col­lab­o­ra­tors, and set deadlines. Sta­tis­tics and graphical vi­su­al­iza­tions provide everyone involved with an overview of the project’s progress.

Team com­mu­ni­ca­tion takes place directly in Planner. Ad­di­tion­al­ly, the software offers in­te­gra­tions with other Microsoft 365 ap­pli­ca­tions. Users have access to emails, documents, and files in the cloud storage directly from the program. With these features, Planner es­tab­lish­es itself as an al­ter­na­tive to com­pa­ra­ble products like Trello or Asana.

Sway

With Sway, Microsoft enhances the Office suite with a web ap­pli­ca­tion for digital sto­ry­telling. The software allows text and mul­ti­me­dia elements from various sources like your computer, the Bing search engine, OneDrive cloud storage, YouTube, or Facebook to be in­te­grat­ed into in­ter­ac­tive pre­sen­ta­tions.

Sway projects, simply called “Sways,” can be edited, played, and shared online with friends or col­leagues via the web browser. They only need a sharing link to access the pre­sen­ta­tion from the Microsoft server; no login or reg­is­tra­tion is required.

Exchange Online

Exchange Online is Microsoft’s cloud-based al­ter­na­tive to the popular groupware and mail server software Exchange Server. While the tra­di­tion­al Exchange Server is operated as On-Premises software, Microsoft offers Exchange Online as a sub­scrip­tion model where the server software is hosted in Microsoft’s data center, rather than on company premises. This model par­tic­u­lar­ly targets small and medium-sized busi­ness­es without their own IT in­fra­struc­ture. Exchange Online is part of the Microsoft 365 Business plans as well as the En­ter­prise plans E1, E3, and E5.

OneDrive and OneDrive for Business

OneDrive is the name of Microsoft’s cloud storage platform. As part of the Microsoft 365 plans Home, Personal, and Education, Microsoft offers users 1 terabyte of cloud storage in Microsoft’s data center. Sub­scribers of Microsoft 365 thus have the ability to centrally store, share, or col­lab­o­rate on documents, photos, or other files. With in­te­grat­ed syn­chro­niza­tion options, selected OneDrive folders can also be made available offline.

OneDrive for Business is an enhanced version of the online storage designed for business use. User accounts for OneDrive for Business are included in the Microsoft 365 Business and En­ter­prise plans and are provided to employees by their employers.

Unlike OneDrive, these are employee accounts managed by the system ad­min­is­tra­tor of the re­spec­tive company or or­ga­ni­za­tion, not privately. Companies can grant employees different access rights to data in the cloud. Microsoft ensures the security of business data in OneDrive for Business through advanced en­cryp­tion and com­pli­ance features. The storage quota also includes 1 TB per user.

Both versions of Microsoft’s online storage can be in­te­grat­ed into other Office ap­pli­ca­tions such as Word, Excel, Pow­er­Point, or OneNote, allowing users to access data in the cloud in real-time from these programs.

Teams

Microsoft Teams is a central com­mu­ni­ca­tion platform specif­i­cal­ly designed for busi­ness­es to optimize col­lab­o­ra­tion. Teams offers instant messaging, video and audio trans­mis­sions, file transfers, screen sharing, and many other features that can be accessed via the browser or as a stand­alone ap­pli­ca­tion.

One of the most out­stand­ing features of Microsoft Teams is the ability to include a large number of par­tic­i­pants in online con­fer­ences. Ad­di­tion­al­ly, Teams provides advanced security features that meet modern business re­quire­ments for data pro­tec­tion and com­pli­ance. The cen­tral­ized man­age­ment of user accounts makes it easier for IT ad­min­is­tra­tors to ef­fi­cient­ly manage user rights and enforce security standards.

Another major advantage of Teams is its in­te­gra­tion with other Office ap­pli­ca­tions like Outlook, which enables seamless col­lab­o­ra­tion across various Microsoft products. Microsoft Teams is included in different Microsoft 365 Business and En­ter­prise plans, providing a com­pre­hen­sive solution for companies relying on efficient and secure com­mu­ni­ca­tion.

Share­Point Online

Share­Point Online is a cloud-based al­ter­na­tive to Share­Point Server, software that allows for the creation and man­age­ment of team and project-oriented websites for internal col­lab­o­ra­tion. Share­Point Online functions as a content and document man­age­ment system and provides an intranet portal for the internal pub­li­ca­tion of in­for­ma­tion and news within an or­ga­ni­za­tion.

Unlike Share­Point Server, the online version with reduced core functions is not installed and deployed locally, but is hosted in the Microsoft data center. This offers small and medium-sized busi­ness­es the advantage of not having to purchase and manage the in­fra­struc­ture required for the service them­selves.

To meet the security and com­pli­ance re­quire­ments of a business ap­pli­ca­tion, Share­Point offers flexible man­age­ment options that allow for the de­f­i­n­i­tion of uniform policies for all processes and involved employee devices. Share­Point Online is included in all Microsoft 365 sub­scrip­tions, although the in­di­vid­ual plans differ in the scope of available Share­Point features.

Microsoft Copilot

Microsoft Copilot is a powerful AI-driven feature in­te­grat­ed into various Microsoft 365 ap­pli­ca­tions. It uses ar­ti­fi­cial in­tel­li­gence to assist users with content creation, data analysis, and task au­toma­tion. This AI feature helps enhance pro­duc­tiv­i­ty and create more efficient workflows.

Microsoft Copilot is currently available as an add-on for the Microsoft 365 Business and En­ter­prise plans—but not for all markets and languages.

How much does Microsoft 365 cost?

For in­di­vid­u­als, Microsoft 365 is available starting at $99.99 per year or $9.99 per month. Busi­ness­es can choose from different plans based on desired features, which of course vary in price. The most af­ford­able Business Plan starts at $6.00 per user per month. For large en­ter­pris­es, Microsoft 365 pricing begins at $8.25 per user per month (“E1” without Teams).