Review: Microsoft Office 365 versus Google Apps for Business

With the launch of Microsoft's cloud offering, Office 365, the race for corporate adoption is truly on. Adrian Bridgwater looks at the pros and cons of Office 365 and how its features compare with those of Google Apps to see which provider is best placed to win that race.

Microsoft has launched its new cloud-based version of the widely used Microsoft Office, in the shape of Office 365, which includes the Office, SharePoint Online, Exchange Online and Lync Online products. Charged for by what the company calls "predictable" monthly subscription, Microsoft claims that this release comes on the back of testing carried out by some 200,000 customers who signed up for the beta version, which was introduced last year.

Whether Microsoft can take on Google Apps in the race to corporate adoption of these online services by real businesses will be decided by cost, usability and security. So who comes out on top?

How much is that cloud service in the Window?

Microsoft has been nothing if not complicated with its pricing structure for Office 365. A hot-desking kiosk user who doesn't own his or her own computer can gain entry-level access to Exchange and SharePoint for £2.60 per month. At the other end of the scale, a higher-end enterprise user will need to shell out around £15.80 per month for a licence covering Office and the Lync Plus voice communications product. (Note that prices quoted here are converted from US dollars at the exchange rate at the time of writing.)

Pricing plans for small businesses and professionals are covered in full on the Office 365 website, but to summarise, Microsoft's P1 plan at £3.75 per month is the starting point. The P1 plan includes Exchange e-mail, calendar and contacts, a 35GB mailbox, Office Web Apps, a simple public website, desktop sharing, online meetings and a few other morsels.

Microsoft then has four E plan pricing options for so-called "information workers", and the K plan for the "kiosk worker" family, where prices are pitched to reflect usage by workers Microsoft gauges to spend only 5-10% of their time at a PC.

The Google Apps for Business pricing plan on the other hand is more straightforward. Pricing on its Flexible Plan is a flat $5 (£3.10) per month; which drops to $4.16 (£2.60) if users sign up to the Annual Plan. Although Google's base figure of £2.60 is suspiciously close to Microsoft's kiosk user price, Office 365 users will need to spend at least $24 (£15) per month on Plan E3 before they get the same e-mail archiving, data export and publicly available status dashboard function available in Google Apps.

Any distinguishing features?

Google is at pains to highlight what it labels as its other key distinguishing features, which it lists as the ability to provide mobile document and spreadsheet editing and the "hundreds" of automatically integrated third-party applications that are available to Google Apps for Business users.

"You don't need to buy additional licences to work with others, or hope people outside your company have upgraded to the same software. If you have a Google account, you can collaborate," says Shan Sinha, Google Apps product manager in the company's official blog.

"Office 365 is optimised for Windows-based PCs and devices, which reduces your flexibility. Our applications are designed to work well on any device, on any operating system," he adds.

Indeed, Office 365 is aligned to sync with Windows Phone 7, and Microsoft made much of this during its live launch webcast. Google's offerings, on the other hand, will work with desktops, laptops, tablets and smartphones, plus they are compliant with Windows, Mac OS X, Linux, Android, Blackberry, iOS and Windows Mobile. But then you would expect this because Google's apps are native to the web and not "legacy" desktop products per se.

But Microsoft's desktop on-premise heritage is both a good thing and a bad thing. While Google's apps do a good job of existing "in the cloud" and proving a comparable online version of a desktop client, overall they are arguably less functionality-rich than Office across the board. Microsoft's domination in the productivity applications market - Word, Outlook for e-mail, Excel for spreadsheets, etc - is the ace up its sleeve and the company will play on the "comfort through familiarity" line as much as it can.

Google's Sinha argues the other side of this coin, saying that supplier lock-in is precisely what the search giant is trying to avoid. "By design, we make it as easy as possible for you to move off Google Apps if you want. We have a dedicated team of engineers whose sole goal is to help you get your data in and out of our products for free. You cannot just take legacy, desktop software, move some of it to a datacentre and call it 'cloud'. [Google] Apps was born for the web and we've been serving hundreds of millions of users for years," he says.

Look and feel

Sinha's last point is probably valid; Office 365 is not a native cloud application, it is essentially a hybrid solution. That said, Microsoft's installed base is massive and Windows-focused IT administrators will find the core set-up and operational options both familiar and fairly pleasing, if perhaps a little clunky and slower than they are used to at first.

In terms of operational look and feel, Microsoft probably has the upper hand on Google. This is again down to the fact that most of us will be more familiar with typing e-mails into an e-mail client application and text documents into Word as opposed to any online equivalent. Google Apps makes a good attempt at integrating with Office and Outlook, but it is a bit like running Internet Explorer on a Mac (or driving a car down a train track) - perfectly possible, but not exactly built from the ground up for compatibility and a snug fit.

Google, for its part, points out that what it may lack in terms of Office-related integration, it wins in document interoperability. "It is important to notice that the use of Word/Excel/PowerPoint 2010 online is contained within SharePoint 2010. So sharing privileges are inherent from this container. Users of Google Docs can invite users to their documents (inside/outside the organisation) independently of the permissions of the Google sites where they may be listed," said Google, in a press statement.

Of course, if users want to edit these documents further from this point, they will need to install Office 2010 SP1. Team collaboration then relies on check-in/check-out capabilities, which rely on client-server replication mechanisms. This fact, from Google's perspective at least, is regarded as a negative - whereas Microsoft is probably just as likely to spin it as a positive and harp back to its "widely installed user base" again.

Security in question

So now we come to the $64,000 question, or the "showstopper" if you prefer the term, that is being bandied around by users on Office 365's web forums. What about security?

Well, Office 365 Enterprise Plan users will be able to connect to SharePoint services using secure https SSL-encrypted connections. The Secure Sockets Layer (SSL) protocol provides a cryptographic system for the secure transmission of documents over the internet. So that's all good then? Well, not quite.

Although enterprise users will get this protection, professional and small business plan users will not get SSL-encrypted defences. For most small businesses - and professionals for that matter - there is always a need at some point to work with sensitive documentation, even if it is nothing more than the company accounts, which, in this instance, will not be protected.

Explaining the company's decision to structure the Office 365 offering in this way at launch stage, Microsoft senior product manager for SharePoint Online Mark Kashman provided the following statement: "We made this decision for simplicity and usability. In SharePoint Online for small business, there is user name and password protection security for intranet-level team site(s). Per the early feedback we are receiving, Microsoft is in design planning to bring https to the SharePoint Online for small business offering in a future update."

Who wins - Google or Microsoft?

So who wins at the end of the day, Google or Microsoft? It doesn't really matter does it? Both streams of application service development are guaranteed to be with us for the foreseeable future. Microsoft probably has the edge in terms of functionality, but Google probably has the edge in terms of cross-platform cross-device interoperability. Actually, you can drop the "probably" element from both of those statements.

What really matters is how small business IT departments will react to the current options if they are about to encourage the use of cloud-based applications in their organisation.

On a practical level, Google's structured support and help options outstrip Microsoft's "self-service" help offerings, but this may change over time. Microsoft's shift towards the cloud is arguably behind Google's native online pedigree; plus Microsoft's platform was primarily designed to work in an on-premise (not necessarily connected) kind of a way. This is likely to be less evident as time goes on, but as we stand today this is true.

What matters most is the question of where IT administrators will experience the most friction if they are attempting to roll out either of these service options to their user base. On the face of it, Google Business Apps is more straightforward in terms of set-up and overall management. Plus, many small business users may never have come across SharePoint and Lync (Microsoft's messaging and collaboration component) before, so that may be off-putting.

As we balance our initial equation governed by cost, usability and security, it is hard to pick a clear winner. Both Microsoft and Google's services offer a 30-day free trial, so a practical hands-on test is probably the best option.

As for me, the reviewer, if I had to choose, I would side with Microsoft and say that it is a better overall product with a better-engineered look and feel. Well, you did ask - didn't you?

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