Nonetheless, with the production release of Office 365, the cloud era of desktop productivity software officially kicks into high gear. Office 365 works with Microsoft's Web App versions of desktop Office applications -- Word, Excel, PowerPoint, and OneNote -- so theoretically, you can use it without a locally installed version of Office at all. But most people won't. The real Office 365 ploy is this: Sick of maintaining Exchange and SharePoint servers? No problem, pay Microsoft, and it will run those servers for you -- and throw in the fancy new Lync communications server.
Office 365 represents the first time Microsoft has bundled desktop software (Office 2010) with an online service into a single subscription-based offering. But if you have another source of licenses for Office (2010, 2007, or otherwise), or if you want to run just the Office Web Apps (not likely), you can get an Office 365 license without paying for Office.
Google Apps isn't a colossal, all-encompassing environment like Office 365 or its predecessor Microsoft BPOS (Business Productivity Online Standard Suite). It's intended to be small, light, and hit the high points. Google Apps includes Google Docs for word processing, spreadsheets, slide shows, forms, and data storage; Gmail and Calendar, which you've probably used before; a website-building utility called Sites; a spam filter called Postini; and a video-sharing app. When you pay for Google Apps, you pay for the programs that let you manage an unlimited number of email accounts on your domain, 25GB of space on each mail account, and for phone support of varying quality. All the rest of the Google bundle is free for everybody, all the time.
One feature missing from Google Apps will be a showstopper for many: You can't save locally unless you specifically, manually download data to your PC using Google Sync. So for practical purposes, if you're offline, you're out of luck. According to Google, this will change no later than the end of this summer, by which time Google Apps and the Chrome browser will gain support for the offline storage features of HTML5.