Office 365 Subscription vs. One-Time Purchase: Which One is Better?

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Having the right tools at your disposal is crucial for the success of businesses today. Microsoft Office, a suite of productivity applications, has been a cornerstone in the business world for decades. However, with the advent of cloud computing and subscription-based services, Microsoft has evolved its offerings, leading to a pivotal question for business owners: should you opt for an Office 365 subscription or stick with a one-time purchase of the software? This article aims to guide you through this decision-making process, focusing on the factors that matter most to you as a business owner.

Types of Microsoft Office Subscription

Types of Microsoft Office Subscription

Generally speaking, Microsoft offers two different types of cloud-powered productivity solutions:

  1. Microsoft 365 Business
  2. Microsoft Office 365

There are subtle differences between the two offerings, which makes choosing between Microsoft 365 and Office 365 subscription plans sometimes confusing, if not a little overwhelming. Generally speaking, Microsoft 365 is for smaller businesses, and Office 365 is designed for enterprise customers.

Here's a simplified guide to help you choose the right plan for your business:

Business Plans (Maximum of 300 Users)

  • Microsoft 365 Business Basic: Ideal for businesses that need easy remote solutions, with Microsoft Teams, secure cloud storage, and Office Online-delivering web-only versions of Microsoft's most popular office productivity apps such as Microsoft Outlook, Microsoft Word, Microsoft Excel, Microsoft PowerPoint, and more.
  • Microsoft 365 Business Standard: Best for businesses that require full remote work and collaboration tools, including Microsoft Teams, secure cloud storage, business email, and the locally-installable versions of all premium Microsoft Office productivity apps.
  • Microsoft 365 Business Premium: This plan includes everything in Business Standard, advanced cyber-security protections, and device management.
  • Microsoft 365 Apps for Business: Designed for businesses that need Office apps across devices plus cloud file storage. Business email and Microsoft Teams are not included.

Enterprise Plans (Unlimited Number of Users)

  • Office 365 E1: Offers services like email, file storage, and sharing, the web-only version of Office productivity apps, the ability to conduct meetings and engage in instant messaging using Microsoft Teams, and more.
  • Office 365 E3: Includes all features of E1 plus compliance tools, information protection, and the full Office desktop app experience for every subscriber.
  • Office 365 E5: This is the most comprehensive plan, with all E3 features plus advanced security, voice, and data analysis tools.
  • Other Enterprise Plans: Including Office 365 F3, Microsoft 365 F1, Microsoft 365 F3, Microsoft 365 E3, and Microsoft 365 E5, each offering varying levels of application install options, cloud-based services, and other business-critical security and administration features.

Microsoft Office for Education and Government

These are specialized plans for educational institutions and government entities, offering tailored services to meet their unique requirements. Microsoft's Office subscription suite offers specialized versions tailored to the distinct needs of educational institutions and government agencies, aligning with the strategic goals of these organizations.

For the education sector, Microsoft presents Office 365 Education at no cost for students and educators in qualifying institutions. This not only represents a significant cost-saving opportunity but also equips the future workforce with essential digital skills. The suite, encompassing tools like Word, Excel, PowerPoint, and Teams, fosters an innovative educational environment. It enables educators to enhance learning experiences, fostering skills that students need in the modern workforce while ensuring a secure, collaborative, and productive educational setting.

Microsoft 365 Government is a solution designed to meet the stringent requirements of U.S. government agencies. This suite is more than just a productivity boost; it's a strategic investment in secure, compliant, and efficient operations. Including Office 365, Windows 10, and advanced security features, it addresses critical needs in data protection and governance. The inclusion of enhanced cyber security features like Advanced Threat Protection and Customer Lockbox ensures that government data is not only secure but also managed in compliance with national standards. This suite is essential for government leaders looking to modernize their agencies, enhance operational efficiency, and ensure the highest standards of data security and compliance.

Both these specialized suites from Microsoft signify not just a technological investment but a strategic asset for leaders in education and government sectors, aligning with their core objectives of efficiency, security, and future readiness.

What Services Are Available In Each Microsoft Office 365 Plan?

Microsoft Office 365 and Microsoft 365 Business subscription plans include a variety of services like Exchange Online, SharePoint Online, OneDrive, and Microsoft Teams. However, the availability of certain features like Microsoft 365 desktop client apps, Project, Power BI, and Azure Information Protection varies depending on the plan. In addition, Microsoft offers businesses the ability to add some of these crucial services (e.g., Exchange Online, SharePoint Online, OneDrive for Business, and more) to plans that do not include them by default at an additional cost.

The Flexibility to Change or Mix Microsoft Office 365 Plans

As your business evolves, so might your needs. Not only does Microsoft enable a business leader to mix and match the add-on services, but the company also allows you to switch or combine different plans within the same service family or even across different service families. This flexibility allows for strategic IT planning that aligns with business growth, department-specific needs, seasonal fluctuations, organizational changes like mergers, global expansion, and evolving compliance and security requirements.

Here are a few examples of the advantages gained by Office 365 subscription plan flexibility:

  1. Adapting to business growth: Imagine your business starts as a small startup with a handful of employees. Initially, you might opt for a basic Office 365 plan that covers essential needs like Word, Excel, and PowerPoint. As your business grows, you hire more staff, including a sales team that needs advanced customer relationship management tools and a marketing team that requires more sophisticated data analysis and communication tools. With a Microsoft Office 365 subscription, you can seamlessly upgrade to more comprehensive plans like Office 365 E3 or E5, which include additional tools like Power BI for data analysis and advanced security features to protect sensitive information.
  2. Customization for specific department needs: Different departments have different needs. For instance, your R&D team might require access to developer tools, which are not necessary for your HR department. With the ability to mix and match add-ons, you can tailor the services to the specific needs of each department. This means you're not paying for unnecessary services for each employee, optimizing your operational costs.
  3. Facilitating mergers and acquisitions: If your company acquires another company or merges with it, there will be a need to integrate different IT systems. With a flexible MS Office subscription plan, you can easily align and combine different services from each company, ensuring a smoother transition and integration of workflows and communication channels.
  4. Remote Work and global expansion: As your business expands globally or moves towards remote work, your IT needs will change. Employees working from different parts of the world or from their homes will require reliable remote access to files and collaboration tools. Office 365's cloud-based services like Teams and OneDrive facilitate this, allowing employees to collaborate in real-time, regardless of their location.
  5. Compliance and security needs: As your business grows, so do the complexities of compliance and security. For industries that handle sensitive data, like finance or healthcare, compliance with regulations like GDPR or HIPAA is crucial. An office subscription plan includes advanced security features and compliance tools, ensuring that your business meets these regulatory requirements without a significant additional investment in IT infrastructure.

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Office 365 Subscription Cost Breakdown

Office 365 Subscription Cost Breakdown

The cost of an Office 365 subscription varies based on the plan you choose. Generally, the pricing is per user per month, offering the flexibility to scale up or down depending on your business needs. For example, the Microsoft 365 Business Basic plan often will cost a small to midsize business customer around $6 per user per month, while the Business Standard is typically around $12.50 per user per month-and sometimes discounted by 15% or more. Microsoft Office subscription cost starts at $10 per user per month for the E1 plan and goes up to $38 per user per month for higher-tier plans. Obviously, the higher-priced plans have more features and options by default compared to the lower-cost plans.

Here is a table summarizing the cost breakdown of Microsoft Office subscription cost differences:


Price per User per Month


Microsoft 365 Business Basic


Basic Office apps, email, and cloud storage

Microsoft 365 Business Standard


Premium Office apps, email, and cloud storage

Office 365 E1


Basic Office apps, email, and cloud storage

Office 365 E3


Premium Office apps, email, and cloud storage

Office 365 E5


Premium Office apps, email, and cloud storage, advanced security, and compliance features

Please note that the above table is not exhaustive and is only meant to provide a brief comparison between the different Office 365 plans. The prices mentioned are subject to change, so it's always best to check with a licensing expert when planning your Microsoft Office 365 subscription purchase.

Microsoft Office 365 Subscription Vs. One-Time Purchase

Microsoft Office 365 Subscription Vs. One-Time Purchase

When it comes to equipping your business with the right tools, Microsoft Office offers two primary paths: the Microsoft Office 365 subscription service and the traditional one-time purchase option. Understanding the differences between these two can help you make an informed decision that aligns with your business needs.

Buying a Microsoft Office 365 Subscription

An Office 365 subscription is more than just a way to get Microsoft Office on your computer. It's a comprehensive service that includes access to regular updates, cloud storage through OneDrive, and various collaboration tools like Microsoft Teams. Here are some key aspects:

  • Regular updates: With an MS Office subscription, you're not just buying a static software package but subscribing to a service that continually evolves. Subscribers receive not only the latest security patches and bug fixes but also new features and enhancements as they are released. For example, subscribers get immediate access if Microsoft introduces a new proofreading tool powered by artificial intelligence for Word or a sophisticated data visualization feature in Excel. This ensures that your software is always enhanced with the latest technology, which can be crucial for maintaining productivity and security.
  • Cloud integration: Office 365's integration with OneDrive and SharePoint cloud storage offers significant advantages in terms of storage and collaboration. This cloud storage makes storing, backing, and accessing files from anywhere easier. For instance, a marketing team can work on the same campaign materials from different locations, with changes synced in real time. This seamless integration facilitates collaboration, version control, and remote working capabilities, which are essential in today's increasingly digital and mobile work environment.
  • Monthly or annual payment: The subscription model allows for flexible budgeting. You can choose a monthly or annual payment plan, which can be particularly beneficial for businesses and individuals who prefer spreading out expenses over time rather than making a large upfront investment. This model also offers the flexibility to adjust your subscription level as your needs change – for example, scaling up as your business grows or scaling down if necessary.
  • Access across devices: One of the significant advantages of an Office 365 subscription is the ability to use the Office apps across multiple devices. This means you can start a document on your PC at work, make edits on your tablet during your commute, and do a final review on your smartphone. This flexibility is ideal for today's mobile and dynamic workstyles, where being able to switch between devices seamlessly is a significant productivity booster.
  • Advanced features: Office 365 subscribers often have access to features that are not available in the perpetual license versions of Office. This can include advanced security features, which are crucial for protecting sensitive data in a business environment, and AI-driven capabilities, like PowerPoint's Designer tool that suggests layout ideas or Excel's Ideas feature that helps identify trends and patterns in your data. These advanced features can significantly enhance productivity and ensure that your work is both secure and at the cutting edge of technology capabilities.

Buying a Microsoft Office Perpetual License (One-Time Purchase)

The Office 365 lifetime subscription (which is a one-time purchase) often referred to as Office 2021 or a similar name, involves paying a single upfront cost to get Office applications for one computer. This option is straightforward but has limitations:

  • No updates: When you purchase a perpetual license version of Microsoft Office, you won't receive new feature updates that are released in later versions. For example, say your organization buys Office 2019 perpetual licenses for all 250 of your employees. If Microsoft introduces a new tool in Office 2021 or later versions, such as an advanced data analysis feature in Excel or a new presentation mode in PowerPoint that would significantly increase your employee productivity, you won't have access to these enhancements unless you purchase 250 more licenses of the new Office 2021. With a perpetual license of Office, you'll only receive essential bug fixes and security updates. This means that over time, your software may lack the latest productivity tools and improvements that others are using.
  • Limited to one device: With a perpetual license for Microsoft Office, the software is tied to a single computer. This can be limiting for users who work on multiple devices. For example, if you have a desktop computer at your office and a laptop you use while travelling, you would need separate Office 2021 licenses for each device, unlike the subscription model for Office 365 Business or Office 365 Enterprise which allow installation on up to five devices at once. Additionally, if your computer crashes or you need to upgrade your hardware, transferring the license to a new machine can be a complex process, often requiring support from Microsoft.
  • No cloud features: The lack of integrated cloud services like OneDrive and Microsoft Teams can be a significant limitation in today's collaborative work environment. For instance, a small business team working on a project might find it challenging to collaborate efficiently without access to real-time document sharing and communication tools available in cloud-connected Office versions. They would have to rely on alternative methods, such as emailing documents back and forth, which can be less efficient and more prone to version control issues.

Table Comparing Pros and Cons of Office 365 vs. Perpetual Licensing


Microsoft Office 365

Perpetual Licensing


Monthly subscription fee, which can be expensive in the long run

One-time payment, which can be cheaper in the long run


Constant updates and support for its productivity software

Security updates every few months


Includes collaborative features and perks that don't come with a standard Office bundle

Everything the perpetual licenses have is available with the Office 365 licenses, but the same can't be said the other way around.


Works on all of your computers and mobile devices

Only works on one computer

New Features

Gets features the minute they are available

Microsoft revises perpetual versions of Office every 18 to 24 months

Top 3 Business Advantages of Choosing an Office 365 Subscription

Advantages of Choosing an Office 365 Subscription

When you choose a Microsoft Office 365 subscription, you're getting the following important benefits:

  1. Scalability and flexibility: One of the biggest advantages of Office 365 is its scalability and flexibility. As your business grows, you can easily add new users or adjust services without significant upfront costs. For example, if you have recently hired more employees, you can add new users to your Office 365 subscription without having to purchase new licenses. Similarly, if you have downsized your workforce, you can remove users from your subscription to save costs.
  2. Always up to date: With an Office 365 subscription, you're always working with the latest version of each application, ensuring compatibility and access to the latest features. This means that you don't have to worry about upgrading your software every few years, which can be a significant expense.
  3. Enhanced collaboration: Office 365 offers superior collaboration tools like SharePoint, Teams, and OneDrive, making it easier for your team to work together, no matter where they are. For example, Teams is a chat-based collaboration tool that allows you to communicate with your team in real-time, share files, and collaborate on projects. Using these collaboration tools can improve communication, increase productivity, and streamline your workflow.

Top 3 Practical Tips for Managing Office 365 Subscriptions Effectively

  1. Regularly review Your subscription plan: As your business grows, your Office 365 subscription needs may change. For example, if you have recently hired more employees, you may need to upgrade your subscription to accommodate the additional users. Similarly, if you have downsized your workforce, you may be able to downgrade your subscription to save costs. Regularly reviewing your subscription plan can help you ensure you are not overpaying for features you don't need.
  2. Train your team: Office 365 offers a wide range of features and tools that can help your team work more efficiently. However, these features can be overwhelming for new users. Training helps any organization make the most of an Office 365 subscription by ensuring that all employees have awareness and understand the value of the features and tools available in Office 365. You can do this by providing training sessions, creating user guides, or even hiring a consultant to help your team get up to speed.
  3. Utilize the admin center: Microsoft built the Office 365 Admin Center as a powerful tool that can help you manage your subscription more efficiently. You can use it to manage users, services, and billing, keeping your subscription streamlined and efficient. For example, you can use the Admin Center to add or remove users, assign licenses, and reset passwords. By using the Admin Center, you can save time and ensure that your subscription is running smoothly.


Choosing between an Office 365 subscription and a one-time purchase of Microsoft Office is a significant decision for any business owner. While a subscription offers flexibility, scalability, and continuous updates, a perpetual license might suit those with minimal needs and a preference for a one-time expense.

If you're still unsure about which option is best for your business, or if you need more personalized advice, we encourage you to connect with the Microsoft licensing experts at Amaxra. Our team can provide tailored guidance to ensure you make the most of your Microsoft Office investment.

Contact Amaxra today and take the first step towards optimizing your business's productivity tools.

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