Microsoft 365 is a monthly or yearly subscription that gives you access to Office apps, cloud storage, and email

Microsoft 365 (formerly called Office 365) is a subscription service, not a one-time purchase. You pay a recurring fee — monthly or annually — and in return you get the right to use Word, Excel, PowerPoint, Outlook, and other Office applications on your devices. The subscription also includes OneDrive cloud storage, Microsoft Teams for video calls and messaging, and Outlook email with a custom domain option on some plans.

The key difference from buying Office outright: you do not own the software. When your subscription ends, you lose access to the apps and your files stay in the cloud but you cannot edit them in Office. If you stop paying, you can still view your files in OneDrive but cannot open them in Word, Excel, or PowerPoint.

Key Takeaways

  • Microsoft 365 plans range from personal use (Microsoft 365 Personal) to household sharing (Microsoft 365 Family) to business and enterprise tiers, each with different app access and storage amounts.
  • You can use Microsoft 365 on Windows, Mac, iPad, iPhone, and Android devices, but the number of devices you can install on depends on which plan you buy.
  • All plans include OneDrive cloud storage, but the amount varies — Personal and Family plans include 1 TB per person, while business plans vary by tier.
  • Your files stay in OneDrive even after your subscription ends, but you cannot edit them in Office apps unless you renew or buy a standalone license.
  • Microsoft 365 is cheaper over time than buying Office once if you use it for more than three to four years, but the upfront cost is lower with a one-time purchase.

The main Microsoft 365 plans and what they cost

Microsoft offers several versions aimed at different users. Microsoft 365 Personal is for one person and costs a set amount per year or month. Microsoft 365 Family covers up to six people in one household, each with their own account and storage, and costs more than Personal but less per person. Both include the full Office suite, 1 TB of OneDrive storage per person, and access to Microsoft Teams.

For small business and enterprise, Microsoft offers Microsoft 365 Business Basic, Business Standard, and Business Premium, each adding more features like advanced security and device management. Pricing and features vary by plan and by region. There is also Microsoft 365 Apps for enterprise, which is Office apps only without email or Teams, aimed at large organizations.

Prices change and vary by country. The best way to see current pricing is to visit Microsoft's website directly or check what your employer or school offers — many provide Microsoft 365 as part of employment or enrollment at no extra cost to you.

How many devices you can use and what that means

Personal and Family plans let you install Office on multiple devices, but the exact number depends on the plan. Personal typically allows installation on one device at a time, though you can move it to another device if needed. Family allows each of the six household members to install on multiple devices — usually up to five devices per person.

The catch is that you can only be signed in and actively using Office on a limited number of devices at once. If you install on your laptop, tablet, and phone but try to open Word on all three at the same time, you may be asked to sign out on one of them. This is Microsoft's way of preventing one subscription from being shared widely.

Business plans have their own device limits based on the tier. If you are unsure whether your use case fits, Microsoft's website lists the device limits for each plan clearly.

OneDrive storage and what happens to your files

Every Microsoft 365 subscription includes OneDrive cloud storage. Personal and Family plans give you 1 TB per person — that is roughly 1,000 gigabytes, enough for thousands of documents, photos, and videos. Business plans vary: Business Basic includes 1 TB, while higher tiers may offer more or unlimited storage depending on your organization's setup.

Your files stay in OneDrive even after your subscription ends. You can still view them, download them, and share them. What you cannot do is edit them directly in Word, Excel, or PowerPoint. If you want to edit them again, you either renew your subscription or buy a one-time Office license (like Office Home & Student or Office Home & Business).

This matters if you have years of documents stored in OneDrive. Cancelling your subscription does not delete them, but it does lock you out of editing them unless you pay again.

Microsoft 365 versus buying Office once

Microsoft also sells Office as a one-time purchase — Office Home & Student and Office Home & Business are the main options. You pay once, install on one device, and own it forever. No monthly bill, but also no cloud storage, no Teams, and no automatic updates to new versions.

The subscription model costs less per year but adds up over time. If you use Office for three to four years, the total cost of a subscription usually exceeds a one-time purchase. If you use it for longer, the subscription becomes cheaper. The subscription also gives you the latest features and security updates automatically, while a one-time purchase stays at the version you bought.

For most home users, the choice comes down to: Do you want the latest features and cloud storage, or do you want to pay once and own it? For business users, subscriptions are standard because they include email, Teams, and security features that one-time purchases do not.

How to cancel or pause your subscription

You can cancel Microsoft 365 at any time through your Microsoft account settings. If you paid for a year upfront, Microsoft does not refund the unused portion in most cases — check your region's refund policy. If you pay month to month, your subscription ends at the end of that month.

Some people pause their subscription instead of cancelling if they know they will need it again later. You can reactivate it whenever you want, and your files in OneDrive remain untouched. The subscription will not auto-renew while paused, so you will not be charged.

Frequently Asked Questions

Can I use Microsoft 365 offline?

Yes. Once you install Office on your device and sign in, you can use Word, Excel, and PowerPoint offline. Your files sync to OneDrive when you reconnect to the internet. Some features that depend on the cloud — like real-time collaboration — work only when you are online.

What happens if I do not renew my subscription?

Your subscription ends and you lose the right to use the Office apps. Your files in OneDrive stay there and you can view and download them, but you cannot edit them in Word, Excel, or PowerPoint. You can renew at any time and regain editing access.

Does my employer or school provide Microsoft 365?

Many do. If you work for a company or attend a school that uses Microsoft 365, you may have a subscription included at no cost. Check with your IT department or school email provider. Using a work or school account is separate from a personal subscription.

Can I share my Microsoft 365 Family subscription with people outside my household?

Microsoft 365 Family is intended for household members only. Sharing with people outside your home violates the terms of service. If you want to share Office with others, you would need separate subscriptions or a business plan designed for team collaboration.

Is Microsoft 365 the same as Microsoft Office?

Not exactly. Microsoft Office refers to the apps themselves — Word, Excel, PowerPoint. Microsoft 365 is a subscription service that includes those apps plus cloud storage, email, and Teams. You can buy Office as a one-time purchase without a subscription, but Microsoft 365 is always a subscription.