Use of own domain name with Office 365 Home/Premium

I do it for the cloud storage. Same price as Dropbox, O365 is the bonus.

So you said yourself, it is the same price as DropBox, so even without custom domains you have already got the better deal, and there should be no complains about O365 pricing then. Custom domains could be a great bonus option, but it is not there. Get used to that.

Off-topic about OneDrive storage:

I cannot see how 1TB could work for me. 5GB of the free storage is enough for the needs of the documents (like actual office documents). 1TB is far too little for keeping the photos and short home videos accumulated over last years. I needed to find other ways of doing photos and videos storage at home and having external backup for my family needs. 

So, I was wondering how do you utilize 1TB per family member?

I think you're wrong.  Microsoft already have the infrastructure for this and ability in their products to segment the market.  This should be money for old rope for them.

I'm still happily using Office 2011.  Excel 2011 processes VBA macros on my 9.5 year old MacBook Pro (Intel Core 2 Duo CPU) faster than Excel 15.x (2016???) does on 2 year old MBP (i7 CPU).  My running log spreadsheet that I've been using since 2006 is almost unusable in the latest Excel because the macro processing is so slow that it interferes with data entry!  Why would I pay for an upgrade, whether it's a permanent licesning (gets cheaper by the month), or a subscription (will only get more expensive)?

I think you're wrong.  Microsoft already have the infrastructure for this and ability in their products to segment the market.  This should be money for old rope for them.

OK, lets say the infrastructure and support does not cost extra.

I think they did the homework and could see that there is a large number of up to 5 users small businesses (home businesses sort of) who (if the custom domain option were available) would have switched from Business to a cheaper Home plan, cannibalizing the more expensive plan.

I think they did the homework and could see that there is a large number of up to 5 users small businesses (home businesses sort of) who (if the custom domain option were available) would have switched from Business to a cheaper Home plan, cannibalizing the more expensive plan.

May be true, but if you adress different markets, this can always happen.

You can limit this risk by limiting the license via TOS to "non-business". 

They already used to do this in the old "office home and student" editions! So it's really nothing new!

Ultimately the question is: do you get more out of the additional business by offering the feature or do you loose more by the cannibalisation?

I mean, honestly: 

the business model of the O365 home/personal is basically to rent out a pice of software that you could also buy for one-off.

The additional benefit from the subscription on top of the one-off purchase is limited (of course there will always be one person valuating it higher than the other, but over all it is rather limited).

Anyone can see that one-off buying is cheaper in the long run than the subscription.

On the other hand, 

if you would offer email tied into this subscription, you would have a real distinctive advantage for the subscription product. You would also tie the clients much closer to you as it would be much harder to move from such a subscription to a one-off purchase. 

But whatever, the decision seems to be made wether or not we like it (and I hate it).

I have waited for this feature for so long now that I am really frustrated to see the one chance they had slipping away.

(as outlook premium was not on my radar and available in my country, I wasn't aware of it until yesterday).

So for me this opens up the question again of whether to go back to one-off purchase instead of subscription.

If they don't intend to enrich their more expensive product with the most obvious benefit, then, well, I will go back to their cheaper alternative.

I can easily live with that.

Their problem.