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Microsoft Office 365, as with the previous versions, you can get Word, Excel, PowerPoint and more as a locally installed suite of applications or as Office 365, a cloud-based subscription. However, choosing between Office desktop software and the new Office 365 is a dramatically different decision than in the past. Microsoft has significantly stacked the deck to favor one over the other.

There is a clear distinction between the two options. Office describes only the desktop applications. By contrast, Office 365 is a web-based platform that pairs the Office applications with cloud storage. In the past, though, the Office 365 versions of the software had limited features and capabilities compared to the full desktop versions, and if you didn’t have an internet connection you didn’t have Office.

With the new version of the productivity suite though, Office vs. Office 365 is a smoke-and-mirrors debate. Office is more expensive than Office 365, and the license is only good for one machine. If you only need the core applications (Word, Excel, PowerPoint, and OneNote) you can get Office Home & Student. Throw in Outlook, and you get Office Home & Business. Office Pro adds Access and Publisher.

Office 365 comes in two versions: Office 365 Home Premium and Office 365 Small Business Premium. Both come with the full Office Pro software for your PC, but there are key differences. Up to five people can use Office 365 Home Premium on up to five devices, with each user getting an Office experience customized to their own Microsoft ID.

Office 365 Small Business Premium also comes with five licenses, but billed per user per year. Each user can install and use Office on up to five PCs, but the licenses can’t be shared with other users. Office 365 Small Business Premium also includes a managed Microsoft Back Office environment including Exchange, SharePoint, and Lync.

Depending on how many computers and devices you want to install Office on through Office 365, and which version of Office you’re comparing to, it will take somewhere between two to twenty years for Office to become the more affordable choice.

The only scenario that truly makes sense for Office is if you only need the software in Office Home & Student, and only on a single PC. In that case, you can spend the one time fee and be done. Once you throw in a second PC, though, or if you need the additional tools like Outlook, Access, or Publisher, the math is heavily skewed in favor of the Office 365 subscription.

Microsoft office 365

The beauty of Office 365 is that you get more than just Office for your money—it also comes with benefits that Office 2013 lacks. It comes with an additional 20GB of SkyDrive storage and 60 minutes per month of international Skype calls. Office 365 also has a feature called Office On Demand that enables you to stream virtual versions of the full desktop software to any Windows 7 or Windows 8 PC.

But, even for other platforms or mobile devices there are Web-based versions of the Office applications, and as long as you store your files in SkyDrive you can access them seamlessly from virtually any Web-connected device. The world doesn’t end if your laptop is stolen or destroyed, and you can still edit a crucial client presentation even if you don’t have your PC with you.

Even if you only need the applications in Office 2013 Home & Student, it would cost a lot of money to put that software on five machines, and it would take years to break even on the cost of the Office 365 subscription. By that time, there will be a new version of Office (or two, maybe three). If you buy Office Home & Student, you’ll still have it in the year 2020. But, if you subscribe to Office 365 you will always have the most current version of Office available.

Microsoft has set things up so that the decision is already made. You are free to purchase the standard versions of office, but Office 365 has very clear advantages, and it makes more sense financially in almost every scenario.

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