Microsoft Office 2021 vs. Office 365

This article first appeared on the TechSoup Global website - thanks to them for sharing!

Microsoft offers two flavours of its Office productivity suite: the subscription-based Office 365 and the on-premises editions of Office 2021. In this article, we'll provide an overview of these two offerings to help you determine which is the right option for your organisation.

What Do the Terms "On-Premises" and "Cloud" Mean, Anyway?

In general, "on-premises" refers to software purchased on a per-license basis and installed on individual computers. It's the traditional approach to software: You buy a license and you get a disc to install the software (or, more likely, you get directed to a place to download the software). You install the software according to the license terms — in the case of Office, you have to purchase a license for each computer you want to install the software on. Traditional Microsoft Office products, like Office 2021, fall under the on-premises umbrella.

The cloud or subscription version of a product refers to software as a service (SaaS), which is essentially software licenses that you purchase and use on a subscription basis. As long as you pay your subscription fee, you get to use that software in accordance with the license terms. You typically get all software updates — from small bug fixes and security patches all the way up to major new releases — for as long as you subscribe.

The cloud can also refer to apps and services that live entirely online. Webmail services are one example — you use them exclusively through the web browser as opposed to installing an additional piece of software. These services are sometimes free, but they'll often come in paid versions as well. Paid services usually operate as subscriptions — you can use them for as long as you pay.

Many subscriptions offer both cloud (web) versions of products and installed versions that work seamlessly when you have connectivity. This is the case with Office 365.

Depending on your Office 365 plan, you can access Office apps that you can install on up to five devices, including your computers and mobile devices. In addition, you can access an array of online services, like the web version of Outlook, Office Online (versions of Word, Excel, and so on that you can use in your web browser), and OneDrive.

The online apps and desktop apps work with each other, too. For example, you can create a document using Word for Mac, save it to your OneDrive, then continue working on it using Word Online.

Compare Office 2021 Suites to an Office 365 Subscription

Choosing the Right Option

There are numerous factors to consider when it comes to deciding which Office product line to choose — up-front cost, maintenance, upgradability, you name it. In this section, we break down some of the defining characteristics of both Office 365 and Office 2021.

Office 365

Flexible licensing options: Microsoft offers several different Office 365 plans to Not-For-Profits, and you can choose the right plan for your needs.

All Office 365 Not-For-Profit plans provide access to email, online file storage and sharing, the Office Online web apps, and some additional features to allow for collaboration across your staff. Microsoft 365 Not-For-Profit Business Premium and Business Standard, and Office 365 E3, or E5 plans include access to the Office apps for Windows, macOS, Android, and iOS. Additional features are available as well, depending on the plan.

You can also mix and match plans to suit the needs of specific staff members. For instance, a free plan may be ideal for part-time employees or volunteers, while full-time staff may require full-fledged desktop applications.

Simplified management and maintenance: Office 365 includes features to help you manage your organisation's Office users so you can easily add, remove, and administer Office 365 accounts. Some Office 365 plans include Microsoft Enterprise Mobility + Security, a collection of tools to help you simplify data security and user management across devices.

Office 365 plans also include OneDrive document storage, as well as hosted email. With hosted email, Microsoft will store your email so you don't have to operate your own email server or use personal email accounts. For smaller organisations, this may be a more secure option compared to managing your email system by yourself. OneDrive storage provides a single place to store documents easily and securely, share and collaborate with colleagues, and access documents from anywhere.

Subscriptions based on users, not computers: With Office 365, you request subscriptions — also known as "seats" — for each Office 365 user within your organisation. For paid plans, each user can download and install the Office apps on up to five devices, including laptops, desktops, tablets, and smartphones. This way, you can work from whichever device you prefer.

This is a departure from the traditional approach of Office 2021, where you request licenses that are tied to a particular computer.

Choose carefully if you can't use web apps: If your Internet access is limited, you'll want to make sure that you choose an Office 365 plan that includes the desktop versions of the Office apps in addition to the web apps. You can continue to use the installed apps while offline, but you'll need to connect to the Internet once every 30 days with Office 365. If that isn't possible, Office 365 may not be ideal for you. Consider an Office 2021 package instead.

Office 2021

Pay once, use forever: Unlike Office 365 plans, which you pay for on a monthly basis, an Office 2021 license is perpetual. Once you purchase it, you can use Office 2021 in accordance with the license terms for as long as you like. This may be a more affordable option, particularly if you're a small organisation or just need basic productivity tools.

You'll get updates for as long as Office 2021 is the current release of Office. You'll also continue to get important security patches for a period of time after Office 2021 is discontinued.

The downside is that you will have to pay to purchase the next major Office release. Also, after a certain number of years, Microsoft no longer provides security and bug fixes for older versions of Office. Also, you have to manually manage any security patches and bug fixes, so unless you upgrade regularly, you could end up using potentially insecure or incompatible software.

Consistency Across Your organisation: Opting for a single edition of Office 2021 across your organisation may simplify your Office deployment since you'll have only one edition to update and maintain.

Less integration with cloud services: While Office 2021 apps can integrate with Microsoft cloud services like OneDrive, the experience isn't quite as seamless. For instance, you can save a file to a personal OneDrive account, but you won't get access to the Office Online web apps. You also won't be able to work across devices as smoothly as you can with Office 365.

Add apps as you need them: If an app, like Microsoft Access, isn't included in the Office 2021 edition that you purchased, you can easily purchase licenses for those apps as needed.

Installation requires some know-how: With Office 2021, Microsoft changed the process for downloading and installing the software. It isn't necessarily difficult if you feel comfortable with technology, but it can be tedious. We offer detailed instructions in this article to help you if you don't feel comfortable with this new installation process.

Covered under Microsoft Software Assurance: Office 2021 products available from TechSoup are covered under Microsoft Software Assurance for two years. If Microsoft releases a new major version of Office within two years of your original request, you may be eligible for a free upgrade.

The Cloud Is Where Things Are Going

The trend is clear: The tech world is moving toward cloud-based software, complete with all the pros and cons that such software brings. Adobe, for instance, has moved most of its product line toward cloud-based offerings, with Adobe Creative Cloud and Adobe Document Cloud.

Microsoft has not stated whether Office 2021 will be the last on-premises version of Office, but we do know that Microsoft currently has a cloud-first mentality, and it's turned most of its attention to cloud solutions like Office 365. So the question of moving to the cloud isn't so much one of "if" as it is one of "when."

We Can Help You Make the Call

In general, if you need access to all the applications and enjoy the perks on multiple devices, a paid Office 365 Not-For-Profit plan would be your best option. This is the only option that offers continuous updates and upgrades with low ownership costs. You may end up paying for features that you may never use, though. If you're fine with working in web-based apps, a free Office 365 plan may be worth considering.

Office 2019 is the best option if you only need the basic features on a single PC or Mac. It allows you to access the must-have applications such as Word, Excel, PowerPoint and Outlook. Installing Office 2021 or using this application does not require you to have an Internet connection, so if you are in an area with limited Internet connectivity, this would be your best option. However, paying for the individual licenses up-front can be pricey, and you would have to pay again for upgrades and tech support.

We can help you determine whether moving to Office 365 is the right decision for your organisation — and if it is, we can guide you toward the right Office 365 plans. Contact us today to get started.