Currently Microsoft is offering its Microsoft Office in two editions: Office 365 and Office 2016. In this article, I will try to cover the main differences between Office 365 and Office 2016, available versions and editions, and licensing peculiarities, including those when using Office on RDS (terminal) servers.
What is the Differences Between Office 2016 and Office 365?
Office 365 is based on subscription that must be regularly renewed (monthly or annually depending on the selected payment option). The Office 365 license allows you to use the latest Microsoft Office versions and some cloud-based services (Exchange Online, OneDrive, Skype for Business, etc. depending on the subscription type). Thus, a user always has an access to the latest version of the Office suite.
When the subscription expires, a user cannot use Office and is disconnected from the service. In fact, it doesn’t happen suddenly, and the package apps are working for 30 days after the subscription expires (If you install trial version of Office 365, you can extend your Office trial license for up to 5 times.)
You can use Office 365 both on Windows PC and on iOS, Android and MacOS mobile devices and tablets.
Microsoft Office 2016 is purchased once and allows to use this Office package for unlimited period of time. Up to 2020, Microsoft will release security updates for Office 2016, but the purchased license does not let you get the next Office version for free (except for using corporate subscription with Software Assurance). If you want to get the new Office 2019 version, you will have to pay its full price (Microsoft does not provide any discount on Office version upgrade). You can use Office 2016 both in Windows and MacOS.
As you can see, the main difference of Office 2016 and Office 365 is in the way of purchase and renewal method. Office 365 subscription has to be renewed regularly, and Office 2016 license is purchased once and allows to use the product as long as you need it.
Office 2016 Editions and Licenses
There are several editions of Office 2016. Each edition allows multiple users to use Office 2016 on one device. Office 2016 editions differ by cost and list of available apps.
- Office Home & Student 2016 — Word, Excel, PowerPoint, OneNote;
- Office Home & Business 2016 — + Outlook;
- Office Standard 2016 — + Publisher, Web Apps;
- Office Professional 2016 — + Access, InfoPath, SharePoint Workspace.
Office 2016 license comes as:
- a retail license version (as a box FPP license or as an electronic ESD key);
- a corporate license version (Volume licensing): Open License, Open Value, etc., with the ability to purchase Software Assurance. The minimum number of licenses purchased under the corporate license is 5.
Unlike an electronic key, a box license allows to transfer the license to another computer. However, both versions cannot be installed on servers, run on in the RDS environment, rented out, or downgraded to previous Office 2013 or Office 2010 versions.
Corporate Office 2016 licenses are associated with an organization and legally allow a downgrade. When purchasing a Software Assurance two-year license you can upgrading to the new Office version for free. Only when using a corporate license you can legally install Office on your Remote Desktop server. You can also make Office activation in your corporate network easier due to using Volume Licensing keys (VLK) and the possibility to install an internal activation server (KMS). See the articles KMS server for Office 2016 and FAQ: Microsoft KMS Activation.
Office 2016 doesn’t require an Internet connection.
Office 365 Editions, Licensing Features
The cloud version of Office 365 also comes in several editions. Office 365 editions differ by the available apps, the number of devices and the support of additional cloud services.
- Office 365 Home;
- Office 365 Personal;
- Office 365 University;
- Office 365 Business (Essentials, Premium) – up to 300 users;
- Office 365 Enterprise (E1, E3, E5, F1, Pro Plus).
Office 365 licenses are delivered in one of these 2 ways:
- Retail box (FPP) or electronic (ESD) licenses
- Volume licenses
To access Office 365 and renew your subscription, you must make monthly (convenient for students) or annual (cheaper) payments.
Office 365 license is issued per user. It means that one license allows one user to use the product on 5 computers running Windows or MacOS and on 5 mobile devices. Your device with Office 365 installed must connect to Microsoft servers every 39 days. If it does not, the Office 365 apps go into read-only mode.
If you compare the prices of similar licenses of Office 365 Home (99$) and Office Professional 2016 (399$), you can see that Office 365 is 4 times cheaper, but you have to pay it annually.
Office 2016 & Office 365 Licensing on Remote Desktop Servers (RDS)
If you are going to use Microsoft Office suite in the Remote Desktop or VDI environment in order several users can work with one Office copy, please, note the following:
You can start MS Office apps in the terminal environment only when using one of the licenses:
- Office 2016 Standard;
- Office 2016 Pro Plus;
- Office 365 Pro Plus (and other subscriptions included in Office 365 Pro Plus).
When trying to install any other Office version on a Windows Server with the RDS role, the following error appears:
This copy of Microsoft Office 2016 cannot be used on a computer running Terminal Services. To use Office 2016 on a computer running Terminal Services, you must use a Volume License edition of Office
This version of Office should be uninstalled.
If you are using Office 2016 (Standard or Pro Plus), you must to buy as many licenses as the number of devices used to connect to the server with the installed Office (for example, it may be OfficeStd 2016 SNGL OLP NL license). If you purchase Software Assurance, users can connect to your RDS server from their home devices for free (the right to use the product outside the company).
If you have Office 365 Pro Plus, you must buy licenses for all users using Office in the RDP. The example of such a license is O365ProPlusOpen ShrdSvr SNGL SubsVL OLP NL Annual. Office 365 ProPlus must be installed on the RDS server with SharedComputerLicensing option enabled.
When using Office 365 Pro Plus, a user can connect to the Remote Desktop server and use Office 365 on any device.
Obviously, the current marketing policy of Microsoft shows that they prefer cloud-based services. For many reasons, Office 365 may have more benefits for corporate customers than the traditional licensing model.