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Why use Office 365 if you’re a small business?

Many small businesses are tempted by the Microsoft Office 365 offer of “always up to date, and available from any device”. Sounds reasonable, but let’s unpack the 365 versus Office 2016 argument a little.

First some background. Office 365 runs in the cloud – it isn’t installed on any device. The attraction is that if you lose a PC, your license is still valid, so connect with your replacement device and you’re ready to go. Office 2016 is installed on your PC and if you lose that, you lose your license. With 365 you can use OneDrive which stores your data in the cloud. But there are two cons to that – firstly you need a modicum of discipline to always use OneDrive, but more importantly, if you don’t have an internet connection, you can’t access your data. However, the security issue with 365 is useful – if someone steals a PC with data on it, then that data is at risk. With 365 there should be no data on the PC so you’re safe. Also, if your data is in the cloud there’s no need for backups.

But buying software is not about losing PCs. It’s more about the functions and benefits that your business gets, versus the cost of buying those functions and benefits. And that depends on what your company does. If your people are constantly mobile and use different devices to conduct business, then 365 makes sense. 365 is accessible from any device for the one license. Whereas Office 2016 is installed on one device and only that device. If your business has a lot of meetings or people work from home, then 365 has Skype for Business which has messaging and meetings. While Office 2016 does have Skype for Business capabilities, it requires additional install work and management.

Price is an issue as well. Office 365 has a monthly subscription, while Office 2016 is a once-off purchase. The break-even point comes quite early – 365 subscriptions pass the once-off 2016 price in year four. There are two considerations here: Firstly, 365 is continuously updated, and new features are added regularly. Once you buy 2016, that’s it – the features you buy are those you have for the life of the license, and typically Microsoft supports each version of standalone Office for about 5 years. Secondly, your cashflow will dictate if you can afford a once-off 2016 payment. Say you need 20 licenses at R5 899 – that’s R118 000 you need now. Whereas with a 365 subscription, you’re paying about R2 150 per month, or R25 752 per annum for your 20 licenses.

One final consideration: Complexity and management effort. Once you get beyond about 20 users, managing 2016 licenses becomes a hassle. You must track each one. Also, it’s likely that you have different versions of stand-alone office, which must be upgraded at different times. Office 365 removes all that bother.

Ultimately the choice between cloud connected Office 365 and standalone Office 2016 is a business decision. Can your cashflow afford a once-off payment or will monthly subscriptions be more cashflow friendly? Are your staff on the move or working from home, or are they at your offices? Do you need the latest productivity features, or can you wait for the next standalone release? Do you want your data to be secured in the cloud, or on PCs and laptops?

In my opinion, Office 365 offers more communication and collaboration, is more secure and less hassle from an IT asset management point of view.


Which office productivity software you buy depends on what your staff do and how they do it.

Standalone licenses have an upfront cost, while cloud-based licenses are by monthly subscription.

Office 365 involves much less management hassle than standalone licenses.

Ultimately the choice between cloud connected Office 365 and standalone Office 2016 is a business decision.

Author  – Barbi Goldblatt –  Regional Executive

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