Office 2021 vs. Microsoft 365: Understanding the Distinctions


As technology progresses and internet accessibility expands, small businesses increasingly recognize the advantages of mobile work. Whether it's conducting business on the go during trips, participating in conferences or training sessions, or adapting to quarantine restrictions, the ability to edit documents via smartphones has become commonplace. Cloud-based tools have normalized such activities, prompting Microsoft to introduce Office 365—a service facilitating file sharing and collaboration through web browsers.

Table of contents

The newer iteration, now known as Microsoft 365, hasn't entirely supplanted the classic Office suite, which involves installing applications on specific computers. Many users opt to purchase an Office 365 key for seamless usage. Nonetheless, traditional installation remains popular among both businesses and individual users.

Key Differences between Microsoft Application Packages

While numerous changes distinguish the Microsoft application packages, the primary disparities revolve around:

Functionality and Package Availability

Method of License Payment

Number of Devices Covered by the License

License Validity Period

In essence, while both Office 2021 and Microsoft 365 cater to diverse user needs, the decision ultimately hinges on factors such as preferred functionality, payment model, device usage requirements, and the need for regular updates and support.

Office 2021 Features


Office 2021 comprises well-known applications such as Word, Excel, and PowerPoint. Depending on the chosen package, users may also access additional tools like Outlook (in Office 2021 Home and Business) and Microsoft Access and Publisher (in Office 2021 Professional). A notable enhancement from the previous version, Office 2019, is the integration of Microsoft Teams, serving as an alternative to Microsoft's cloud services.

Microsoft Office 365 Offerings


In contrast, Microsoft Office 365 offers a broader range of services tailored for businesses, home users, and educational institutions. The primary distinction lies in its comprehensive utilization of the Microsoft cloud, which processes data externally from the user's device. Despite this, users still have the option to save data locally. Cloud integration enables various new business practices, such as collaborative file editing, file sharing without email, storage on virtual OneDrives, and cross-platform application usage.

OneDrive Storage and Accessibility

Each Microsoft 365 license provides users with 1 TB of OneDrive storage for documents, photos, and other files. This ample storage space serves as a practical alternative to purchasing additional hard drives, even with regular usage over several years. Furthermore, users can access their files from any device, enhancing flexibility and accessibility.

Perpetual License vs. Subscription Model

The choice between Office 2021 and Microsoft 365 often revolves around the licensing model. With Office 2021, users make a one-time purchase and receive a key for perpetual access. However, this model lacks access to future application updates and features for Word, Excel, or PowerPoint.

On the contrary, Microsoft 365 operates on a subscription basis, requiring users to pay periodically (monthly, every six months, or annually). Subscribers enjoy continuous access to the latest application versions and additional features to support their business needs. Additionally, the subscription model permits usage on up to five different devices per user, enhancing flexibility and productivity.


In conclusion, the decision between Office 2021 and Microsoft 365 hinges on individual preferences, budget considerations, and the need for ongoing updates and support. While Office 2021 offers a traditional one-time purchase model with perpetual access, Microsoft 365 provides a subscription-based approach with access to the latest features and cloud-based functionality. Ultimately, users should evaluate their specific requirements and priorities to determine the most suitable option for their work or personal needs


What are the key differences between Office 2021 and Microsoft 365?
Office 2021 offers a standalone package with fixed features, while Microsoft 365 provides a comprehensive suite of tools accessible via subscription.
How do the license payment methods differ between Office 2021 and Microsoft 365?
Office 2021 typically involves a one-time purchase, while Microsoft 365 requires a subscription-based payment model.
How many devices are covered by the license for Office 2021 and Microsoft 365?
Office 2021 is generally limited to a single device per license, while Microsoft 365 permits installation on multiple devices under a single license.
What is the validity period of the license for Office 2021 and Microsoft 365?
Office 2021 offers perpetual access following a one-time purchase, while Microsoft 365 requires ongoing subscription renewal for continued access to services and updates.