Office 365 is a set of productivity tools offered by Microsoft as a subscription. You pay per user, per month or per year and get the following for your organization:
- spam free e-mail with access from a web browser, Office Outlook, a smartphone like iPhone, Android, Windows Phone, BlackBerry, Symbian or any e-mail client. You also get personal and shared Contacts and Calendars - this is called Exchange Online
- documents stored in a central web location securely accessible from a PC, a MAC or a web browser (IE, Firefox and Safari officially suported, others work too). You can attach workflows to those documents so people interact with them in a predefined manner - you get this from SharePoint Online
- lists (for example an Asset Inventory, an Issues Tracking mini-app) - also from SharePoint Online
- intranet (you can publish internal know-how, documents, links, pictures or any kind of files) - from SharePoint Online
- public website - also from SharePoint online
- instant messaging and web conferencing - offered through Lync Online
More info from the vendor here.
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