Which one should you use?

Office 2021 launched alongside Windows 11 in October 2021. This is the latest iteration of Microsoft’s 30-year-old productivity suite. But if you visit the Microsoft website, you will notice that they also offer Microsoft 365.

You may be wondering, “Why does Microsoft offer two versions of essentially the same product?” So, to solve your confusion, here is the bottom line between Microsoft 365 and Office 2021.

One-time purchase for subscription

Office 2021 is the single purchase version of the Office suite from Microsoft. It comes in two versions: Home & Student 2021 and Home & Business 2021. The former, which costs $149.99, includes desktop versions of Word, Excel, PowerPoint, and OneNote, while the latter, priced at $249.99, adds Outlook to the mix.

The Home & Business 2021 license also allows you to use apps for corporate use.

Related Topics: What to expect with Microsoft Office 2021?

Microsoft 365, the subscription-based Office suite, comes in two options: Personal and Family. The personal plan costs $69.99 per year (or $6.99 per month), while the family plan costs $99.99 per year (or $9.99 per month).

The initial cash spend for both versions of Office 2021 is significantly higher than Microsoft 365 offers. However, since it is a one-time purchase, you only need to spend on the app once. On the other hand, you will have to pay a fee of $69.99 annually if you want to use Microsoft 365 Personal.

In just two years, you’d already be spending more if you chose Microsoft 365 Personal instead of Office Home & Student 2021. But if you chose the Microsoft 365 family plan and had six users sharing it, you’d only pay $16.67 per person. It will take at least nine years for the cost of Microsoft 365 to equal the price of an equal number of Office 2021 licenses.

Classic Edition vs Premium Edition

Screenshot of Office Home & Student 2021 benefits on the Microsoft website

If you choose Office 2021, you will get 2021 versions of Word, Excel, PowerPoint, and Outlook (included in the Home & Business version). But if you go to Microsoft 365, you will get 365 versions of these apps.

So what is the difference between the two versions of these apps? Currently, there is not much difference between them in terms of features, especially since Office 2021 was released recently.

However, with the release of Classic 2021, you will not get any other updates or new features in the future. What you see now is what you will get. On the other hand, with Premium 365, you can upgrade your installed apps every time Microsoft releases an update or new feature.

For example, Excel 365 received XLOOKUP functionality in August 2019. But if you’re using the 2019 version of Microsoft Excel, you won’t be able to use this feature at all – you’ll only find it in the newer Excel 2021 version.

Additional apps and services

Screenshot of Microsoft 365 taking advantage of the signup page

Aside from Word, Excel, PowerPoint, and OneNote, with Microsoft 365 you’ll also have access to Skype and OneDrive. With Skype, you get a monthly allowance of up to 60 minutes of international calls. And for OneDrive, you get 1 TB of space for each unique user. So if your family account has six users, you get 6TB of cloud storage.

A 365 subscription also includes Microsoft Access and Publisher when downloaded. So if you are using these apps, you should consider getting 365 instead.

Furthermore, with Microsoft 365, each person can install all of the included Office applications on up to five unique devices from any combination.

So if you have a MacBook, a Windows desktop computer, an iPhone, an Android device, and an iPad, you can install the Office suite on all of these devices without having to pay extra.

Meanwhile, if you have a family plan with six users, you can install all Microsoft 365 apps on up to 30 devices.

More benefits of Microsoft 365

Screenshot of additional Microsoft 365 features and services from the Microsoft website

Apart from the apps and services that you get above, you also get access to many more features. Microsoft 365 allows you to directly embed creative, royalty-free content, including stored images, icons, fonts, templates, and more.

You also get AI-powered tools, such as PowerPoint Presenter Coach, Resume Assistant, Designer, and Ideas. These value-added features make your life easier by using AI to help you get things done automatically.

For example, Word can detect if you’re writing a resume and provide templates for optimizing it. Ideas suggest layouts and images when creating a presentation. Designer helps you choose the format for your Word document and keep it consistent across all pages.

Is Microsoft 365 the best option?

Subscribe or buy one-time stock illustration

After mentioning all the benefits you get with Microsoft 365 over Office 2021, you might think going first is a no-brainer. However, it is not that easy.

If you are the type to keep a computer for two years or more, don’t need cloud storage, and only use the basic functions of Word, Excel, and PowerPoint, then you’re better off using Office 2021. This version is suitable for young students or retirees who don’t use these apps often. They do not usually connect to the Internet.

Professionals with company-provided hardware may also choose the individual purchase option, especially if they do not use these apps outside of their work.

Related: How to cancel a Microsoft 365 subscription and get a refund

However, if you can group at least two users who will subscribe to a Microsoft 365 plan for at least three years, then you’d be better off getting the subscription plan.

That’s because you’ll both spend $150 over three years, which is the same price you’d pay if you got the one-time purchase of Office Home & Student 2021. But with this option, you will get additional benefits, such as cloud storage, international calling and more.

It’s not that simple

Before choosing one over the other because you want all the extra features or don’t like paying for subscriptions, you should sit down and think. Ask yourself, “Which one offers the best value for me?” After all, as with other aspects of life, there is no one-size-fits-all solution.

When you consider your situation, such as what you will use for the office suite, what features you really need, and what other alternatives you have, then you can make the decision that best suits your lifestyle.


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