I see a lot of confusion and misinformation floating around about Office 365 and even though I deal mostly with Outlook, it’s time to write more about the different flavors of Office 365.
There are two sides to Office 365: the original hosted services targeted to businesses – Exchange, SharePoint (website), and Lync (online meetings and messaging service) – and Office 2013. If it’s not confusing enough to use one name for two distinct products, there are two flavors of Office 2013: Home Premium and ProPlus. They are basically the same suites, containing the core Office applications - Word, Excel, PowerPoint, Outlook, Access, Publisher - but ProPlus includes Lync and other features used in corporate settings.
I’m going to start with the consumer product, because this is what most people who are the "decision maker" buy. If you are using Office 365 at work, it's likely your administrator or someone else made the decision (and paid for it).
Office 365 Home Premium
Office 365 Home Premium is available for home use (hence the name “Home”) and includes the full suite of Office products: Word, Excel, PowerPoint, Outlook, Publisher, OneNote, Access (the "Premium" part). The suite is $9.99 a month (or $100/year) and includes 5 licenses (and a few additional perks, including 20 GB of SkyDrive space and 60 Skype minutes a month). This is great for multi-computer families and the licenses include Office 2011 for Mac for mixed-platform families. The license also includes the right to use the Mobile Office version for Android and iPhones, on up to 5 devices. (Windows Phone comes with its own Mobile Office license.)
Home Premium is “rented”. You get to use it as long as you keep your subscription paid up. When the subscription expires, it drops to a read-only state – you can read documents and email but cannot create new. Office will need internet access approximately every 30 days to verify the license. If the license can’t be verified, it drops to read-only.
It’s easy to move the license to a new computer – log into your Office account online and click a link to delete the license assigned to the old computer. The Office suite on the old computer drops to read-only and you can use the freed-up license on a new computer. (If the screen shown in this screenshot is not shown when you log in, click the Install Office link on the upper right, not shown in the screenshot.)
Home Premium also includes a “light” version of Office called Office on Demand. You can use this on any Windows 7 or 8 PC that does not have Office installed. You can use it on the library computer or when visiting your Aunt Hilda (or on a 6th computer at home), assuming Windows 7 or 8 is installed on the PC. It does not use one of your 5 licenses and it does not include Outlook, OneNote, or support VBA or addins. Office on Demand is not available for Mac.
To use it, you log into your Microsoft account and click on My Office (if you don't see the screen shown below), then select the application you need to install on demand. The Office applications are streamed to the PC instead of being permanently installed on the computer. When you close the applications, they are not available to other users of that PC. You must log into your Microsoft account to use Office on Demand.
Home Premium is licensed for non-commercial use. Business are in violation of the license if they use it on company computers or for commercial work. (An Office-only subscription is available for businesses or subscribe to a plan that includes Office 2013 and Exchange email.)
Special pricing is available for college students and companies with volume licenses may participate in a “Home use” program, where their employees can install Office on their personal home computers. Your college or company will have more information on these programs.
There are non-subscription versions of Office 2013 available that have a semi-perpetual license (not rented), however they include a license for one pc only (not one pc + one portable, the common licensing used in older Office suites) and can be transferred only to one new computer. Only the most expensive suite, Office Professional 2013, includes Outlook, Access, and Publisher. These suites do not include Office on Demand.
In most cases, if you have more than 3 computers, the yearly subscription is cost effective over the long term. If you frequently upgrade your computer, it can be a lot less expensive to rent vs buy.
Note: there is no difference between the Office suites, whether you download or buy a boxed copy. All Office 2013 suites available to consumers and small businesses are "click to run". All addins and macros should work with Office 2013, however, some older addins may need to be updated and some macros may include Objects, Methods, Events, or Properties no longer supported.
For more information about Office 365 for consumers and current pricing, see Compare Office Products
Office 365 for Business
The business side has a few more options and include hosted services (Exchange, SharePoint and Lync) with or without Office 2013.
The lowest cost Office 365 Business plan is targeted to users or organizations that own Office 2007, 2010 or 2013 but want to use hosted Exchange email. This is an affordable plan for consumers or small businesses who own their own domain and want to access their email, calendar, and contacts on multiple computers or mobile devices. A slightly more expensive plan includes Lync and SharePoint along with Exchange. (All plans include an onmicrosoft.com email address if you don’t own your own domain, but I highly recommend investing in your own domain name – it’s well worth the current price of approximately $15/year.)
There are small business and enterprise plans available that include Office 2013. These plans include 5 commercial use licenses for one person (unlike Home Premium which is for 5 household computers). Along with the usual Office applications - Word, Excel, PowerPoint, Outlook, Access, OneNote, and Publisher - Lync is included. (InfoPath is included in some subscriptions.) Some business plans include Office on Demand (described above, accessible in SharePoint).
Both the small business and enterprise plans are available to any size business (or consumer), there is no minimum user requirement. I usually recommend the E1 (no Office) or E3 (includes Office) plans for most businesses because of the additional Exchange and SharePoint features (managed mailboxes, mailboxes support secondary SMTP addresses for receiving email, and more).