And no, the average clerk can just a well use Word 95 and Libre Office is often just as feature rich as the MS alternative. The largest difference is Excel I believe. Well, then use Excel, but the rest isn't needed for anything.
They clearly are talking about Teams, Sharepoint, Onedrive, and Outlook.
O365 is by far the best option out there, especially compared to others in the same price range. Like Google's Gsuit which for the money is a second rate product. Only reason why GSuite is even used for many is ease of use. MS's 365 suite requires an experienced IT wizard to setup correctly. With about a dozen Admin consoles to shift through, especially with any Azure services used.
A real O365 alternative would be bad news for MS, and would require a massive amount of cash. It took over a decade to get 365 where it is now. This isn't something you can build overnight.
Domain controlling is perhaps something not easily replaced, but the rest is just fluff in my opinion. Teams might be the most useful app of all the bunch.
Seeing other cursors in a Word document was a fun at first, now it only induces endless rage and while neat, it certainly isn't a requirement.
There is a reason why Azure and AWS based cloud systems are pretty much a standard. There isn't a solid alt.
O365 Exchange keep you free from worrying about keeping your server up to date. O365 Teams allows for not only communication but collaboration. Teams integrates with SharePoint allowing for project sites. O365 Sharepoint & Onedrive allow for extremely flexible data storage and data shares. With all the permission options you'd ever need. You can move your AD Login's user folder to use your personal Onedrive account, a highly effective tool.
There just isn't good options to replace O365. Google's GSuite is a crappy alt for Admins that couldn't figure out 365's complex admin consoles.