You may have noticed one very popular app is missing from this update: Microsoft Teams. If you have automatic updates enabled then this optimization update should already be downloading and installing.
The optimized apps include Outlook, Word, Excel, PowerPoint, and OneNote, all of which Microsoft says 'will run faster and take full advantage of the performance improvements on new Macs.' So any Office users who own the M1 MacBook Air, MacBook Pro, or Mac mini will benefit. This week, Microsoft released new versions of many of its Microsoft 365 apps that run natively on Apple M1. One month on, and Microsoft Office is now optimized for running on Apple's M1 devices. Last month, Microsoft reacted quickly to Apple's shift to ARM chips in Macs by releasing a beta of Office that was compatible.