Microsoft 365 vs Exchange Online: Make the Right Choice

7 min readNov 16, 2021


Microsoft 365 and Exchange Online are both products from Microsoft. Often people ask how those products differ from each other. Those questions arise especially when it comes to choosing email services. This post discusses what those products have in common and how to choose the right email solution for your business.

What to Consider When Migrating from On-Premises to Microsoft 365 or Exchange Online

  • Accessing Domain Name System (DNS)
  • Checking Your Network devices
  • Implementing Security Measures
  • Reinstating Your Files After Migration
  • Configuring Anti-Virus Protection

Back up Microsoft 365 data in Exchange Online, Teams, OneDrive for Business and SharePoint Online using the NAKIVO solution. Ensure uninterrupted workflows and near-zero downtime.


Confusion about the Names

Before we compare Microsoft 365 and Exchange Online, let’s go over some terms. For example, ‘Exchange Online’ and ‘Exchange Server’ are often mistaken for the same thing. But are they the same thing? Similarly, there is a question about ‘Microsoft 365’ and ‘Office 365’. Are they different? Let’s shed some light on those questions.

Exchange Online vs Exchange Server

Though Exchange Online and Exchange Server both offer email services, they are not the same thing. Exchange Online and Exchange Server are two different products. Exchange Server is also called Exchange on-premises. To have Exchange Server running in your organization, you need an actual physical server and also a server or client license.

Exchange Online is a Microsoft cloud service that can be accessed from anywhere in the world. You are not required to have a physical server to use Microsoft 365. Microsoft Exchange Online doesn’t require you to have a license. Instead, you are only charged monthly on a per-user basis.

Exchange Online is scalable. It allows you to add and remove users with little effort. With Exchange Online, Microsoft handles your data for the most part. On the other hand, Exchange Server is harder to scale. Scaling Exchange Server involves adding extra servers or resources. With Exchange Server, you are entirely responsible for the security of your data and outage issues. Having an Exchange Server is beneficial when you want to customize your environment and have full control over it. In addition, Exchange Server can show better performance than Exchange Online.

Microsoft 365 vs Office 365

To understand the difference between Microsoft 365 and Office 365, let’s take a look at some history facts. In 2017, a historic event took place. Microsoft united Windows 10 Enterprise with Office 365 Business Premium and Enterprise Mobility and Security (EMS) to release a new product Microsoft 365. Prior to 2020, Microsoft 365 offered Windows licenses and Office 365 suite along with Advanced Threat Analytics, Azure Active Directory, Azure Information Protection, Cloud APP Security and Windows Intune. By the end of the first quarter of 2020, Microsoft rebranded all Office 365 personal and Small Business Plans (SMP) as Microsoft 365. The new Microsoft 365 was an improved version as it had core Office 365 features plus additional applications such as Microsoft Teams, enhanced OneDrive Storage, phone and audio conferencing tools and upgraded version of Microsoft Family Safety. The following Microsoft 365 plans were renamed:

  • Office 365 Personal to Microsoft 365 Personal
  • Office 365 Home to Microsoft 365 Family
  • Office 365 for Business Essentials to Microsoft 365 Business Basic
  • Office 365 Business to Microsoft 365 Apps for Business
  • Office 365 Business Premium to Microsoft 365 Business Standard

Despite the rebranding of Office 365, the solution didn’t cease to exist. Even now Office 365 is available as Office 365 Education, Office 365 Enterprise and Office 365 Government.

Now that we’ve clarified the terms, let’s compare Microsoft 365 and Exchange Online.

Microsoft 365 vs Standalone Exchange Online

Comparing Microsoft 365 and Exchange Online can be tricky because Exchange Online can be a part of Microsoft 365. However, at the same time, Exchange Online is a stand-alone application that can be used without a Microsoft 365 subscription. Let’s take a closer look at both products.

Microsoft 365 is a cloud-based platform that provides real-time collaboration and management services to its clients around the world. Microsoft 365 includes a variety of applications such as Microsoft Outlook, Microsoft Word, Microsoft Excel, Microsoft PowerPoint, OneDrive for Business, SharePoint Online, Teams, Exchange Online, etc.

On the other hand, Exchange Online is a cloud email service hosted by Microsoft. You can use Exchange Online without getting a full Microsoft 365 subscription. Yet, a Microsoft 365 subscription doesn’t always include the Exchange Online app. For example, a Microsoft 365 Apps for Business subscription includes such apps as Outlook, Word, Excel, PowerPoint and OneNote, but not Exchange Online.

Exchange Online offers from 50 GB to unlimited storage space to its clients depending on the type of plan. With Exchange Online, you can store your emails, calendars and contents in the cloud. Exchange Online offers 3 types of plans:

  • Plan 1. Includes 50 GB of storage and allows you to connect a supported version of your Outlook account to Exchange Online. A user-friendly mailbox along with the Focused Inbox feature allows you to track your email with high accuracy and convenience. In addition, Plan 1 enables you to schedule meetings, manage calendars, and access external tasks, conference rooms, etc.
  • Plan 2. Offers 100 GB of storage per user and 150 GB per message. By using this plan, you can also benefit from the call answering service, dial-in interface and auto attendant system.
  • Microsoft 365 Business Standard. Offers all features from Plan 1, plus Microsoft 365 desktop versions of collaboration tools such as Outlook, Word, Excel, PowerPoint, Publisher, Access and web versions of Excel, PowerPoint and Outlook. In addition, you can benefit from 1TB of storage.

Choosing between Microsoft 365 and Exchange Online

Every business has unique needs. Therefore, you need to make a choice based on the current and future needs of your business. Before deciding which solution is best for your organization, consider the following points.

Points to Consider

How Big Is Your Business?

If you have a small business, chances are you don’t need an advanced solution for management and collaboration. Thus, you can simply stick with Exchange Online. Microsoft 365 offers a large number of advanced tools and options that most small businesses won’t find useful. On the other hand, medium-sized companies and large corporations can benefit from the great variety of applications that Microsoft 365 has to offer. Indeed, Microsoft 365 has plenty of state-of-the-art tools that can greatly enhance the workflow of your business.

Do You Collaborate Often?

How much and how closely your organization collaborates matters when it comes to choosing between Exchange Online and Microsoft 365. Even if you have a small business, but the amount of collaboration in your team is intense, opt for Microsoft 365. Applications such as Teams, SharePoint Online, OneDrive for business, Notes and Skype can make communication between your employees much easier and more convenient. Exchange Online is a part of your Microsoft 365 Business plans and Microsoft 365 Enterprise plans. Regardless, you still get the email service. After all, it all comes down to collaboration when making the final choice!

What Type of Business Does Your Company Have?

If your company is focused on customer service or store management, your employees need applications that can help with scheduling, messaging and collaboration in real-time. That’s where Microsoft 365 applications such as Teams, SharePoint Online Skype, OneDrive and OneNote become handy. With the help of those apps, you can have:

  • A data management system
  • Efficient data storage
  • An effective communication solution

However, if your company is heavy on emailing and handling administrative tasks, it’s better to use Exchange Online. Exchange Online has advanced options for tracking and managing your email. And, it also enables administrators to manage employee accounts with high efficiency.

Considering the Cost Involved

Whether you choose Exchange Online or Microsoft 365, the solution price is always an important factor. Here the costs may differ depending on the solution and a type of plan. The following price ranges are available:

The Exchange Online plans are only a couple of dollars apart. The pricier versions add apps such as Microsoft Teams, OneDrive and SharePoint Online.

Handling Migrations

You can transition from Exchange Online or Exchange Server to Microsoft 365 as your needs change. Moving from Exchange Online to Microsoft 365 is not complicated. The transition can open up more opportunities in terms of communication, collaboration and working process improvements. On the other hand, switching data from on-premises to Microsoft 365 is a complex process. When doing so, you should consider multiple factors, such as:

  • Solution reliability
  • Data restructuring issues
  • Retention and encryption policies

When you switch from on-premises to the cloud, there is always a chance of data being lost or becoming corrupted during a transaction. That’s why you should consider backing up your data every time you make the transition.

If you plan to migrate your data to Exchange Online or Microsoft 365 plan, review the email hosting aspects:

  • Review your current email solution
  • Analyze your migration options
  • Avoid incompatibility by using Office 365 or newer


Choose between Microsoft 365 or Exchange Online when selecting an email solution for your business. Exchange Online allows you to store and manage emails, calendars and contents in the cloud. Microsoft 365 offers multiple collaboration tools in addition to Exchange Online tools. Before making a choice, assess your organization’s collaboration and communication needs. But, no matter the choice you make, don’t forget to back up your Microsoft 365 or Exchange Online data at all times to ensure successful recovery in case of data loss, ransomware attacks or natural disasters.

Download the 15-day Free Trial of NAKIVO Backup & Replication to explore the solution’s data protection capabilities including incremental backups, instant recovery, ransomware protection and more. No capacity limitations and no credit card required.





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