What Microsoft 365 is and who it's for

Microsoft 365 is a subscription service that gives you access to Microsoft Office applications — Word, Excel, PowerPoint, Outlook, and others — plus cloud storage and other tools. You pay a monthly or annual fee and can use the software on your devices as long as your subscription is active. When your subscription ends, you lose access to the applications, though files you created remain yours to download.

Microsoft 365 is different from buying Office once. With a one-time purchase, you own that version forever but never get updates. With 365, you always have the latest version, security patches, and new features as they roll out. The trade-off is that you pay recurring fees instead of a single upfront cost.

The service comes in several tiers aimed at different users: personal plans for individuals, family plans that cover multiple people, and business plans for organizations. Each tier includes different numbers of devices, storage amounts, and features.

Key Takeaways

  • Microsoft 365 requires a monthly or annual payment to stay active; when you stop paying, you can no longer open or edit files in the Office applications, though you can download them in other formats.
  • Personal plans typically cover one person on up to five devices; family plans cover up to six people on up to five devices each.
  • All Microsoft 365 subscriptions include 1 TB of OneDrive cloud storage per person and access to the latest versions of Word, Excel, PowerPoint, and Outlook.
  • You can cancel your subscription at any time, and you will not be charged for the next billing cycle if you cancel before the renewal date.
  • Microsoft 365 works on Windows, Mac, iPad, iPhone, and Android devices, though some features vary by device type.

The different Microsoft 365 plans and what each costs

Microsoft offers several subscription tiers. Microsoft 365 Personal covers one person on up to five devices and costs a set monthly or annual rate. Microsoft 365 Family covers up to six people, each with their own account and storage, on up to five devices per person, at a higher monthly or annual price. Both include the full suite of Office applications and 1 TB of OneDrive storage per person.

Business plans — Microsoft 365 Business Basic, Business Standard, and Business Premium — are priced per user per month and include additional tools like Teams, Bookings, and business email hosting. These are aimed at organizations rather than individuals.

Prices vary by region and change periodically. You can see current pricing on Microsoft's official website. Some retailers and subscription services offer discounts or bundle Microsoft 365 with other products, so prices may differ depending on where you buy.

What you get with your subscription

Every Microsoft 365 subscription includes the core Office applications: Word for documents, Excel for spreadsheets, PowerPoint for presentations, and Outlook for email and calendar. You also get 1 TB of OneDrive storage per person, which is cloud storage you can access from any device. OneDrive lets you save files online, share them with others, and access them if your device is lost or damaged.

Family and business plans include additional features. Family plans give each person their own Microsoft account and storage, so six family members can each have 1 TB. Business plans include Microsoft Teams (for video calls and chat), Bookings (for scheduling appointments), and business-class email hosting. Some business plans also include advanced security and device management tools.

All plans include regular updates and new features as Microsoft releases them. You do not have to buy a new version or pay extra for updates — they arrive automatically as long as your subscription is active.

How to set up and manage your subscription

To start a Microsoft 365 subscription, you visit Microsoft's website, choose the plan that fits your needs, and enter your payment information. Microsoft accepts credit cards, debit cards, and PayPal. After payment, you receive a confirmation email with instructions to download the Office applications or access them online.

You can manage your subscription through your Microsoft account. From there, you can change your payment method, update your billing address, view your renewal date, or cancel at any time. If you cancel before your renewal date, you will not be charged again, though you can continue using the software until your current subscription period ends.

If you have a Family plan, the account owner can manage which family members have access and can remove people from the plan if needed. Each family member signs in with their own Microsoft account to use the software and access their own OneDrive storage.

What happens when your subscription ends

When your subscription expires and you do not renew, you lose the ability to create or edit documents in Word, Excel, PowerPoint, and Outlook. Files you created remain yours — you can download them in standard formats like .docx, .xlsx, or .pptx — but you cannot open or edit them using Microsoft 365 unless you reactivate your subscription.

If you reactivate your subscription later, all your files and settings are restored. Microsoft keeps your OneDrive files for a period of time after your subscription ends, though the exact timeline depends on your account type and Microsoft's current policy.

If you want to keep using Office applications without a subscription, you have alternatives. You can buy a one-time license for Office (older versions are sometimes available at lower cost), or you can use free online versions of Word, Excel, and PowerPoint through Office.com if you have a Microsoft account.

Devices, compatibility, and offline use

Microsoft 365 works on Windows PCs, Macs, iPads, iPhones, and Android phones and tablets. Personal plans allow installation on up to five devices, and Family plans allow up to five devices per person. You can switch which devices you use — if you get a new computer, you can deactivate the subscription on your old one and activate it on the new one.

The Office applications work offline. You can create and edit documents without an internet connection, and changes sync to OneDrive when you reconnect. Some features, like real-time collaboration with others, require an internet connection.

The web versions of Word, Excel, and PowerPoint (accessible through Office.com) work in any web browser and do not require installation. These versions have fewer features than the desktop applications but are free if you have a Microsoft account. Microsoft 365 subscribers get the full desktop versions with all features.

Frequently Asked Questions

Can I use Microsoft 365 on more than five devices?

No. Personal plans are limited to five devices, and Family plans allow five devices per person. If you need more devices, you would need to purchase additional subscriptions or use the web versions of Office, which do not count against the device limit.

What happens to my files if I cancel my subscription?

Your files remain yours. You can download them in standard formats like .docx or .xlsx and open them with other software. You cannot edit them in Microsoft 365 applications unless you renew your subscription, but the files themselves are not deleted.

Is Microsoft 365 the same as Office 365?

Microsoft rebranded Office 365 to Microsoft 365 in 2020. If you have an older subscription called Office 365, it is the same service and works the same way. The name changed, but the product and pricing remained largely the same.

Can I share my Family plan subscription with people who do not live with me?

Technically, yes — you can add anyone to your Family plan as long as you have room for them. However, Microsoft's terms of service state that Family plan members should be part of the same household. Sharing with people outside your household may violate those terms, though enforcement is unclear.

Do I need an internet connection to use Microsoft 365?

You need an internet connection to download and install the applications and to activate your subscription. After that, you can use Word, Excel, and PowerPoint offline. However, some features like real-time collaboration and cloud storage sync require an active connection.