MS-900Chapter 6 of 104Objective 2.4

Microsoft 365 Apps

This chapter covers Microsoft 365 Apps—the subscription-based version of Microsoft Office that is a core component of Microsoft 365 plans. For the MS-900 exam, understanding the differences between Microsoft 365 Apps and traditional perpetual Office versions, deployment options, licensing, and update channels is critical. Approximately 10-15% of exam questions touch on this topic area, often testing your ability to identify correct deployment methods, licensing requirements, and feature availability across plans.

25 min read
Intermediate
Updated May 31, 2026

The Office Building with Modular Furniture

Imagine a large office building with 10,000 employees, each needing a desk, chair, computer, phone, and filing cabinet. Instead of buying and maintaining all that furniture themselves, the company leases a fully furnished building from a provider. The provider guarantees that every desk has the same standard equipment, updates the computers every two years, and replaces broken chairs within 24 hours. Employees can move to any empty desk in the building and find the same setup. The company pays a monthly fee per employee, covering all furniture, maintenance, and upgrades. This is exactly how Microsoft 365 Apps work: instead of purchasing perpetual licenses for Office 2019 and managing installations, updates, and support in-house, organizations subscribe to a service where Microsoft provides the software, delivers updates via the cloud, and ensures consistent features across devices. Employees can install Office on up to five devices (PC, Mac, tablets, phones) and get the same experience. The subscription model includes always-up-to-date apps, cloud storage via OneDrive, and enterprise-grade security—just like the building management handles all furniture logistics.

How It Actually Works

What Are Microsoft 365 Apps?

Microsoft 365 Apps (formerly Office 365 ProPlus) is the subscription-based version of Microsoft Office that is included with most Microsoft 365 business, enterprise, and education plans. Unlike the traditional perpetual versions (e.g., Office 2019, Office 2021), Microsoft 365 Apps are licensed on a per-user per-month basis and are updated regularly with new features, security patches, and performance improvements. The software is installed locally on the device but leverages cloud services for activation, updates, and some functionality (e.g., real-time co-authoring, AI-powered features).

Why Microsoft 365 Apps Exist

Microsoft introduced Microsoft 365 Apps to address several limitations of perpetual Office: - Feature stagnation: Perpetual Office versions receive only security updates, not new features. Microsoft 365 Apps receive new features multiple times per year via feature updates. - Deployment complexity: IT admins had to manually deploy and patch each version. Microsoft 365 Apps can be deployed from the cloud with Click-to-Run, reducing overhead. - Licensing flexibility: Perpetual licenses are tied to a specific device and version; Microsoft 365 Apps licenses are tied to the user, allowing installation on up to 5 devices (PC, Mac, tablets, phones). - Security: Microsoft 365 Apps receive continuous security updates, while perpetual versions have a fixed support lifecycle (10 years mainstream + extended support).

How Microsoft 365 Apps Work Internally

Microsoft 365 Apps use Click-to-Run technology, which is a streaming and virtualization technology that replaced Windows Installer (MSI). Here's the step-by-step mechanism:

1.

Installation: When a user installs Microsoft 365 Apps from the Office Portal or via a deployment tool (e.g., Office Deployment Tool), the installer downloads a compressed package (approx. 1-3 GB) from Microsoft's CDN. The installation is per-machine or per-user, depending on the configuration.

2.

Activation: Upon first launch, the app contacts Microsoft's activation servers via HTTPS. It sends a signed token containing the user's license information (derived from their Azure AD identity). The server validates the token against the tenant's subscription. If valid, the app is activated for 30 days (online activation). The app also stores a local activation cache.

3.

Updates: The Microsoft 365 Apps update service (Microsoft Update) checks for updates periodically (default: every 12 hours). Updates are downloaded from the Office CDN using Background Intelligent Transfer Service (BITS). The update channel determines the frequency and type of updates (see below).

4.

Roaming Settings: User settings (e.g., custom dictionary, theme, proofing tools) are synced to the cloud via OneDrive and applied across devices.

5.

Cloud Features: Features like Real-Time Co-authoring in Word, Excel, and PowerPoint use Microsoft's cloud sync infrastructure (based on SharePoint and OneDrive). AI features like Ideas in Excel or Designer in PowerPoint call Azure Cognitive Services.

Key Components, Values, Defaults, and Timers

- Update Channels: Microsoft 365 Apps have three main update channels: - Current Channel: Receives new features first (monthly). Suitable for users who need the latest features. Default for consumer and some business plans. - Monthly Enterprise Channel: Receives new features once a month with a predictable release schedule. Suitable for most enterprise users. - Semi-Annual Enterprise Channel: Receives new features twice a year (January and July). Suitable for regulated environments that need extensive testing. - Activation validity: Online activation is valid for 30 days. If the device cannot contact the activation server for 30 consecutive days, the apps enter reduced functionality mode (read-only). After 30 more days (60 total), the apps become disabled. - Product IDs: Each plan has a specific product ID used during deployment. For example: - O365ProPlusRetail for Microsoft 365 Apps for enterprise - O365BusinessRetail for Microsoft 365 Apps for business - Architecture: 32-bit is default, but 64-bit is recommended for large datasets (e.g., Excel >2GB). The installer can be configured to force 64-bit. - Installation size: ~1.5 GB for 32-bit, ~2.5 GB for 64-bit.

Configuration and Verification Commands

Administrators can deploy and manage Microsoft 365 Apps using the Office Deployment Tool (ODT). The ODT uses an XML configuration file to specify settings. Example XML to install Microsoft 365 Apps for enterprise with the Semi-Annual Enterprise Channel:

<Configuration>
  <Add OfficeClientEdition="64" Channel="SemiAnnual">
    <Product ID="O365ProPlusRetail">
      <Language ID="en-us" />
    </Product>
  </Add>
  <Updates Enabled="TRUE" UpdatePath="\\server\updates" />
  <Display Level="None" AcceptEULA="TRUE" />
</Configuration>

To verify installed version and channel, check the registry at HKEY_LOCAL_MACHINE\SOFTWARE\Microsoft\Office\ClickToRun\Configuration. Key values: - VersionToReport: Installed version (e.g., 16.0.15601.20088) - UpdateChannel: Current channel URL (e.g., http://officecdn.microsoft.com/pr/492350f6-3a01-4f97-b9c0-c7c6ddf67d60 for Semi-Annual)

Interaction with Related Technologies

Azure Active Directory: User identity and license assignment are managed in Azure AD. The user must have a valid license assigned to activate Microsoft 365 Apps.

Microsoft Intune: Used for mobile device management (MDM) and mobile application management (MAM). Administrators can deploy Microsoft 365 Apps via Intune and enforce policies like PIN or data encryption.

Microsoft Endpoint Configuration Manager (SCCM): Can be used to deploy and update Microsoft 365 Apps on-premises, with integration for update management.

OneDrive: Required for roaming settings and cloud file storage. Without OneDrive, some features like real-time co-authoring may not work.

Microsoft 365 Admin Center: Used to view license assignments, generate activation reports, and manage update channels via group policy.

Deployment Options

Cloud-based (self-install): Users install from the Office Portal (portal.office.com). Simplest but least controlled.

Office Deployment Tool (ODT): IT downloads the ODT from Microsoft, creates an XML configuration file, and deploys to client machines. Supports customization (e.g., remove apps, set update path).

Microsoft Intune: Cloud-based deployment with policy enforcement. Supports Windows, macOS, iOS, and Android.

Configuration Manager: On-premises deployment with advanced reporting and update management.

Group Policy: Used to configure update settings, disable features, and enforce security settings.

Licensing and Plans

Microsoft 365 Apps are included in the following plans: - Microsoft 365 Business Basic: Web and mobile apps only (no desktop apps). - Microsoft 365 Apps for business: Desktop apps for up to 5 devices per user, no enterprise features (e.g., no Group Policy support). - Microsoft 365 Apps for enterprise: Full desktop apps with enterprise management capabilities. - Microsoft 365 E3/E5: Includes Microsoft 365 Apps for enterprise plus additional security and compliance features. - Office 365 E1: Web and mobile apps only. - Office 365 E3/E5: Includes Microsoft 365 Apps for enterprise.

Feature Differences

Microsoft 365 Apps include features not available in perpetual versions: - Real-time co-authoring: Multiple users editing the same document simultaneously. - AI-powered features: Ideas in Excel, Designer in PowerPoint, Editor in Word. - Cloud-based storage: Auto-save to OneDrive or SharePoint. - Modern authentication: Supports Multi-Factor Authentication (MFA) and Conditional Access. - Always-up-to-date: No need to purchase new versions; updates are included.

Perpetual versions (e.g., Office 2021) lack these features and receive only security updates for 10 years.

Update Process

Updates are delivered via the Office Content Delivery Network (CDN). The update process: 1. The Microsoft 365 Apps update service checks for updates every 12 hours by default. 2. If an update is available, it downloads the delta (differential) update using BITS. 3. The update is applied silently (no user interaction required). 4. The user may be prompted to restart the app if files are in use.

Administrators can control updates via Group Policy or ODT XML (e.g., set update path to a local network share to reduce internet bandwidth).

Security Features

Application Guard for Office: Opens untrusted documents in a hardware-isolated container (requires Windows 10 Enterprise E5).

Protected View: Opens files from untrusted sources in read-only mode.

Block macros from internet: Macros downloaded from the internet are blocked by default.

Sensitivity labels: Integrates with Microsoft Information Protection to apply labels automatically.

Troubleshooting Common Issues

Activation errors: Ensure the user has a license assigned and can reach https://activation.sls.microsoft.com.

Update failures: Check if the device can reach the Office CDN. Use the Office Repair tool (C:\Program Files\Common Files\Microsoft Shared\ClickToRun\OfficeClickToRun.exe with /repair switch).

Slow installation: Use ODT with SourcePath to deploy from a local network share instead of downloading from the internet.

Walk-Through

1

License Assignment in Azure AD

The administrator assigns a Microsoft 365 Apps license to the user in the Microsoft 365 Admin Center or via PowerShell. The license is stored in Azure AD as a service plan. The user must have an active license to activate the apps. If the license is removed, the apps will enter reduced functionality mode after 30 days. This step is prerequisites for any installation.

2

Installation via Click-to-Run

When the user runs the installer (either from the Office Portal or via ODT), the Click-to-Run technology streams the compressed package from Microsoft's CDN. The installer first downloads a small bootstrap file, then downloads the full package in the background. The installation is performed using a virtualized environment (App-V-like) to avoid conflicts. The user sees a progress bar, but the actual installation may take 5-15 minutes depending on bandwidth.

3

Product Activation

Upon first launch of any Office app (e.g., Word), the app generates a signed token containing the user's UPN and license SKU. This token is sent to the activation server via HTTPS. The server validates the token against Azure AD and returns a license blob. The app stores this blob locally and sets a timer for 30 days. If the device cannot contact the server within 30 days, the apps become read-only.

4

Update Check and Download

The Microsoft 365 Apps update service runs as a scheduled task (Microsoft Office 16 Click-to-Run Update). It checks for updates every 12 hours by default. If an update is available, it compares the local version with the server version and downloads only the delta (differential) using BITS. The download is throttled to avoid saturating the network. The update is applied when the app is restarted or at a scheduled time.

5

Roaming Settings Sync

User settings such as custom dictionary, proofing tools, and theme are stored in the user's OneDrive folder under `AppData\Roaming\Microsoft\Office`. These settings sync across devices when the user signs in with the same Microsoft 365 account. The sync occurs every 5 minutes when changes are detected. This ensures a consistent experience across PC, Mac, and mobile.

What This Looks Like on the Job

Enterprise Scenario 1: Large Organization with Strict Update Compliance

A multinational bank with 50,000 employees needs to deploy Microsoft 365 Apps while ensuring all devices are patched within 30 days of release. They use the Semi-Annual Enterprise Channel to receive updates twice a year, but they also need to test updates before deployment. The IT team uses the Office Deployment Tool to download updates to a local network share (SCCM Distribution Point). They configure the update path via Group Policy to point to the local share. This reduces internet bandwidth usage and allows them to approve updates after internal testing. Common issues: if the local share goes down, devices cannot update and may fall behind. They monitor update compliance using Microsoft Endpoint Analytics.

Enterprise Scenario 2: Small Business with Cloud-First Deployment

A 50-person marketing agency uses Microsoft 365 Business Premium. They want users to self-install Office from the Office Portal. The IT admin assigns licenses and sends an email with instructions. Users install Office on their laptops and activate with their work email. The admin uses the Office 365 Admin Center to view activation status and generate a report of inactive users. They also enable Multi-Factor Authentication to secure logins. Problem: if a user leaves, the admin must deactivate the license and revoke the user's access. The former user's local Office installation remains activated until the 30-day timer expires. To immediately block access, the admin can sign out the user from all sessions via Azure AD.

Enterprise Scenario 3: Regulated Healthcare Provider

A hospital with 10,000 devices must comply with HIPAA. They deploy Microsoft 365 Apps via Intune with policies that disable cloud features like AutoSave and Real-Time Co-authoring to prevent data leakage. They also enable Application Guard for Office to open attachments from external sources in a sandbox. They use the Monthly Enterprise Channel to receive security updates monthly but test features in a pilot group. They enforce 64-bit Office because some Excel files exceed 2GB. Common misconfiguration: forgetting to set the update channel, resulting in devices being on Current Channel and receiving untested features. They use Group Policy to lock the update channel.

How MS-900 Actually Tests This

MS-900 Exam Focus: Microsoft 365 Apps

This topic aligns with objective 2.4 Describe Microsoft 365 Apps under the 'Productivity' domain. The exam tests your ability to:

Differentiate between Microsoft 365 Apps (subscription) and perpetual Office (e.g., Office 2021).

Identify which plans include desktop apps vs. web-only.

Understand update channels and their frequencies.

Recognize deployment methods (ODT, Intune, SCCM, self-install).

Know licensing requirements (per-user, up to 5 devices).

Common Wrong Answers and Traps

1.

'Microsoft 365 Apps are the same as Office 365 E3.' Wrong. Office 365 E3 is a plan that includes Microsoft 365 Apps, but the apps themselves are the software. The exam may list 'Microsoft 365 Apps for enterprise' as the correct term.

2.

'Microsoft 365 Apps require a constant internet connection to work.' Wrong. They work offline for up to 30 days before entering reduced functionality. Many candidates think they are cloud-only.

3.

'Current Channel is the best for enterprise deployments.' Wrong. Current Channel receives monthly feature updates, but Semi-Annual Enterprise Channel is recommended for organizations that need stability and testing time.

4.

'Microsoft 365 Apps can be installed on unlimited devices.' Wrong. The per-user license allows installation on up to 5 devices (PC, Mac, tablets, phones). Some candidates think it's per-machine.

5.

'Microsoft 365 Apps are included in all Microsoft 365 plans.' Wrong. Plans like Microsoft 365 Business Basic and Office 365 E1 include only web and mobile apps, not desktop apps.

Specific Numbers and Terms to Memorize

30 days: Grace period before reduced functionality.

5 devices: Maximum installations per user.

Update channels: Current (monthly), Monthly Enterprise (monthly), Semi-Annual Enterprise (twice a year).

Click-to-Run: Deployment technology.

Office Deployment Tool (ODT): Primary tool for custom deployments.

Product IDs: O365ProPlusRetail, O365BusinessRetail.

Architecture: Default 32-bit, 64-bit recommended for large data.

Edge Cases and Exceptions

Education plans: Microsoft 365 A1 includes web-only apps; A3 and A5 include desktop apps.

Government plans: GCC, GCC High, and DoD plans have different update channels and deployment restrictions.

Mac support: Microsoft 365 Apps for Mac are also available but have different update mechanisms (AutoUpdate).

Shared computers: Activation is per-user, but shared computer activation allows multiple users on the same machine (requires registry key).

How to Eliminate Wrong Answers

If a question mentions 'always connected' or 'no offline access', it's wrong because apps work offline for 30 days.

If a question says 'buy once, use forever', it's describing perpetual Office, not Microsoft 365 Apps.

If a question lists '32-bit only', it's wrong because 64-bit is available.

If a question says 'included in all plans', look for exceptions like Business Basic or E1.

Key Takeaways

Microsoft 365 Apps are subscription-based and require a license assigned to the user in Azure AD.

The grace period for offline use is 30 days; after that, apps become read-only.

Update channels: Current (monthly), Monthly Enterprise (monthly), Semi-Annual Enterprise (twice a year).

Per-user license allows installation on up to 5 devices (PC, Mac, tablets, phones).

Deployment tools: Office Deployment Tool (ODT), Intune, Configuration Manager, self-install from portal.

Not all Microsoft 365 plans include desktop apps; Business Basic and E1 are web-only.

Click-to-Run is the streaming technology used for installation and updates.

64-bit architecture is recommended for large datasets (Excel >2GB).

Easy to Mix Up

These come up on the exam all the time. Here's how to tell them apart.

Microsoft 365 Apps (Subscription)

Licensed per user per month

Includes continuous feature updates

Cloud-connected features (co-authoring, AI)

Install on up to 5 devices per user

Requires internet for activation every 30 days

Perpetual Office (e.g., Office 2021)

Licensed per device one-time purchase

Only security updates for 10 years

No cloud features (except basic OneDrive sync)

Install on one device per license

No internet requirement after installation

Watch Out for These

Mistake

Microsoft 365 Apps require an internet connection to function.

Correct

Microsoft 365 Apps work offline for up to 30 days. After 30 days without internet, they enter reduced functionality mode (read-only). After 60 days, they become disabled. They do not require constant connectivity.

Mistake

Microsoft 365 Apps are the same as Office 2021.

Correct

Office 2021 is a perpetual version with a one-time purchase, no new features after release, and only security updates. Microsoft 365 Apps are subscription-based, receive continuous feature updates, and include cloud services.

Mistake

The Current Channel is the default for all enterprise deployments.

Correct

The default channel depends on the installation method. For many enterprise deployments, the Semi-Annual Enterprise Channel is recommended. The Current Channel is default for consumer installations.

Mistake

Microsoft 365 Apps can be installed on unlimited devices.

Correct

Each user licensed for Microsoft 365 Apps can install the software on up to 5 devices (PC, Mac, tablets, phones). This includes Windows, macOS, iOS, and Android devices.

Mistake

All Microsoft 365 plans include desktop versions of Office.

Correct

Plans like Microsoft 365 Business Basic and Office 365 E1 include only web and mobile apps. Desktop apps are included in plans like Microsoft 365 Business Standard, Business Premium, and enterprise plans (E3/E5).

Do You Actually Know This?

Reveal each answer, then mark whether you got it right. Score 60%+ to unlock the next chapter.

Frequently Asked Questions

What is the difference between Microsoft 365 Apps and Office 365 ProPlus?

Office 365 ProPlus was renamed to Microsoft 365 Apps for enterprise in April 2020. The functionality is the same. The name change aligns with the Microsoft 365 brand. On the exam, 'Microsoft 365 Apps for enterprise' is the current term.

How long can I use Microsoft 365 Apps offline?

You can use Microsoft 365 Apps offline for up to 30 days. After 30 days without connecting to the internet, the apps enter reduced functionality mode (you can view and print documents but not edit). After 60 days, the apps become disabled until you reconnect and activate.

Which update channel should I choose for my organization?

For most organizations, the Semi-Annual Enterprise Channel is recommended because it provides stability and predictable updates (January and July). The Monthly Enterprise Channel is good for users who need features sooner but with a monthly release. The Current Channel is for users who want the latest features immediately but may have more frequent updates.

Can I install Microsoft 365 Apps on a Mac?

Yes, Microsoft 365 Apps for Mac is available for macOS. The same licensing applies (up to 5 devices per user). The installation is done via the Office for Mac installer from the portal. Updates are managed by Microsoft AutoUpdate.

What happens if I unassign a user's license?

The user's Microsoft 365 Apps will continue to work for 30 days (grace period). After 30 days, the apps enter reduced functionality mode. After 60 days, they become disabled. To immediately revoke access, you can sign out the user from all sessions via Azure AD.

How do I deploy Microsoft 365 Apps without internet access?

You can use the Office Deployment Tool to download the installation files to a network share. Then configure the ODT XML to use a SourcePath pointing to that share. Similarly, updates can be downloaded to a local server and clients configured to use that update path via Group Policy.

Is Microsoft 365 Apps available for Windows 10 on ARM?

Yes, Microsoft 365 Apps is available for Windows 10 on ARM devices (e.g., Surface Pro X). The 32-bit version runs emulated, and the 64-bit version runs natively on ARM64. Performance may vary.

Terms Worth Knowing

Ready to put this to the test?

You've just covered Microsoft 365 Apps — now see how well it sticks with free MS-900 practice questions. Full explanations included, no account needed.

Done with this chapter?