This is what got me fed up recently with contracts. I ended up cutting and running from att as paying 85 dollars a month for phone service I don't use heavily, and data usage I don't use heavily (the most I've ever used was about two out of three gigs, that was one time, I usually do about 1.5 gigs) and pay more for that than I do, literally than a two tanks of gas or a tank of gas and my home internet bill. So I'm doing prepaid for now on, I'll be saving about 600 dollars every two years versus contracts.
Office 365 is Secure, Anywhere Access to Your Online Office and this System Requirements for Office 365, I'm rather perplexed as to what Office 365 really delivers.
Basically, the simplest explanation I've come across is basically you have the Office 2013 apps installed on your PC, except you pay a year long subscription service to use that on five different PCs, and you get free software updates with it. You will get I think 25 gigs of SkyDrive storage or I think it was 25 gigs of Outlook email storage for small businesses or some such. You have access to the Office Web Apps as well.
The branding is just weird. If you buy Office 2013, you're basically buying just the software suite to use infinitely until you die as normal. Office 365 is like buying the 2013 suite, except you use it on five PCs for about 100 dollars a year depending on your usage scenario/environment. The year long subscription will expire, which will require a renewal. You'll have a 30 day grace period to renew. I think the Office apps, if they're not renewed, will just become document readers.
If you want a definitive benefit, it's the pricing that is the best thing there. If you install Office on several PCs that you use, this will end up saving you gobs of money in the long run, considering if you update your Office version each time there is an updated one.
The way I read it is that you need at least Office 2007 installed, before you can subscribe to Office 365. This seems to be reinforced by the following:
Also, if you don't have a suitable version of Office already installed, all you can get is online Office, which are basically web apps (like Chrome):Office 365 adds more power to the Office you already know and use by making it easier to communicate and collaborate with others.
You can use Office 365 with many versions of Office or even without Office on your computer. Select Office 365 plans include subscriptions to the latest version of Office.
Office Web Apps Brings Microsoft Office Online - Office 365