January 13, 2014, 2:08 PM — Two and a half years ago, when InfoWorld first pitted Office 365 against Google Apps, I likened Office 365 to the Queen Elizabeth 2 and Google Apps to a sailboat. In the intervening years, both have changed but in remarkably different respects.
Office 365 has turned into an 800-pound gorilla, with loads of new features and new options. Back then, Office 365 seemed like a cobbled-together mélange of Office 2000 and Exchange Server, with a few goodies tacked on the side. Now it's richer, smoother, more tightly integrated -- and one of Microsoft's major profit centers. Microsoft's revenue from Office 365 is now measured in the billions.
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The changes in Google Apps, in direct contrast, are much more subtle. It's still a small, light, considerably cheaper, one-size-fits-all proposition. I've seen significant strides in Office file compatibility and a few new features, but Google's still taking a minimalist approach. While there's nothing wrong with minimalism, particularly with budgets as tight as they are these days, you need to make sure Google Apps can do what you need it to do, before you commit.
At the risk of stretching the metaphor, Office 365 has added several new decks, a top-to-bottom refurbishment, and a couple of new lifeboats. Google Apps has a fresh coat of paint and a new sail. But the original propositions have remained the same: Office 365 aims to be all things to all companies, while Google Apps is content to offer key capabilities without the bloat and complexity.
Which of these propositions meshes more closely with the needs of business users? Back in June 2011, if you asked a handful of execs whether their people need to run Word, Excel, and PowerPoint, you probably would have heard a resounding if unreflective "Yes!" Nowadays, the status of the Office triumvirate isn't nearly as secure. Most execs (at least in my experience) now realize that full-blown Office is overkill for many of their employees. While Office hasn't yet been relegated to the bit bucket of history, the overarching need for Office is lower now than it has been in the past two decades.
That's why I've approached this review from a new perspective. Here I look at both packages' applicability in a mixed environment, where only a small percentage -- perhaps 10 or 20% -- of the people using the package actually need Office. Most people, most of the time, don't need Word's or Excel's ginormous feature set. There's no need to swing a sledgehammer when an ordinary hammer will do.
A note about Apple and the iWorks suite: While iWorks contains applications that handle the basics -- and they're now free for just about everybody -- the apps aren't nearly as capable as the Google Apps, and there's no "glue" to build the kind of infrastructure most businesses (and many individuals) need. It isn't clear at this point if Apple's going to actively pursue the market. We'll just have to wait and see if the company builds it out.
Sorting through the Office 365 SKUsIf you're looking for a simple straight-up comparison of features and prices, you clearly don't understand the game. While Google Apps for Business remains relatively straightforward, with four packages and identical features, Office 365's ecosystem is starting to look like an Exchange Server CAL contract. I fully expect books, seminars, and postgrad university courses are in the offing, to help hapless customers pick from what's available.
Here's the supersimplified list:
Office 365 Small Business, for up to 25 users, does not include the Office 2013 desktop apps (though you would be forgiven for assuming otherwise). However, if you already have licenses for Office 2013, 2010, or even 2007, or Office 2011 or 2008 for Mac, you can use those suites with Office 365. Paying for Office 365 Small Business will let you manage your domain's email and share calendars, with 50GB of email storage per user. (There's no Active Directory, which may be a blessing.) You also get online videoconferencing and free website hosting. SkyDrive Pro comes with the package, with 25GB of file storage space, as does SharePoint with shared email and document folders. All of this costs $60 per year per person.
The other services Microsoft mentions as being included in the Office 365 Small Business package are, uh, iffy. Online conferencing, screen sharing, and instant messaging are available and free from many vendors, including Microsoft/Skype. Office Web Apps are free for anybody who signs up for a free SkyDrive account (which provides 7GB of storage per person). The mobile apps on offer work only on Windows Phones, at least at this point.
Office 365 Small Business Premium, for up to 25 users, adds subscriptions for the latest desktop versions of Office for each user. That's probably what you expected with Office 365. Each subscription can install up to five copies of Word, Excel, PowerPoint, Outlook, and Lync on PCs or Macs. You also get client-only subscriptions (that is, no server involved) for OneNote, Publisher, and Access. The Office 365 Small Business Premium package also includes licenses for Office Mobile for iPhone and Android (which InfoWorld's Galen Gruman describes as "pathetically bad"). This package also includes Office 365 On Demand, which lets you stream the desktop Office programs to any PC or Mac; they disappear when you log off. Office 365 Small Business Premium is listed at $150 per user per year.
Office 365 Midsize Business can take your company up to 300 users, with all of the Small Business Premium features, plus Active Directory to centrally manage user credentials, data access permissions, single sign-on, and synchronization. The bill goes up to $180 per user per year.
Business Class Email/Exchange Online Plan 1, for an unlimited number of users, drops back to a very limited feature set. You get email management and shared calendars, plus Active Directory, but no Office suite licenses. Price is $48 per user per year.
Office 365 Enterprise E1, for an unlimited number of users, still doesn't include Office licenses. You get the features in the Business Class Email package, plus online conferencing, screen sharing, and instant messaging (which, as noted earlier, are available free from many sources). You get SkyDrive Pro, which offers 25GB per user, plus tools to control access to the data. And you get SharePoint with shared email and document folders, free website hosting, plus Yammer Enterprise. That's all of the glue, but none of the Office apps, for $96 per person per year.
Finally, the big kahuna, Office 365 Enterprise E3, offers all of the above E1 features plus an Office subscription for each user (one subscription covers up to five PCs or Macs). You also get the iPhone and Android Office Mobile apps, archiving and legal hold capabilities for email, a legal compliance tool called eDiscovery Center that puts all of your main Exchange, SharePoint, and Lync data in one place, voicemail, and the Power BI tools for data analysis. Office 365 Enterprise E3 runs $240 per person per year.
Still need licenses for the Office desktop programs? You can mix and match any of the above plans with subscriptions to Office 365 ProPlus or you can buy (er, rent) Office 365 ProPlus without any of the other plans. Each subscription can install up to five copies of Word, Excel, PowerPoint, Outlook, and Lync on PCs or Macs, plus client-only subscriptions (no server) for OneNote, Publisher, and Access. You also get Office Mobile for iPhone and Android. If you already have a Software Assurance license, you can move it over to a new Office 365 ProPlus subscription.
I won't even mention the Exchange Online plan, the SharePoint Online plan, Lync Online, or the Kiosk plan. I've also glossed over the Volume Licensing plans for Office 2013 and Office Professional Plus 2013, with or without Software Assurance.
There are also specialized versions of Office 365 Government, Office 365 Education (as of Dec. 1, 2013, schools with Office 365 ProPlus or Office 365 Professional Plus licensed for all of their staff and faculty can get free Office 365 ProPlus licenses for all of their students), Office 365 University (four years of Office 365 on two PCs or Macs for $80 -- and you can renew the four-year subscription once, as long as you renew before you graduate), and Office 365 for Nonprofits (free to qualifying organizations).
Free trials are available for Office 365 Professional Plus (60 days), Office 365 ProPlus (30 days, max 25 users), Office 365 Small Business Premium (30 days, max 10 users), Office 365 Midsize Business (30 days, max 25 users), and E3 (30 days, max 25 users).
Confused yet? Make sure you don't forget the lowly Office 365 Home Premium (30-day trial), which includes the software -- Word, Excel, PowerPoint, and Outlook, plus stand-alone OneNote, Publisher, and Access, five licenses per subscription -- without the glue, at $80 per year.
Google Apps for Business optionsIn startling contrast, Google Apps for Business has just two primary options. The basic package costs $50 per user per year, and the Premium package costs $120 per user per year. The contents of the basic package haven't changed much in years. Basic includes Google Docs for word processing, spreadsheets, slideshows, forms, and data storage (all free at docs.google.com); Gmail and Calendar (free at mail.google.com); Google Groups (also free); a website building utility called Sites; the Postini spam filter; and a video-sharing app. Those paying for Google Apps for Business get 30GB of storage per user, allocated across both email and general online storage. There's a free 30-day trial.
The Premium package includes Vault, an email management package that helps with legal and compliance requirements, archives, domainwide search, retention, and restoring deleted messages. Vault lives entirely in the cloud; there's no application to install.
There's also a Google Apps Marketplace, an online store that sells apps designed to run with Google Apps.
Google Apps for Government, for governmental organizations in the United States only, has full FISMA accreditation and costs $50 per user per year. Similar versions are available in some other countries.
When you pay for Google Apps, you pay for 30GB of Google Drive and email storage space for each mail account, for the programs that let you manage an unlimited number of email accounts on your domain, and for phone support. Google Apps for Education and Google Apps for Nonprofits are free. All packages can handle an unlimited number of users.
What's new in Office 365At its most fundamental, the major change is that Office 365 now includes Office 2013. With a slew of interesting new features and a handful of dubious "improvements" that can easily be undone, the new Office suite makes it easier to put your data in the cloud where it will be right at home with the rest of Office 365. There are worthwhile features to make Office 2013 touch friendly, as well as changes to the plumbing that make it work better with the rest of Office 365.
Thanks to vast improvements to the Office suite's Click to Run (C2R) capabilities, it's faster and simpler to set up Office programs on licensed machines, to manage the programs (for example, add or remove machines from the authorized list), and to keep on top of patches (C2R apps check every time they're initiated and install patches as available). To date, Microsoft's track record on C2R patches has been much, much better than that for the standard Windows Update/WSUS route.
Don't let the term "Click to Run" confuse you. Office 365 installed by C2R puts the programs on your local drive. You don't need to be connected to the Internet in order to run all of your Office programs -- the streaming download typically occurs only once. You can, however, remove a machine from your authorized list, and that machine will no longer be able to run the Office 365 programs.
The Office apps are now bound together by the user's Microsoft account, so recent document lists, custom dictionaries, and some settings travel from machine to machine -- in some cases, to the Office Web Apps as well. Save a Word doc on SkyDrive using your laptop, then pick it up with the Word Web App or a copy of Word on another machine; when you return later, Word is smart enough to offer to go back to the point where it was last edited.
New "Wave 15" (2013) versions of Exchange Server, Lync Server, and SharePoint bring dozens of worthwhile new features. Top on the list might be the streamlined (and Web-based) Exchange Administration Center, which has taken on new responsibility for managing public folders. The Outlook Web App picked up the ability to store messages locally and have everything updated when the computer reconnects to the Internet. The new Lync Web App lets users without the Lync client join and participate in meetings using just a browser. These are only a few of the most important improvements. Rest assured that all of the advances you see in on-premises server capabilities are being mirrored in Office 365.
Office 365 Enterprise now offers tools for splitting out on-premises servers and data stores from analogous services in the cloud. In most cases, on-premises and cloud settings -- including user management -- take place in one, integrated interface. That should make it much easier to migrate to the cloud.
Of course Office 365 now gets along nicely with Windows 8.1, with tiles put where you'd expect. It enhances (or at least enables) touch and pen input. There's also much deeper integration with SkyDrive Pro, a standard part of all of the business versions of Office 365. (SkyDrive Pro isn't really related to SkyDrive, but an expansion of a SharePoint feature formerly called MySites.)
You'll also find an enormous array of security controls that scale from small companies up to large enterprise. These include the likes of centralized retention control in eDiscovery, sharing restrictions in SharePoint (and thus SkyDrive Pro), lock-down features in Office proper that limit the use of add-ons, Lync administration features, and remote administration of mobile devices, including the ability to change PINs and wipe lost or stolen devices.
The Office 365 effort is huge, complex, and continuous. If you want to watch Office 365 improvements as they happen in real time, keep an eye on the Office 365 Service Updates and Service Updates "wiki" page. There are hundreds of changes under way. For example, this update page for Office 365 Small Business and Small Business Pro links to many dozens of articles that cover recent changes in Office 365.
What's new in Google AppsWhile you need a graduate degree in Office-ology to stay on top of the Office 365 changes, much less the options, Google Apps retains its svelte, pointed focus. Depending on your predilections and needs, its leanness may be its greatest selling point or its Achilles' heel. Google Apps hit the scene years before Office 365 was a glimmer in Ballmer's eye, and it continues to stand out as a straightforward workhorse. But it isn't fully compatible with Office documents, and it doesn't have Office 365's massive control infrastructure.
Google's developments in the past two and a half years span a wide range of improvements, including the addition of Google+ and Hangouts, a major Gmail redesign, admin alerts, and many places in between. However, several of those improvements were made to the apps themselves, not to the official "Google Apps" umbrella that binds the apps. For example, Google still doesn't have a Google Apps-style controlled environment for Google+. While a Google Apps admin can turn Google+ on or off as a whole, the admin can't control who's interacting with whom (yet).
Google has been criticized for not keeping up with the Joneses -- or the Offices -- in many areas, including security and admin control, unified communications, social networking, and document compatibility, always a sticking point. Google Apps doesn't have a "Facebook for the Enterprise," and many customers have no problem with that at all.
Google has a lengthy list of detailed improvements to Google Apps, on its Google Apps Updates blog. From sharing Google Docs files with someone who doesn't have a Google Account, to tips on converting to the new Google Groups interface, the blog lists hundreds of improvements and changes. To many users, the most important change to Google Apps in the past couple of years is the ability to download and save Gmail messages and Calendar items, which is rolling out just now. For enterprises, the mid-2012 launch of Google Apps Vault was a key addition. For an overview, check out Google's Vault FAQ.
Not so long ago, a major selling point for Microsoft solutions was the ubiquity of Office. Experience with Microsoft Office was expected by employers, and by the same token, employees expected to work with Word, Excel, Outlook, or PowerPoint in a new job. That's changing. The number of potential employees that actively use Gmail, for example, has never been greater. Some potential employees may find not having to use Microsoft Office applications a distinct employment incentive.
Privacy differencesOne important consideration, when comparing Microsoft and Google products, has nothing to do with price or features. It has everything to do with privacy. Given recent revelations about our government snooping on anything that moves, the questions about corporate privacy and how companies such as Microsoft and Google will use your data have only become more pointed.
Both Microsoft and Google very explicitly explain that they may serve up your data in response to a properly filed subpoena. Both claim they will try to contact you if the situation arises, although they both are barred from notifying you should the subpoena involve certain governmental agencies.
Office 365 vs. Google Apps: SetupThe hardest part of setting up a free trial for Office 365 lies in choosing the right plan to begin with. If your company is on the "S" side of the SMB fence, the Office 365 Small Business Premium has a free 30-day trial for up to 10 users (actually, 10 email addresses). The plan taps out at 25 users.
If your company has more than 25 email addresses or you figure it'll take more than 10 addresses to get the features tested, start with the Office 365 Midsize Business trial. That gets you started with 25 free email addresses, and everything you set up in the trial can stick with you until your company grows to more than 300 users. That's the approach I took for this review.
Once you sign up for an ID (very simple, no credit card required) and log on to the Admin site with your new ID, you're greeted by the Admin Center dashboard, shown in Figure 1. You can start with the Setup link on the left of the Admin Center, but there's a better way: Microsoft's Office Blog has a new video that will step you through the process. If you want to skip the sales briefing at the beginning (though it offers a good overview of features you may not know about), the meat of the setup help starts at 4:50.
As part of the setup process, you need to hook Office 365 into your existing email address. If you already have your own domain and email address (such as Woody@AskWoody.com), you have two options: You can either live with the assigned domain name (blahblahblech@AskWoody213.onmicrosoft.com), and stick a file on your website to verify that you own it (as I had to do with AskWoody.com), or you can buy a new domain from GoDaddy (typically $13 per year).
Setting up Google Apps for Business, by contrast, is like falling off a log. You have to go through the same Texas two-step to verify that you own a domain name or buy a new domain from Google ($8 per year); otherwise, the setup process is blissfully simple. Get your admin account set up and you'll find yourself at the Google Apps Admin Console shown in Figure 2.
Click Start Setup, verify that you own the domain name you said you own (a process that's now assisted, step by step, as long as you can log on to your domain's host with admin rights over your domain), and you're ready to set up all of the details for a Google Apps for Business account.
In the past two and a half years, both Google Apps and Office 365 have made enormous strides in their setup sequences. Office 365 now remembers your settings as you go through setup, so you can leave off and pick back up at any time. And the Google Apps approach to injecting a text file on your existing domain is very slick indeed.
The primary differentiation between the two: Office 365's setup is much more complex, simply because the package is much more complex. For example, Office 365 has licenses for individual users and packages that can be granted or withdrawn at any time, as shown in Figure 3. Google Apps are Google Apps, and they're available with or without a license.
I had problems with the Results step on a new Office 365 user -- I got caught in a loop that consistently told me, "Sorry, it looks like that email address is already in use," even when I unchecked the box and told the setup routine to skip sending emails. I have no idea why. Getting out of the loop involved clicking Back many times. I couldn't simply back out of that part of setup.
Office 365 vs. Google Apps: FeaturesYou no doubt know that Google Apps (with or without the "For Business" appendage) is only partially compatible with the standard Office file formats. Many people find the online-only Google Apps do everything they need. But Google Apps have neither the depth nor the breadth (nor the bloat!) of the traditional Office programs.
The knife cuts both ways. Google Apps were designed from the ground up for compatibility with all sorts of devices. They have multi-user collaboration baked in. Google Docs, Sheets, Slides, Gmail, Calendar, and Google Drive can store data on a local computer, but only by using the HTML5 capabilities of the Google Chrome browser and apps written specifically to run with Chrome.
The Microsoft Office programs are, well, the same programs you've used for the past hundred years or so. If you choose the right Office 365 package, you get full-featured Windows and Mac OS versions. They come along for the ride.
The Office Web Apps are free for SkyDrive, and they can be licensed and set up for private clouds. Just last month, Microsoft finally brought autosave to Word Web App, catching up with the state of the art in online word processors set a decade ago. We also got a new real-time co-authoring capability for Word Web App, which compares reasonably well with the Google Docs feature. (In spite of what you may have read, the online versions of Excel, PowerPoint, and OneNote have had simultaneous co-authoring for ages.)
When you subscribe to the business versions of Office 365, you get two additional online products that aren't available free to just anybody. First, you get the "pathetically bad" Office Mobile for iPhone and Android, which I mentioned earlier. Second, you get the Outlook Web App. If you're currently using Outlook and you find yourself needing to check your mail without your laptop, being able to get at your Exchange (not Outlook.com, but Outlook) email, with all of Outlook's bells and whistles, just using a browser, can be a real eye-opener. See Figure 4.
There's a huge array of additional differences between the productivity apps in Office 365, compared to Google Apps for Business. Office documents almost always survive a round-trip through the Office Web Apps. For example, you can use Word Web App to open a fairly complex Word document, make a few changes, save it, and expect to get back a document that looks more or less like the original. You can't add any fancy formatting to the document in Word Web App -- the options aren't there -- but at least you won't break anything ... usually.
Google Docs, on the other hand, has no such guarantee. In my experiments, I've found that most simple documents go through the round-trip with few problems. Save a straightforward memo with Google Docs (File, Download As, Microsoft Word), and you're likely to come up with a reasonable rendition in the DOCX file. Not long ago, Google Docs broke a very large percentage of all the Word documents handed to it. Now, it appears to me as if Google refuses to open Word documents it doesn't understand. That's an improvement, albeit a frustrating one.
That said, Google Docs, Sheets, and Slides have nary a fraction of the features offered in the desktop versions of Word, Excel, and PowerPoint. You would never want to put together a moderately complex document in Google Docs, for example. Just getting the headers and footers to work right would drive you nuts. Then again, complicated headers and footers in Word aren't a walk in the park, either.
The Office programs are well established and mature. Google Apps are scrappy and improving. Case in point: pivot tables. While the Google implementation of pivot tables in Sheets isn't as capable (or complicated) as Microsoft's, Google hits the high points very nicely.
Back when every single desktop needed a copy of Office (or at least when the powers-that-be assumed every desktop should be Office-equipped), forgoing Office apps on most PCs was unthinkable. That's changing. Now, it would be worthwhile to take a hard look at how badly your organization needs a chicken in every pot.
Office 365 vs. Google Apps: Ease-of-useOnce again we're back to Queen Elizabeth 2 vs. the Sloop Google. It all depends on what you want to do.
If you're accustomed to using Outlook on the desktop, the Outlook Web App will look more or less familiar, whereas Gmail may turn your world inside out.
If your users are accustomed to Word, Excel, and PowerPoint, the Office 365 choices don't change a thing -- quite literally a zero learning curve. On the other hand, if your people are using Google Docs at home already or if they've come to loathe Office's more frustrating aspects, perhaps the much simpler Google Docs approach will fit the bill.
Over time, Gmail and Outlook.com have come to look and act much alike. Although there are purists who would argue the supremacy of one over the other, on balance, I find it just as easy (or as hard!) to wean people from desktop Outlook and onto either online service. If your transition to Office 365 includes moving to Outlook.com, you're in for some user pushback. On the other hand, if most of your users already have online email accounts, going to either Outlook.com or Gmail should be a relative piece of cake.
Assuming you come from an Outlook shop, and you're going to continue using Outlook on the desktop, Office 365 will fit like an old glove. Since many (if not most) office workers these days are familiar with online email systems, the learning curve for Gmail shouldn't be daunting. Getting used to Google Apps might present a few challenges, but most will find it quite straightforward, particularly if they're inured to the complexity of Office.
Office 365 vs. Google Apps: AdministrationAdministering an Office 365 installation can be demanding, precisely because Office 365 offers a wide array of options. Many admins who aren't used to handling Exchange, Lync, or SharePoint will need experienced help to get the beast up and running. Administering Google Apps for Business is comparatively easy because the choices are straightforward and well laid out.
Office 365 has so many nooks and crannies, as well as so many tools at hand, that someone new to the product would be well advised to look into everything on offer -- that means training, lots of time with Google (er, Bing), participation in one or more of the online fora, and likely consultation with other folks who have been around the block a few times.
When evaluating the administrative burden of both products, the edge goes to Google Apps. While Microsoft has struck an excellent balance between capability and ease of administration with a very polished and extensive set of admin tools, Office 365 is a much broader, more encompassing product that is plainly more difficult to manage.
Office 365 vs. Google Apps: ValueGoogle Apps runs $50 per user per year, with no contract required. Adding Google Apps Vault for archiving and compliance brings the price up to $120. The other Google products that I mention in the Features section are all free, all the time.
As I explained in the complicated discussion at the beginning of this article, Office 365 with Office 2013 licenses vary between $150 and $240 per year, per head.
Google Apps is an excellent value, period -- it does a lot, for a pittance. Office 365's value is entirely locked up in whether your company wants to rent the latest version of Office Professional Plus. If you need the Office desktop productivity suite and can move from your current Software Assurance plan, then Office 365 is every bit as good a value as Google Apps.
Office 365 vs. Google Apps: The bottom lineThe two packages are neck-and-neck in the ratings, but they're completely different in real life. Google Apps is small and easily administered; it covers the high points; and it doesn't try to reach into the more obscure corners of your company or organization.
Office 365, on the other hand, offers the best (and most complex) enterprise support in the business. I'm continually amazed at how well Microsoft has built out Office 365, rolling feature upon feature into the mix, yet keeping the whole package remarkably stable, usable, and manageable.
For large enterprises with strict data controls and complex, diverse operations, Office 365 has no equal. For any organization with less-stringent requirements and a willingness to part with companywide Office document compatibility, Google Apps offers a good, inexpensive, and reliable alternative.
If you're looking at Office 365 and Google Apps for your small business and you don't have a pressing need for Office doc compatibility or a tied-down security requirement, pull out your calculator (or your Google Sheet) and do the math. On the Google side, you have $50 per year per person, plus the price of the necessary copies of Office (rent or buy). On the Microsoft side, Office 365 will run $150 per person per year for up to 25 users, or $180 per person for up to 300 users -- $240 per seat to get all of the bells and whistles.
I bet you'll find that, for most small and midsize businesses, Google Apps is considerably cheaper -- but it may not do what you need to do. There's a reason why Office 365 is doing well in large enterprises.
This story, "Review: Microsoft Office 365 vs. Google Apps," was originally published at InfoWorld.com. Follow the latest developments in cloud computing at InfoWorld.com. For the latest developments in business technology news, follow InfoWorld.com on Twitter.
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