Microsoft licensing · Module 3

Microsoft 365, Office 365, or Office LTSC—
what is the difference?

Microsoft 365, Office 365, and Office LTSC sound similar, but they are not the same. They differ in which programs are included, whether payment continues, and whether the licence belongs to a person or a device.

Updated: 20 August 2026Reading time: about 7 minutesOfficial Microsoft sources

In brief

Subscription, program bundle, or permanent Office licence—here is the difference.

Some offers combine email, Office programs, and cloud services. Others mainly provide the applications or a permanently licensed Office version.

01Microsoft 365 can combine programs, services, and protection
02Office 365 focuses on productivity and collaboration
03Microsoft 365 Apps provides Office programs by subscription
04Office LTSC is usually licensed permanently per device

Explained simply · The essential terms

Similar names do not mean identical products

Microsoft 365, Office 365, and Office LTSC can include similar programs. Their features and licensing rules still differ.

Microsoft 365

A package of programs and services that may also include security and management capabilities, depending on the plan.

Office 365

A package focused mainly on email, collaboration, and Office applications.

Office LTSC

A fixed Office version typically licensed permanently for a specific device.

A practical example: One person needs Outlook, Word, and online collaboration. Another workstation needs a permanent Office version without a continuous stream of new features. Those situations can require different products.

01 · The four terms

The same apps do not mean the same scope

Word, Excel, and PowerPoint can appear in several offers. That does not mean Exchange, Teams, Windows, or security capabilities are also included.

MICROSOFT 365

The broader suite

Microsoft 365 combines productivity apps and cloud services with further identity, device management, security, or Windows capabilities—depending on the specific Business, Enterprise, Frontline, or Education plan.

OFFICE 365

Productivity and collaboration

Office 365 bundles services such as Exchange Online, OneDrive, and SharePoint and—depending on plan—desktop apps and Teams. Windows Enterprise and the broader EMS layer are not automatically part of an Office 365 suite.

MICROSOFT 365 APPS

Desktop apps by subscription

Microsoft 365 Apps provides continuously updated desktop apps. On its own it is not a complete communications suite: Exchange Online, SharePoint, or Teams require an appropriate suite or separate licences.

OFFICE LTSC 2024

Fixed release, perpetual right

Office LTSC is available to volume licensing customers as perpetual, device-based software. It receives security and quality updates but no continuous stream of new cloud features or rights to future major releases.

02 · Direct comparison

Separate subscriptions from perpetual software

The table shows the core model. The exact plan and current Product Terms remain authoritative.

Offer	Right	Typical metric	Cloud services	Feature updates
Microsoft 365	Subscription	Usually User SL	Broad, depending on plan	Continuous during subscription
Office 365	Subscription	User SL	Core component	Continuous; desktop apps only in qualifying plans
Microsoft 365 Apps	Subscription	User by default; special Device offers	Not a full service suite	Continuous
Office LTSC 2024	Perpetual licence	Device	Not included	Security and quality, no new features

A perpetual licence does not automatically include the next major release. Subscription rights generally end when the term expires unless renewed.

03 · User or device

Installation count does not replace the licence metric

Microsoft 365 Apps is frequently misunderstood. The key is who receives the licence and who actually uses the software.

USER-BASED

One licence for one named user

Under standard user-based licensing, the licensed user may activate Microsoft 365 Apps on up to five PCs or Macs, five tablets, and five smartphones. It does not license five different people.

SHARED COMPUTER

Shared device, licensed users

Shared Computer Activation supports shared machines and RDS scenarios. Every user accessing the apps needs a qualifying plan and signs in with their own account.

DEVICE-BASED

Special device offers

Microsoft also offers Microsoft 365 Apps per device in specific Commercial and Education scenarios. This is a special SKU with prerequisites, not a freely interchangeable option for every subscription.

OFFICE LTSC

The device is the licensing basis

Office LTSC is assigned to the licensed device. Multiple people may use that device; additional devices require additional licences, subject to the applicable agreement terms.

04 · Check Teams precisely

‘Microsoft 365 E3’ is not enough without the exact SKU

Since 1 November 2025, Microsoft 365 and Office 365 Enterprise suites with Teams have again been available worldwide to new and existing customers. Versions without Teams continue to exist.

Always check the order description:

A suite may be ordered ‘with Teams’, ‘no Teams’, or as an EEA variant. A separate Teams licence may be required with a no-Teams suite. Historical orders and existing rights should not be inferred from today’s product name alone.

05 · Suite, service plan, or add-on

The product name is only the first layer

A defensible licensing assessment connects the bundle, included components, and prerequisites.

SUITE

Bundled offer

A suite combines multiple Online Services and sometimes software rights. Components differ across Business, Enterprise, Frontline, and Education, and across E1, E3, E5, or other plans.

SERVICE PLAN

Technical component

Individual service plans appear inside a licence in the admin centre. Technically enabling or disabling one does not by itself change the purchased bundle or its contractual prerequisites.

ADD-ON

Extension with a base requirement

Add-ons extend a qualifying base offer. Check the required base licence, target users, purchasing channel, and any regional restrictions before assignment.

06 · Practical check

Six questions before selecting a product

The most economical option is the one whose rights match actual use—not automatically the offer with the lowest unit price.

01Are only desktop apps required, or also email, files, collaboration, and other cloud services?
02Does the organisation need device management, identity and security capabilities, or Windows rights?
03Should the software receive continuous new features, or run as a fixed release?
04Do users work on personal, multiple, or shared devices?
05Is Teams included in the exact SKU, licensed separately, or not required?
06Which base licence and prerequisites apply to planned add-ons?

Remember

Define the need and licence metric first—then choose the SKU.

Microsoft 365, Office 365, Microsoft 365 Apps, and Office LTSC may contain the same familiar apps. What matters is the suite scope, cloud services, term, user or device basis, and exact order description.

Primary and official sources

Current, verified, and traceable.

The statements were checked against official Microsoft sources as of 20 August 2026. Product scope, availability, and terms may change; the exact SKU, agreement, and applicable Product Terms govern.

Note: This article provides accessible professional guidance, not legal or individual licensing advice. The applicable agreements, orders, and Product Terms govern.