Office 2021 LTSC or Office 365? Which Office suite is right for your organization?

If you are just deciding which Microsoft office suite to buy for your organization, you are reading the right article. The main difference between Office 2021 and Office 365 is the way it is licensed. Office 2021 (as well as older versions, Office 2019 or Office 2016) are licensed under on premise licensing model, while Office 365 is a cloud service. The method of licensing determines the differences in software ownership, costs, updates, maintenance and, last but not least, data protection.

On-Premise

On-premise software is installed locally on computers and servers in the organization, which means that the company has complete infrastructure under its ownership. It maintains its own control over its data and information, making the on premise solution more secure. All updates, security, and maintenance are managed by the organization. The purchase is made on a one-off basis when purchasing the software, which initially represents a large capital investment. However, the total cost of ownership over the entire product lifecycle is much lower compared to cloud solutions.

Benefits

Lower costs if the entire product life cycle is taken into account
Complete ownership
Complete control over the data
Independence from internet access

Disadvantages

Initially higher capital investments
Responsibility for maintenance
Responsibility for safety

Cloud

The cloud software is hosted on the software manufacturer's server infrastructure and all processes related to maintenance are regulated and performed by the cloud service provider. It is an outsourced service, so third parties might have access to your data. Access to the internet is essential for direct usage of cloud services. The customer does not pay a large initial investment, but rather a monthly or annual payment, behind which the vendor-lock is hidden (if you do not pay, you cannot use the service). Setup, update, maintenance, and operation tasks fall under the cloud host.

Benefits

Access from anywhere
No worries about maintenance
Easier scalability

Disadvantages

Long-term high costs
Higher TCO costs compared to on-premise solutions
Internet access required
Loss of control over company data
Third party access
Vendor-lock

Office 2021

Office 2021 is most probably the latest version of perpetual/on premise Microsoft Office Suite. Microsoft offers two editions for organizations under volume licensing programs, Office LTSC Professional Plus 2021 and Office LTSC Standard 2021 with software support period until October 2026. It's a great choice for commercial customers who still want to use perpetual Office suites. It is also useful for organizations that cannot receive updates or do not have Internet access.

Microsoft 365

Microsoft 365 is a subscription-based cloud service. For smaller commercial customers with up to 300 users, Microsoft offers cloud service plans in editions Business Basic, Business Standard and Business Premium (up to 300 users per organization per plan). For larger organizations, Microsoft offers next products: Office 365 E1, Office 365 E3 and Office 365 E5. Thanks to the prepaid service, organizations have up-to-date versions of all included applications.

Which office suite is right for your organization?

The answer is ambiguous. It depends on the size and needs of your organization, so it's important to consider all of the following factors:

Acquisition cost and TCO
Data security
Software and data ownership
Functions and their updates
Software management options

Significant software cost savings can be achieved by choosing alternative methods of purchasing Microsoft Office Suite.

Cheaper Microsoft Office acquisition options

The first option, which combines on-premise and cloud solutions, is the so-called hybrid-licensing model. The use of both products guarantees a cost-effective solution comparing to more expensive higher pure cloud plans. The connection brings benefits from both worlds and provides all the necessary features tailored to your organization needs.