Hi CRBOOKKEEPING,

The article link below will give you more information:

Can you use Office 365 with Sage 50? - KB12227

Hope this helps. 

The KB article mentions only the 'click-to-run' and cloud hosted versions of Microsoft Office.  Office 365 is available in a number of different versions / packages / editions, some of which seem to be a local installation, and work when disconnected from the Interweb.

As long as you choose the 32 bit version when installing Office 2010, 2013, or 2016, it doesn't matter whether it is being installed from a CD, an ISO image, came with the computer, or installed from an Office 365 subscription.

As long as it is 32 bit, and installed, Outlook will send email from Sage 50.