What is Microsoft 365?
Quick answer
Microsoft 365 is Microsoft’s subscription bundle for work and home: the Word, Excel, PowerPoint and Outlook apps, OneDrive cloud storage and, on business plans, Teams, SharePoint and company email. The web versions of Word, Excel and PowerPoint are free with a Microsoft account.
Last updated
Updated · By Robert Breen
Why it matters
For most offices, Microsoft 365 is the toolset everything else plugs into. Knowing what is already in the bundle saves money, because teams often pay for a separate file-sharing, chat or form tool that duplicates something they already have.
The bigger shift is from files on one computer to files in the cloud. When documents live in OneDrive or SharePoint, people stop emailing attachments, several people can edit at once with co-authoring, and a laptop that dies takes nothing with it.
A worked example
A seven-person insurance agency pays for a business Microsoft 365 plan. Each person gets Outlook on the agency’s own domain, desktop Office apps and 1 TB of OneDrive. The agency creates one Team with channels for Personal Lines, Commercial and Admin, and moves its shared drive folders into those channels.
Before the move, renewals were tracked in a spreadsheet on the owner’s laptop. Afterwards the renewal tracker lives in the Commercial channel, three producers update it at the same time, and the owner checks it from her phone. Nothing new was bought; the agency started using what the plan already included.
Often confused with
Microsoft 365 vs Office
"Office" was the old name for the desktop apps sold as a one-time purchase. Microsoft 365 is the subscription that includes those apps plus cloud services. Microsoft still sells one-time versions (such as Office 2024), but they get no new features and no cloud extras.
Microsoft 365 vs Copilot
Copilot is the AI assistant that works inside Microsoft 365 apps on eligible plans. See Microsoft Copilot in the AI glossary for the product family.
Microsoft 365 vs Google Workspace
Google Workspace is Google’s equivalent bundle (Gmail, Docs, Sheets, Drive, Meet). Both do the same core jobs; companies usually pick one based on the tools their staff and clients already use.
Tips
- List what your plan includes before buying another tool; Forms, Bookings, Lists and Planner are often already there.
- Save shared files in SharePoint or Teams, not on personal desktops.
- Learn on the free web apps first; they cover most everyday work.
Related terms
Learn it in a free lesson
- Microsoft 365 Explained: Which App Does What, Free vs Paid (about 8 minutes)
- Microsoft 365 Copilot for Beginners: Excel, Word, Outlook, Teams (about 12 minutes)
Related in the AI glossary
Sources
Written from these official help pages. Menus change, so if a button has moved, the help page has the current wording.
- Microsoft Support: What’s the difference between a paid Microsoft 365 subscription and the free web apps?
- Microsoft Support: Collaborating with Teams, SharePoint and OneDrive
Frequently asked questions
- Is Microsoft 365 free?
- The web versions of Word, Excel and PowerPoint are free with a Microsoft account, with 5 GB of OneDrive storage. Desktop apps, more storage, Teams for business and company email need a paid plan.
- What apps are in Microsoft 365?
- Word, Excel, PowerPoint, Outlook and OneDrive on most plans. Business plans add Teams, SharePoint, Exchange email and admin tools, and some include Forms, Planner, Lists and Bookings.
- Do I need Microsoft 365 to open Excel files?
- No. The free Excel for the web opens .xlsx files, and Google Sheets can open them too. You need a paid plan for the desktop app.
All microsoft 365 terms, A to Z · Free microsoft 365 lessons