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MICROSOFT 365

By Peter Deegan • Comment about this article

Comparing Microsoft 365’s subscription/rental to the single-purchase, perpetual-license Office 2024 “boxed” product is not quite the same as comparing apples to oranges, but it’s certainly not easy.

I’ll try to present the facts and burst some myths so you can make your own decision based on your situation. I’ll also give my recommendation with reasons and concerns. See Is Office 2024 worth getting excited about? (AskWoody, October 14, 2024) for my overview of the latest perpetual-license Office.

Online opinions on this topic are often biased. Microsoft fanboys (in the press, social media, and forums) will go along with whatever Redmond or those with a vested interest (such as volume license sellers) want. These opinions almost always come down on the side of Microsoft 365.

On the other hand, in-store salespeople are known to push perpetual-license Office (now Office 2024) because the much higher sticker price improves their commission or other employee metrics. I’ve had to help a few people who’d been conned into buying the higher-priced Office, then became disappointed when it didn’t have the programs or features they expected. See License and registration, please (AskWoody, March 28, 2022).

Before we begin, a few clarifications. For simplicity, I’ll focus on the closest possible match of apps. That means comparing the Microsoft 365 consumer plans (Personal and Family) with the Office 2024 Home and Business package, which includes Outlook.

For easier reading and math, I’ll use rounded prices (e.g., $250 instead of $249.99). All prices are official retail in US dollars before taxes. The calculations are a little different in the real world when taking advantage of discounts. I’m showing annual prices for Microsoft 365, not the higher monthly prices available for some Microsoft plans. The Copilot Pro add-on is not included in the comparison because it’s not available with Office 2024.

Although Microsoft pushes the differences among Microsoft 365 apps, it’s important to keep in mind that the core features are the same. All the same basic features and skills apply to both the “365” and Office 2024/2021/2019 versions of Word, Excel, PowerPoint, and Outlook.

The Microsoft 365 apps have more — and the latest — features, but the perpetual-license Office apps are hardly lacking. Both products use the same code base.

Documents and presentation files should be compatible between Word/Excel 365 and its Office perpetual-license counterparts. Excel 365 workbooks might have compatibility problems if they use features such as Linked Data Types or some dynamic array functions.

A key difference between the subscription and perpetual-license products is the number of computers on which you can use the software. This difference alone makes Office 2024 a lot more expensive for most people.

Office 2024 and its predecessors are licensed for one computer only. Microsoft 365 plans work on up to five devices per user.

Microsoft harps on about the major features of Microsoft 365. Some are important.

1TB of OneDrive — This is a big benefit. One terabyte is enough for most people. You don’t have to use OneDrive to store documents, but it’s very useful. See Escape from the clutches of OneDrive (AskWoody, July 8, 2024), Better and safer file sharing in OneDrive (AskWoody, March 25, 2024), and Solo collaboration: Office’s untold advantage (AskWoody, July 25, 2022).

Extras in apps — The 365 versions of Word, Excel, PowerPoint, and Outlook have features not contained in perpetual-license Office. A few come quickly to mind: Dictation; Stock/Currency prices in Excel; and more stock images, videos, and other graphics.

Microsoft Editor — The online grammar and usage checker has more options in the 365 version: clarity, conciseness, formal language, and punctuation. The Editor is available for Chrome and Edge browsers as well as being integrated into Word 365.

Microsoft 365 consumer plans come with some benefits that are often overlooked.

Skype minutes — Sixty minutes per month of calls to many global phone numbers, very handy, especially when traveling.

Clipchamp — Some premium effects and filters are available to Microsoft 365 users.

Personal Vault — 365 users can put unlimited files into the OneDrive Personal Vault, instead of just three. (I’m no fan of the OneDrive Personal Vault.)

Office 2024 Home and Business gets a maximum of five years of support (until October 2029) for the $250 paid up front. Of course, you can use the software past the end of support, but that’s increasingly risky as time passes.

Take that support deadline with a proverbial pinch of salt, because Microsoft has a self-serving and changing definition of “support” for perpetual-license Office. In October 2023, it stopped supporting connections from Office 2019 and 2016 to Microsoft cloud services (including Exchange Online), despite the fact that support for those Office releases still had two years to go.

In value-for-money terms, there’s no way to directly compare Microsoft 365 and Office 2024 because each has different apps, features, pricing structure, and support.

Office 2024 gets a maximum of five years of support for $250 (Home and Business bundle), paid as a lump sum now. That support length reduces as time goes by.

On the other hand, Microsoft 365 Personal costs $350 for five years ($70 per year), an extra $100 paid over time compared to Office 2024. That’s worth it, considering the extra features and services it provides. But the math gets better for the Microsoft 365 Family plan. Although it costs $500 for five years ($100 per year), this can be spread among as many as six family members. For just two people, that translates into $250 per person. For a family of four, $125 per person. That same family would pay $250 per person ($1,000 for the five years) for Office 2024 on one computer each, twice as much as 365 for (again) fewer features.

In the AskWoody forums, there seem to be some misunderstandings about what Microsoft 365 is. That’s partly Microsoft’s fault for overselling some features, such as the OneDrive connection.

For all of Microsoft’s hype about Microsoft 365’s differences, the core software works the same in both Microsoft 365 and perpetual-license Office apps. The two Office releases are not as radically different as Redmond makes out.

Microsoft 365 works offline. The core software works offline, as it always has, while some features need an Internet connection. I’ve used Microsoft 365 in weird and wonderful places with no Internet access — such as long plane flights, under the English Channel, and even on the River Nile in Egypt.

Outlook (classic) works offline to read, compose, reply, and manage a mailbox. It also supports Gmail, Yahoo, and any mailbox with a POP, IMAP, or SMTP connection. The newer Outlook is still a work in progress and best avoided. I’ll explain more about that in an upcoming column.

Microsoft’s Edge browser is not required. Any modern browser — Chrome, Firefox, Safari — is fine.

Normally, Microsoft 365 for Windows/Mac updates monthly with new or changed feature updates. Those updates go unnoticed by most people.

The “AI” features in Microsoft 365 require a separate, paid Copilot plan.

The eternal subscription treadmill

An often-overlooked reason why vendors like subscriptions is that it’s hard for customers to stop once they’ve started. As Microsoft 365 gets more entwined with cloud services, it’s harder to switch away to another product that doesn’t have the same enormous online infrastructure.

No guarantee of consistency

There’s nothing to stop Microsoft from changing what you get for the Microsoft 365 annual fee. They’ve done it already and can do so in the future.

An important example is Publisher, which will be dropped from Microsoft 365 in just under two years’ time.

Constant change

In Microsoft’s world, constant change and updates are a good thing. Redmond seems neither to understand nor care that some customers, individuals, and organizations prefer stable and unchanging software.

There is a way to adjust Microsoft 365 for Windows to obtain feature updates every six months. It’s an option for business users that’s available to consumers with a little nerd trickery.

A trap in Microsoft 365 is the unknown future of pricing.

In the US, the price of Microsoft 365 consumer plans hasn’t changed, but in other countries Microsoft has raised the price. (It has been raised once in Australia and twice in India.)

There are a few ways to get even better value from Microsoft 365.

I understand and share the resistance to software rental and the growing number of subscription plans. Many of those plans and streaming services come off the back of Microsoft’s success with Microsoft 365. However, Microsoft Office is, for many of us, a core part of our lives — whether for work, home, or both.

Although I have some concerns about future price hikes and feature downgrades by Microsoft, the math comes down strongly in favor of Microsoft 365 — almost without considering the extra features that come with the annual plans. For one person, the Personal plan paid annually is attractive. For two or more people, the Family plan is hard to beat.

Contribute your thoughts in this article’s forum!

Peter Deegan is the author of Windows 11 for Microsoft Office Users, Microsoft 365 for Windows: Straight Talk, Eye-Catching Signs with Word, Christmas Cheer with Office, and others. He has been the co-founder and editor in chief of the Office Watch site and newsletters since they started in 1996.

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