The question you have to ask yourself, though, is whether those features matter. I've spent the vast majority of my waking hours in Microsoft Word for more than a decade. I have never--not once--used the features under Citations & Bibliography, or Index, or Table of Authorities, and I have never performed a mail merge. The only feature missing from Word Online that I do use on a fairly regular basis is the Table of Contents.
Sizes to fit all
The verdict? Simple: Office Online tools are more than adequate to meet needs of most users. The only serious handicap to keep in mind is that you must be connected to the Internet in order to use Office Online, whereas the locally installed Microsoft Office suite is available for use regardless.
That may not be a deal-breaker in and of itself. There are free public Wi-Fi hotspots all over the place, and how likely is it, really, that access to the Office applications while you're not connected to the Internet will be a crucial issue for you?
That said, Office 365 provides significant value beyond just the Microsoft Office suite itself. The unlimited OneDrive storage alone is worth $7 a month, and the Skype minutes would cost $1.38 per month to purchase separately. When you add up the perks in Office 365, it's like you're actually getting Microsoft Office for free, and still getting a discount on the additional features as well.
A number of features and perks that come with Office 365, and I still highly recommend subscribing to the service, but the reality is that the vast majority of users can get by just fine using the completely free Office Online.
You'll have even more choices soon. Microsoft announced that Office for Windows 10 and Office 2016 will be released late this year. We don't yet know what new features or capabilities will be included in the touch-friendly Windows 10 apps, nor the new version of the desktop suite, or whether any of that will bleed over to the free Office Online offerings. Stay tuned for updates.
Sign up for CIO Asia eNewsletters.