Microsoft Office 365 vs. Google Apps for Business

Two tech titans go head-to-head in a war to win over businesses with productivity tools.

Office 365, Microsoft's answer to Google Apps for Business, just became available to the public for beta testing. With this move, Redmond comes closer to delivering a package of tools to companies seeking e-mail, word processing, Web-based meetings, and scores of other services that work on PCs and mobile devices alike.

But wait a minute, wasn't Google Apps Google's answer to Microsoft's dominance in the productivity space? After all, Microsoft has held a steady lead in such desktop software for decades. It wasn't until 2006 that Google released Docs, a bare-bones online word processor formerly known as Writely. Docs still barely scratches the surface of the features found in Microsoft Word.

That's all true, but Google offered collaboration as a killer feature while Microsoft dragged its heels in migrating Office to the cloud. Office Web Apps--online counterparts to Word, Excel, and PowerPoint--didn't reach the masses until nearly a year ago.

Users of the free Google Docs only need to press the Share button to invite anybody to a document and watch each others' edits happen live. People who didn't "get" what Microsoft SharePoint does, or didn't want to pay for a corporate account, could tinker with collaboration instantly in Google Docs. That kind of lightbulb moment radically shifted the way many people work.

Why These Services Matter

The cloud--just another buzzword for anything stored online--is where the future of productivity lives, after all. More and more workers take their work away from their desks onto mobile devices, and bring their own smartphones and tablets to work.

Office 365 and Google Apps for Business promise to manage the nitty-gritty, back-end tasks that many businesses pay IT staff to handle (see how that's meant to work here). Their cloud services can free a company to get things done without a tech whiz.

There are potentially big savings in migrating tools to the cloud. Online meetings reduce the need for business travel, and Web and mobile apps enable workers across oceans to work on the same page, literally, at the same moment. Plus, outfitting employees with software that works in a Web browser means there's little need to install local applications, then manage updates and patches. You may not even need to equip workers with computers--or outfit headquarters with a server room and IT staff.

What's Inside

Office 365 combines online editions of Word, Excel, PowerPoint, and OneNote, with Exchange for mobile calendar and e-mail access. There's also SharePoint for an intranet and shared documents; and Lync for IM, online meetings, and audio and video calls. An extra fee covers Microsoft Office Professional Plus software, including Outlook for e-mail and calendars. Read more about what's inside Office 365 here, and tour its tools for end users and business managers.

Google Apps for Business includes Docs, Spreadsheets, Presentations, Gmail, Calendar; Groups for group collaboration; Sites for intranets. Google also offers a bunch of stuff not quite found in Office 365--but that you can get even without a Google Apps subscription--such as Reader, AdWords, Picasa, and Blogger.

Then there's the Google Apps Marketplace. Similar to Apple's genius move of inviting third parties to build apps for the iPhone, Google invites anyone to create tools for Apps for Business. There are apps for CRM, payroll, and accounting, just to start.

These packages differ, by the way, from the free consumer services they include--and which are probably enough for most home-based businesses. Microsoft Office Web Apps is the name for online versions of Word, Excel, PowerPoint, and OneNote. And the regular Google Apps include Gmail, Calendar, Docs, Spreadsheets, Presentations, Sites, and services such as AdWords and Reader.

Office 365 starts at $6 per user per month, while Google Apps for Business is slightly cheaper at $50 per year, which amounts to $4.17 monthly per seat. However, Microsoft provides a nice incentive for paying for Office Professional Plus as a monthly fee, far more affordable than the retail price of the desktop software (although that's a different story if your company already enjoys a volume license discount).

Which Will Win?

Which tech titan is going to "own" the cloud? For now, at least, most businesses seeking a do-it-all package of go-anywhere business tools will basically turn to either Microsoft or Google. Consumers may be brand agnostic when it comes to online services, but most aren't going to research to know smaller brands, such as Zoho (even if it claims 4 million users).

Google dangles all kinds of bait to lure people away from Microsoft. Google Apps Migration for Microsoft Exchange lets organizations move e-mail, calendars, and contacts as well as PST files, and IMAP server data, to Google Apps. The Google Cloud Connect plug-in for Microsoft Office 2003 through 2010 lets you collaborate with other Google users within Office.

Google Apps opened online collaboration to the masses, but there's still room for Microsoft to leverage its legacy and sell Office 365 hard to existing customers. Google Apps counts 3 million users, but there are ten times as many users of Office Web Apps. And millions of people use Microsoft's Business Productivity Online Standard Suite (BPOS), which will upgrade to Office 365. Google remains the search king, but it can't claim anywhere near the user base that Microsoft does for any of its apps; 750 million people use Microsoft's desktop Office.

Still, the public is fickle, and business customers want whatever will save them time, money, and migraines. Microsoft and Google each enable each others' offerings to integrate to some extent, so users of either Office 365 or Google Apps can dabble in parts of both--at least in their consumer components. And both services are available for free, 30-day trials.

I, for one, use Google Apps daily and the desktop Microsoft Office almost as often. There are still many tasks that Google's online tools can't handle, but it lets me access and edit documents anywhere. Why not use Office Web Apps instead? Well, by the time it was available, I already had almost half a decade of documents on Google's servers.

In addition, my workplace uses Google Apps for Business, but I also lean on the consumer Docs and Spreadsheets for personal purposes, such as journals and all sorts of lists. I rarely need the fancy formatting from Microsoft Word or PowerPoint, or an Excel spreadsheet with deep calculations and a million rows of data. Nor do I crave a unified communications tool such as Microsoft Lync. Google and Skype allow video chat, and scores of screen-sharing and online meeting services are free. But my needs are specific to those of an editor brokering mostly in plain text. An engineer at a solar panel start-up maybe couldn't live without Excel on her PC.

Microsoft can "win" this cloud battle by attracting more users than Google, if it convinces many existing customers to adopt Office 365. However, its many moving pieces and even the pricing structure are more complex than for Google Apps for Business. If you want to get started quickly with a cloud package and don't need features as rich as Microsoft's, Google's option just feels friendlier.

Ultimately, Microsoft's package is probably a better choice for companies seeking a more formal, polished face on communcations. But Google Apps for Business feels the natural selection for companies that do most of their work online, given its AdWords integration and possibilities for new tools to pop up in its Apps Marketplace.

This story, "Microsoft Office 365 vs. Google Apps for Business" was originally published by PCWorld.

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