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Five factors to consider when moving to Office 365

CNET@Work: Making the decision to switch is just the first step. Much more important is choosing the right Office 365 edition.


With technology increasingly intertwined with all aspects of business, CNET@Work can help you -- from prosumers to small businesses with fewer than five employees -- get started.

If your small business is like most, it runs on Microsoft Office.

You're probably also pondering whether it's time to switch from the traditional perpetual-license versions of Office to an Office 365 subscription.

In theory, making that switch offers multiple advantages. You get a predictable cost instead of having to budget for upgrades every few years. You can install Office apps on multiple devices without activation hassles. Continuous updates and improvements remove some of the headaches of having to buy, install and manage upgrades every few years. You also get access to an ever-expanding assortment of cloud-based services.

But making the decision to switch is just the first step. Much more important is choosing the right Office 365 edition. And with more than a dozen editions to choose from, at prices ranging from $4 to $35 per user per month, it's easy to make the wrong decision.

So let's simplify the decision-making process. To get started, let's look at what's in Office 365. Every Office edition includes some combination of the following elements:

  • Traditional Office desktop apps (for Windows or Mac) that are regularly updated so you always have the latest version. Each Office 365 subscription allows you to install those desktop programs on up to five PCs or Macs
  • Exchange Online email
  • 1TB of OneDrive cloud file storage
  • Mobile apps for installation on up to five phones and five tablets, running iOS, Android or Windows
  • Group-based collaboration and communication tools

For the sake of this analysis, we assume your small business has no more than five employees. We also assume that you want access to the Office desktop apps for Windows. That removes many of the options that are designed for deployment in much larger companies that have a full-time IT department.

With those conditions set, you have three broad choices available.

The cheapskate's option: Office 365 Home

If your business is literally a one-person shop, you might be tempted to choose an Office 365 Home subscription over one of the more expensive Office 365 business editions. That decision might even make sense if your requirements are modest enough.

Despite the name, there are no license restrictions to prevent you from using Office 365 Home in a business setting.

Microsoft/Screenshot by Ed Bott/CNET

At $99 a year, each Office 365 Home subscription is tied to a single Microsoft account and gives you access to the full suite of Office desktop programs: Outlook, Word, Excel, PowerPoint and OneNote, with Publisher and Access available on Windows PCs only. It also upgrades the free OneDrive cloud storage associated with your Microsoft account to 1TB and upgrades your free Outlook.com account to a 50GB ad-free mailbox.

You can share this subscription with up to five different Microsoft accounts, each of which gets to install the Office desktop apps and has its own 1TB OneDrive allotment and upgraded mailbox. (For $30 less, you can purchase Office 365 Personal, which limits installation to one PC and one mobile device and can't be shared with others.)

Despite the name, there are no license restrictions to prevent you from using these apps in a business setting.

Who it's best for: Sole proprietors who already have a business email address and simply want convenient access to the latest Office desktop apps on up to five PCs.

The business-class upgrade: Office 365 Business Premium

Each Business Premium subscription costs $150 per year. Like the Home edition, it allows you to install the Office desktop programs on up to five PCs. It also includes Exchange Online email, with a custom domain, 1TB of secure OneDrive for Business cloud storage, and a collection of online collaboration features, including SharePoint and Microsoft Teams. Recent additions also include customer relationship management tools.

The biggest difference between home and business editions start with who manages the account. Each Office 365 Home subscription is managed by an individual user with a Microsoft account. Business and enterprise subscriptions belong to an organization and are managed centrally, with an administrator assigning licenses to users in the organization.

The Business Premium plans include Exchange Online email that is tied to one or more custom domains associated with your business.

Microsoft/Screenshot by Ed Bott/CNET

The Business Premium plans include Exchange Online email that is tied to one or more custom domains associated with your business. You can create email aliases (such as sales@example.com) to make your small business look a bit bigger. (If you just want the Office desktop apps and OneDrive storage but don't need email, consider the Office 365 Business plan at $99 a year.)

Business and enterprise plans include security features you can't get with a Home or Personal subscription, including multifactor authentication, self-service password reset and alerts for security issues such as possible breaches.

Although you can buy one license at a time, the business editions of Office 365 include management tools that are designed for a dedicated IT department or a consultant. If you want to manage your own Business Premium subscription, make sure you're comfortable with technical tasks such as configuring DNS and MX records for your email domain.

Who it's best for: Small businesses that want each employee to have full access to Office desktop apps along with a custom email address associated with the business.

Planning for growth: Office 365 Enterprise E3

Microsoft offers a dizzying menu of options for its enterprise customers, including Office 365 ProPlus ($12 a month), which includes just the desktop programs and OneDrive for Business storage, as well as the Office 365 Enterprise E3 and E5 packages, which bundle online services with those apps.

Although these plans are intended primarily for large corporations, they might make sense for a small business such as a law office or health services consultant that has to comply with industry-specific regulations such as HIPAA. In addition to the services included with a Business Premium plan, the $20-a-month Enterprise E3 plan offers security and compliance tools, such as the ability to place a legal hold on an email account and data loss prevention tools.

An Enterprise subscription also future-proofs your growing business.

Microsoft/Screenshot by Ed Bott/CNET

An Enterprise subscription also future-proofs your growing business. Unlike the Business Premium plan, which limits the total number of users to 300, you can purchase an unlimited number of enterprise licenses and mix and match the ProPlus, E1, E3 and E5 plans. Here, too, the management interface can be daunting and is best left to a professional consultant or a managed service provider.

Who it's best for: Businesses that need to project a professional image with email and file-sharing tied to a custom domain, as well as those who have to comply with industry-specific regulatory requirements.

More information

For more details and comparison charts covering the many Office 365 options, see these pages from Microsoft.

And from our sister sites TechRepublic and ZDNet: