Office 365 gives Microsoft a chance to leapfrog Google by making cloud apps easy

Familiar interface, low cost, powerful feature list puts Office 365 ahead of Google Apps, on paper

The revamped version of the cloud-based office suite Microsoft will introduce tomorrow is getting good reviews – despite warnings earlier this month from analysts who said Office 365 isn't ready to leave beta testing -- especially compared to Google's web-based productivity apps.

[Also see: 13 cool features of Office 365]

Microsoft scheduled a press conference in New York tomorrow in which CEO Steve Ballmer is expected to announce general availability for Office 365, the replacement for Microsoft's moribund (sometimes unreliable) Business Productivity Online Suite (BPOS), which has been in beta since October.

Switching to online versions of the apps employees use pretty much full time is usually considered it's most appropriate for branch offices or small companies without their own IT staffs – or who prefer to pay for productivity and communication apps by subscription rather than the high per-seat Office license costs.

" The per-seat pricing for Office 365 may tempt a few chief financial officers to call Microsoft in for a pitch," according to a review from Ghacks.net.

Larger companies that have the IT budgets and staff to support desktop Office installations would be losing a lot of investment and customization work if they decide to dump the desktop version and adopt the cloud versions.

Most would mix the two, anyway, either using Office 365 to supplement the desktop version or to provide a shared workspace between business partners, or common workspace for team members

who spend a lot of time separated or travelling.

The entry level version of the suite – Office 365 for Professionals and Small Businesses -- will cost $6 per user per month for access to Office Web Apps, Exchange, SharePoint and the IM/VoIP/online meeting service Lync online.

Office 365 for Enterprises ranges from $10 to $27 and includes better administration, more storage, the Forefront Online security suite, and the right to link Office 365 with on-premise versions of the apps in the web suite.

The price, even for the SMB version ($72/user/year), is a lot higher than the $50 per user per year Google charges for business versions of its apps. The learning curve is shorter, however, the interface is familiar and integration with existing documents and email is a lot simpler.

Google tries to minimize that with features such as the Google Cloud Connect for Microsoft Office

Google is already gearing up for the competition, with additions such as an agreement with Box.net that integrate the two more tightly, including letting Box.net users access Word and Excel files in Google Docs.

They're also bragging about how much more widely accessible their services are than Office 365, which currently supports smartphones or tablets only if they're running Windows Phone 7.

The familiar interface, almost seamless integration with desktop file formats, low upfront price and greater functionality of Office 365 – which shows an effort to reduce the feature bloat of Office but still ends up with a larger tools list than Google's -- will be the biggest selling point for end users and budget managers in most companies.

The back-end support and administration tools in Office 365 – also richer than those Google offers – and variety of login-security options are what will appeal to IT, which is appropriately cautious about any web service that doesn't allow for granular monitoring and control of apps it supplies to its end users.

The April crash at Amazon's EC2 wasn't a huge disaster because it brought down so many sites, for example. It was a huge disaster because most customers had a limited ability to monitor or control backend server and application processes compared with on-premise apps, and hadn't made the same arrangements for off-site disaster recovery they would have with hosted or on-premise setups.

Microsoft has wrestled with its own internal issues during the past three years, as it tried to meet demand to put its cash-cow office suite into the cloud without alienating the VARs and resellers on which it depends, or hurting its own income by cannibalizing sales on on-premise versions of Office.

Office 365 may not be the ultimate answer, either to Microsoft's financial conflicts or the question of how to deliver productivity apps from the cloud that are as attractive and powerful as those on the desktop.

The latest edition is enough of an improvement to give Google Apps more than a run for its money, however. For the first time Office 365 puts Microsoft ahead in the race for the best cloud-based suite – at prices higher than Google's, but low enough to keep Office 365 from being bumped off the short list even at companies for which cost is a first priority.

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