Buying a large number of MS‘ full Office package can become quite expensive, so for some scenarios it can be an option to use some free / open source applications like LibreOffice. But for Outlook 2016 there is no 100% satisfying alternative available, so a good compromise can be to only buy a standalone version of Outlook, which is also available in several licensing ways like single or volume licenses.
When you first install and open Outlook 2016, you might notice the email editor behaves a bit strangely, e.g. by default the AutoFormat options are missing, like the automatic bullets or numbering lists.
For whatever reason, Outlook seems to simply look if the file winword.exe exists, and disables auto-formatting if not. Actually, it does not need this file at all, so this seems to be sort of a bug.
So you just create an empty text file called „WINWORD.EXE“ in your Outlook’s installation directory like %programfiles%\Microsoft Office\Office16\ (make sure it does not append a .txt extension).
Then start Outlook and the mail editor formatting works like it should.