I currently have office 2007 student edition installed on 3 PCs. This includes Excel, Word, Powerpoint but no outlook. So last year I bought Outlook 2010 and was told I could use this to install on 2 PCs which I have done. However next month I plan on building two new PCs (and ditch the old ones) and from what I understand Microsoft will expect me to buy new licenses for my Office products. As far as I know you can't transfer them by deactivating one license then transferring to another PC?
I'm not overly clued up with Office products but read about office 365 and that it includes 5 licenses. You pay a certain amount every year...about £100. You can transfer licenses between PCs but have to wait 90 days to do it.
Does anyone know if Office 365 maybe the way forward for someone like me who has 3 PCs? rather than buying individual licenses to cover them? Anyone used Office 365? Will i still be able to install Word, Excel, Outlook onto My PC or is all run in the cloud? if it is run in the cloud then I can't see how this would benefit me as I need it installed on my PC. Reading the MS website gives the impression that any word, excel files i save, will be saved to the cloud(skydrive).

major security issues there imo. I don't want my stuff out there.