Office 365 is a proprietary set of applications, including MS Outlook, Office applications, hosted services, and Office 365 education. The Microsoft Office 365 gives you several options to streamline your work in Outlook, Word, Excel, and other applications. The benefit of using it, your documents and other files are saved on Microsoft's Cloud Storage, OneDrive.
You will get 27 GB of OneDrive storage with the subscription of Office 365. However, if you do not want to save your files locally on your computer's hard disk drive, there is no restriction on this at all. You can select a location to save your data. Saving on the cloud gives you access to your documents anywhere you want with just a single login.
Other benefits of Office 365 include support for both Mac and Windows OS, inclusion of several apps (including complete MS Office), OneDrive, and many more. It also works on touchscreen devices. The best thing about Office 365 is it works as usual MS Office and other applications. You are just being offered additional benefits. For example, you can access an old PST file with Office 365 Outlook without any technical changes. And, the same applies to Word docs, Excel files, etc.
Similarly, if you have an orphan OST file, which you want to access with Office 365, then you will have to Convert OST to Office 365 the same way you might have done earlier to access an orphan OST with any other Outlook profile. Here, you will learn the process of accessing an OST file with Office 365 Outlook application.