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I want to be able to understand better the differences between Office 365 (Sharepoint in the cloud) and the on-premise version.

  1. What features/functionalities does Office 365 offer that are not available in the on premise version and vice versa?
  2. Are there any limitations if one opts for Office 365 in terms of portability, reliability, availability, continuity et cetera? I am particularly interest in migrating from a SharePoint on premise to the cloud and vice versa. How feasible is this and what are the challenges?
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There is detailed list of features comparison for the various SharePoint versions:

http://www.milleniummultimedia.com/Lists/SharePoint%202013%20Server%20On%20Premise%20versus%20Office%2036/AllItems.aspx#.U5a9U_mSxOo

For migrating Sharepoint onpremise to Sharepoint Online there is no out of the box feature. You can use programmatically Migrate your environment to sharepoint online and there are 3rd party softwares for this i.e sharegate, metalogix.

http://www.metalogix.com/Products/Content-Matrix.aspx

http://en.share-gate.com/blog/migrate-files-documents-to-sharepoint-office-365

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