“Office 365” refers to subscription plans that include access to Office applications plus other productivity services that are enabled over the Internet (cloud services), such as Lync web conferencing and Exchange Online hosted email for business, and additional online storage with SkyDrive and Skype world minutes for home.
Many Office 365 plans also include the desktop version of the latest Office applications, which users can install across multiple computers and devices. The Office 365 plans that are online-only are a great choice for certain business needs, and they are compatible with desktop versions of the latest version of Office, Office 2010, Office 2007 (with slightly limited functionality), Office 2011 for Mac, and Office 2008 for Mac. All Office 365 plans are paid for on a subscription basis, monthly or annually.
“Microsoft Office” is the name we still use for our familiar productivity software. Office suites have traditionally included applications such as Word, Excel, PowerPoint, and Outlook. All the new Office suites (for example, Office Standard 2013) include the latest versions of these applications. These suites can be installed on only one PC and do not come with any cloud-based services included in Office 365.