Word Excel is a small part of O365.

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.