Microsoft has taken the wraps off a major update to Office for Windows, introducing a bunch of new features designed to brings its venerable productivity suite into the new era of cloud connectedness.

Office has been a mainstay in the enterprise for longer than many of us have been working, with software like Word, Excel and PowerPoint long since establishing themselves as the key components of companies’ workflows. But in recent years Microsoft’s position at the top of the productivity tree has been challenged by the rise of alternative software suites from companies like Google, what with its collaboration features and so forth.

Now Microsoft is fighting back with Office 2016, with the key updates primarily focused on fostering greater collaboration among work colleagues. As such, new features include real-time co-author in Word, which means users can edit documents simultaneously a la Google Docs. And pretty soon, Microsoft is planning to extend the feature to other programs like Excel.

There’s also a revamped search tool called “Tell Me” added to Word, Excel and other programs that lets users quickly search for those annoyingly difficult-to-locate functions like adding a watermark and so on. Microsoft has also thrown in improvements to Outlook, and closer integration of Skype in response to the threat from new Web-based services like Google Docs and Slack that have slowly but surely been squeezing its hold on the workplace.

Many of the new features have been available on the Office Web apps for some time, but with Office 2016 they’re finally made available to the majority of Office users.

“The way people work has changed dramatically, and that’s why Microsoft is focused on reinventing productivity and business processes for the mobile-first, cloud-first world,” Satya Nadella, Microsoft CEO, wrote in a blog post. “These latest innovations take another big step forward in transforming Office from familiar set of individual productivity apps to a connected set of apps and service designed for modern working, collaboration and teamwork.”

What’s new in Office 2016?

Collaboration features: Perhaps the biggest change to Office 2016 is the heavy focus on collaboration. Previously, users were forced to swith program from Office to something like Skype if they wished to communicate with others, but now there’s no need because this can be done directly in the software.

For example, it’s possible to co-author documents (work on them at the same time) and chat with other workers via Skype, which is integrated directly into Office. Microsoft has also introduced a new feature called “Groups” into Office. Groups was already available in Outlook, and allows users to organize group chats with team members, share files , edit permissions and so on.

“People often start and end their work in Office, but there is often a messy middle that involves a lot of discussion – in person, phone or via various tools -as well as multiple (sometimes conflicting) inputs,” wrote Microsoft’s head of Office Kirk Koenigsbauer in a separate blog post. “Today we are delivering a set of experiences that is built for making teamwork seamless.”

Search features: One of the biggest annoyances for many Office users is that Office’s suite of programs has become so complex that it’s almost impossible to navigate for anyone but the most dedicated power users. Understanding this, Microsoft has at long last tried to make it easier for less experienced users with the introduction of the “Tell Me” and “Smart Lookup” features.

Tell Me does as one would expect. If you want to perform a certain function and don’t have a clue where to look, Office will “tell you” where it is. Simply type in whatever it is you’re looking for (such as “add watermark”) and the menu will pop up one or more suggestions. It’s certainly far more useful than the old “Help Menu”, that’s for sure.

As for the Smart Lookup feature, this is an upgrade of the old “Lookup” function that allows you to select a word and look it up in the dictionary or on the Web. Now, whenever you look up a word it provides contextual information and images in the sidebar, which means you never have to leave Word.

Outlook: Also worth a look is Microsoft’s updated email client, which gives users access to the “smartest inbox yet”.

Microsoft says Outlook has a new and improved search function that makes it easier to navigate through your old emails. There’s also a new “Clutter” folder that prioritises your most important emails. Clutter sounds like a regular old spam filter but it’s not quite the same, because the folder learns your email habits over time to work out which emails should go into your priority inbox, and which should not.

How much does it cost?

Microsoft wants people to sign up for a subscription to Office 365, but it’s still offering the old license model for those who prefer them.

For those looking for a one-time purchase, Office 2016 Home & Student costs $149 for both Windows and Mac versions; $229 for the Office Home and Business edition; and $399 for a single copy of the Office Professional edition.

Boxed versions of Office 2016 can be bought off the shelf at Microsoft’s stores from today. Note that these versions of Office won’t be updated multiple times a year like the subscription-based versions.

For those who’d rather go down the subscription route and stay up to date, as Microsoft would prefer, Office 365 Personal (which gets you Word, Excel, PowerPoint, OneNote, Outlook, Publisher and Access) costs $84 per year, and can be run on one PC or Mac, and one smartphone.

Office 365 Home (which offers the same programs) costs $120 per year, with the advantage being it can be installed on up to five PCs or Macs, and also up to five smartphones.

As for Office 365 Business editions, some of which allow users to download Office apps directly onto local machines, vary in price according to the plan.