Choosing Between Office 2021 and Microsoft 365

Office 2021 launched alongside Windows 11 in October 2021 as the latest version of Microsoft’s long-running productivity suite. But if you visit the Microsoft website, you will notice that Microsoft 365 is also available. So why does Microsoft offer two versions of the same product? Here is a clear overview of the differences.

One-Off Purchase vs Subscription

Office 2021 is the one-time purchase version of the Office suite. It comes in two editions: Home & Student 2021 and Home & Business 2021. The Home & Student edition includes Word, Excel, PowerPoint and OneNote, whilst the Home & Business edition also includes Outlook and permits commercial use.

Microsoft 365, the subscription-based alternative, is available as Personal or Family. The upfront cost of Office 2021 is higher, but as a one-off purchase you only pay once. With Microsoft 365 Personal, you pay an annual fee. Within roughly two years, a 365 subscription can exceed the cost of Office Home & Student 2021.

However, if you opt for the Microsoft 365 Family plan and share it among six users, it could take nine years or more before the subscription cost matches the price of buying individual Office 2021 licences for everyone.

Classic vs Premium Version

With Office 2021, you receive the 2021 versions of Word, Excel, PowerPoint and Outlook. With Microsoft 365, you receive the continuously updated 365 versions of these applications.

At present, the feature differences are relatively small, especially since Office 2021 is still recent. However, the Classic 2021 version will not receive new features or major updates in the future — what you see today is what you get. The Premium 365 version, on the other hand, receives updates and new features whenever Microsoft releases them.

For example, Excel 365 received the XLOOKUP function in August 2019, but users of Excel 2019 could not access it at all. It only became available in the later Excel 2021 release. For a deeper look at specific version differences, see our comparison of Office 2019 vs Office 2021.

Additional Applications and Services

Beyond Word, Excel, PowerPoint and OneNote, Microsoft 365 also gives you access to Skype (with up to 60 minutes of international calls per month) and OneDrive (1 TB of cloud storage per user). A Family account with six users provides 6 TB of cloud storage in total.

The 365 subscription also includes Microsoft Access and Publisher. If you use these applications, the subscription may be worth considering.

With Microsoft 365, each user can install all included Office applications on up to five different devices in any combination — MacBook, Windows desktop, iPhone, Android phone, iPad. A Family plan with six users supports up to 30 devices.

Further Advantages of Microsoft 365

Microsoft 365 subscribers also benefit from royalty-free creative content such as stock photos, icons, fonts and templates. AI-powered tools like the PowerPoint Presentation Trainer, Resume Assistant, Designer and Ideas help automate everyday tasks.

For instance, Word can detect when you are writing a CV and suggest templates to improve it. Ideas recommends layouts and images for presentations, and Designer helps maintain consistent formatting across your Word documents.

Is Microsoft 365 the Best Choice?

Despite the advantages listed above, Microsoft 365 is not automatically the right choice for everyone. If you keep your computer for two years or more, have no need for cloud storage and only use the basic functions of Word, Excel and PowerPoint, then Office 2021 may be the better option. This is especially true for students or retirees who use these applications infrequently and are not always connected to the internet.

Professionals whose devices are provided by their employer may also prefer the one-off purchase, particularly if they do not use Office applications outside of work.

However, if you can get at least two users to share a Microsoft 365 plan for three years or more, the subscription starts to offer better value. You will spend roughly the same amount as buying Office Home & Student 2021 individually, but you gain cloud storage, international calling and continuous updates. For more detail on how versions compare, our guide to Office 2021 vs Microsoft 365 provides a thorough breakdown.

Making the Right Decision

Before deciding, take a moment to consider which option offers you the most value. Think about what you need the Office suite for, which features are essential and what alternatives exist. If you are looking for advice on the most cost-effective option, read our article on the most economical Microsoft Office licence for businesses.

At Licendi, we offer one-time purchase versions at significantly lower prices than Microsoft, making the investment pay off even faster. Browse Office 2021 Professional Plus to see our current offers.

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