The primary one, as you might expect, is that Microsoft Office365 is an online subscription (pay monthly) service, where Office 2016 is an ‘on-premise’ option. So just what is the difference between it and Office 2016? Whereas in the past, with 2003, 2007, 2010 and so on, it was easy to know which version you had, Office 365 (introduced in 2011) changes that. With the release and growing popularity of Microsoft Office’s 365 product, the obvious naming scheme of the past is thrown into some confusion.