Microsoft 365 and Office 365: Microsoft’s Confusing Branding

The recent 10^th anniversary of the launch of Office 365 brought some questions about the demarcation between Office 365 and Microsoft 365. For instance, do I have an Office 365 tenant or is it a Microsoft 365 tenant? Is a feature part of Microsoft 365 or does it belong to Office 365? And why does Microsoft insist on calling its desktop Office apps Microsoft 365 Apps for enterprise? Welcome to the bizarre world of branding, and that’s before throwing Windows 365 into the mix.

Like any other publication which covers Microsoft productivity and collaboration technology (a wide enough spectrum), we struggle with when to say Office 365 and when it’s time to switch to Microsoft 365. To begin, we can say:

• Office 365 is the cloud ecosystem for Microsoft Office servers (Exchange Online, SharePoint Online, and Skype for Business Online), including components like Azure AD and Teams, all included in the Office 365 license plans like Office 365 E3 and E5. Microsoft targets these plans at enterprise customers.
• Microsoft 365 is the wider ecosystem for Microsoft cloud productivity which includes areas like Information Governance, Information Protection, Compliance, and Viva. Although some Microsoft 365 functionality is covered by the Office 365 E5 plan, many features need additional licenses. For instance, Viva Topics is based on SharePoint Online, but to use Topics, you need additional per-user licenses.

For the purpose of accounting, Microsoft divides Office 365 into commercial (the enterprise services) and consumer (subscription versions of Office desktop) and reports separate numbers for revenue and user base for each segment (see the transcript of Microsoft’s Q4 FY21 results).

Muddy Waters

Microsoft muddies the water by selling a range of Microsoft 365 plans tailored for small to medium organizations that include elements of the Office 365 plans. The range of Office 365 plans designed for consumer use (covering the desktop Office applications) were redesignated as Microsoft 365 in April 2020.

The problem didn’t exist when Microsoft launched Microsoft 365 in July 2017. At that time, Microsoft 365 was a bundle to allow enterprise customers to buy:

• Office 365 Enterprise (E3 and E5).
• Enterprise Mobility and Security.
• Windows 10 Enterprise.

The packaging provided popular, and many customers moved from Office 365 plans to Microsoft 365 plans. The success encouraged Microsoft to apply the Microsoft 365 brand more liberally, including changing the Office Pro Plus subscription desktop applications to become Microsoft 365 Apps for enterprise. At times, it seemed like any new product ended up with a Microsoft 365 prefix. Such is the nature of a broad-brush rebranding exercise.

Lines of Demarcation

After that leadup, here’s the current situation boiled down into a bulleted list:

• Office 365 is a license plan chiefly sold to enterprise customers.
• Office 365 enterprise services like Exchange Online, SharePoint Online, Teams, Planner, and OneDrive for Business run inside a Microsoft 365 tenant.
• Tenants using Office 365 enterprise services can license optional Microsoft 365 capabilities like Information Governance and Information Protection.
• Tenants can also license other Microsoft cloud services not branded as Microsoft 365, such as Viva Topics, SharePoint Syntex, and Microsoft Cloud App Security.
• Office 365 enterprise services consume many other parts of the Microsoft cloud infrastructure like Azure Key Vault and Azure Active Directory. In fact, Teams consumes many Azure microservices.
• Apart from being a branding strategy, Microsoft 365 is also a licensing strategy spanning plans targeted at consumer, SMB, and enterprise accounts.

All of which means that when we mention Office 365 in an article, we’re usually talking about the capabilities covered by the Office 365 E3 and E5 plans. When we discuss optional components not covered (or partially covered) in those plans, we are specific as in Microsoft 365 Compliance or Microsoft Information Protection.

This is probably clear as muck, but it’s as close to clarity and precision as you’re going to get in a situation where Microsoft applies the Microsoft 365 moniker so liberally in so many ways while leaving the Office 365 plans intact.