Office 365 vs. Google Apps: The InfoWorld review

With Office 365 now available in final form, here's what you need to know to decide if Office 365 or Google Apps (or neither) is right for your organization

Everything's going to the cloud, but only the hopelessly naïve would believe it's a stairway to heaven. Given the current economic situation, there's lots of incentive to rent only what you need, rather than buy enough to handle the heaviest workload. There are also plenty of reasons to reduce the general level of expertise needed to keep your systems working. But it's by no means certain that the cloud can deliver in either department -- and perform in a secure, reliable way.

Can your company save money by paying Microsoft or Google to take on what you'd otherwise attempt in-house? What kinds of problems can you expect? What benefits? Will either of these solutions make sense for you, or is the grass always greener on the cloudy side?

[ InfoWorld's Galen Gruman tested Office 365 on mobile devices, Macs, and Linux; see where it works. | Get the no-nonsense explanations and advice you need to take real advantage of cloud computing in InfoWorld editors' 21-page Cloud Computing Deep Dive PDF special report. | Stay up on the cloud with InfoWorld's Cloud Computing Report newsletter. ]

Clash of the clouds
Before we attempt to answer those questions, one thing must be stated flatly: Office 365 and Google Apps are vastly different products. Office 365 is meant to be used with a locally installed version of Office (preferably Office 2010), whereas Google Apps lives 100 percent in the browser. To use a hackneyed metaphor, we're talking apples and oranges. With so many feature variables between the two products, blanket pronouncements don't make a lot of sense.

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 and light and to hit the high points. Google Apps includes Google Docs for word processing, spreadsheets, slideshows, 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.

Overall, comparing Office 365 to Google Apps is like comparing the QE II to a sailboat. Both of them will get you over the water, but they do it in completely different ways -- especially on the server side. (To dig deep into the online versions of Exchange 2010, SharePoint 2010, and Lync 2010, see InfoWorld's Office 365 preview; little has changed since then.)

If you revel in the intricacies of Exchange Server 2010, you'll be happy to know that all of that power and complexity carries through to the Microsoft-hosted version, although there's a simplified interface sitting on top. There's also a peace-of-mind factor: Microsoft takes on the care and feeding of Exchange, SharePoint, and Lync -- including maintenance, security, backup, and uptime. For those of you in large organizations, Microsoft will let you split server duties on-premises and in the Microsoft cloud, an inviting prospect if your company has a handful of big centers, with small satellites spread out geographically.

Finally, a word about file compatibility -- which remains a sticking point for both Office Web Apps and Google Docs. Opening an existing Office document in either of these companies' online apps works reasonably well, but it's not unusual for Google Docs to garble heavily formatted Word documents. In general, Microsoft Web Apps do a better job displaying complex Word documents than Google Docs does.

Setup: The quick and the bloated
The first setup hurdle to clear involves email. On the Google side, you have to migrate your current mail server over to Gmail. On the Office 365 side, you need to get Exchange hooked up and get the mail flowing through it, but there's much more on offer.

If you're looking at moving some of your company's functions into the cloud, and you aren't wedded to Exchange Server, spend some time with Google Apps. Taking Google Apps for a test-drive is very easy. Start with the setup wizard. After you verify ownership of your domain name (generally by putting a specific file on your website), it only takes a few clicks to follow the wizard, set up users, and get going (see below).

The setup wizard, integrated into the administrator's control panel, makes it very easy to get started with Google Apps for Business.
Figure 1: The setup wizard, integrated into the administrator's control panel, makes it very easy to get started with Google Apps for Business.

The wizard has an interesting series of steps that show you how to test Gmail using a "real" email account -- say, the email address you're using right now -- without disrupting the current flow of mail. If you're using Outlook or some other email package, and you can tell your mail server to send duplicate copies of your inbound messages to a different server, that's all you need. In my case, I wanted to test with my regular email account,, which I normally handle through Outlook. I followed the instructions in the Google Apps setup wizard and had my mail server send a copy of inbound emails to Bingo. Any mail sent to my email address appeared in both my regular Outlook inbox and in my Google Apps Gmail test inbox. I could test with live data without affecting the normal flow of email. Working in a similar fashion, you can gradually move people over to Gmail without upsetting their current email procedures, and both the "legacy" and new Gmail accounts will work in concert.

The Google Apps setup wizard is always one click away, using the admin control panel. It remembers your location in the setup sequence, allowing you to leave, then come back and pick up where you left off.

By contrast, setup in Office 365 isn't nearly as easy. Log in with an admin ID, click on the Admin tab, and you're presented with a dozen options (see Figure 2).

Office 365's setup is complicated -- but then, so is the package.
Figure 2: Office 365's setup is complicated -- but so is the package.

Part of the reason Google's approach seems streamlined by comparison is the old apples-and-oranges thing: There's simply so much more to set up in Office 365.

When you add new users in Office 365, they're immediately given email inboxes, a default Team Site, and instant messaging. Beyond that, you have to carve out your custom environment. Will you implement single sign-on or require users to sign on once locally, then again in the cloud? If so, there's a complex series of steps to get single sign-on working. Do you want Active Directory services to apply both locally and online? If so, you have to set up syncing Active Directory between your on-premises server and the Office 365 server. You have to switch domains over to the Office 365 server; manage SharePoint permissions; and get Lync configured. You also need to push updates for Office 2010 or 2007 onto all of your users' machines, so they can connect with the Office 365 servers and services. That's just to get started.

If you're moving from Microsoft's BPOS to Office 365, the transition shouldn't be difficult. But if you have an on-premises Exchange Server(s), Office 365 setup is going to be a big job, particularly if your servers have been extensively customized. You can, however, selectively migrate email from your own Exchange Server to the Office 365 Exchange Server. Move one user or a small group of users at a time, and they won't even know it's happening. Look up Email Coexistence in the Administrator Introduction.

Moving from Exchange Server to Google Docs can be trying, too. Last month, in InfoWorld's Cloud Computing blog, Desmond Fuller posted an excellent firsthand account of his transition from an old Exchange Server installation to Google Apps for Business. With 100 users, the transition wasn't easy: "The migration ... was surprisingly difficult and problematic, and we got little help from Google."

In my InfoWorld Test Center scores, I give Google Apps setup a 9 and Office 365's a 7, assuming you're moving from an environment without Exchange Server. If you're moving from Exchange Server, much depends on how much tweaking you've done to your server. If you're moving from BPOS, Office 365 should be a 9.

Features: Leviathan vs. lightweight
Comparing the features of Office 365 with those of Google Apps immediately returns us to the apples-and-oranges cliché. Feature supremacy all depends on what you intend to use and how you intend to use it. Office 365, combined with Office on the desktop, handles a universe of demands, from tricked-out email to professional presentations simulcast on meeting attendees' smartphones; from full team collaboration on a complex financial model to shared details about customers or suppliers, to voice systems far more advanced than PBX.

Google Apps, on the other hand, gives you a hodgepodge of tools for administering your company's online email, storing and sharing files, sharing calendars, free long distance phone calls, team collaboration on documents, online forums, and much more. Google Apps delivers all of that at about one-fifth the price of Office 365, assuming you already have (or don't need) Office on the desktop. The demands on technical personnel are much smaller with Google Apps, as well.

The online versions of all of the apps -- Office Web Apps and Google Docs -- don't even come close to the full desktop versions of Word, Excel, and PowerPoint. If your needs are very simple, online Word or Google Docs can whip up a memo or white paper, but if you need any sort of advanced formatting, forget it. As mentioned earlier, Microsoft's online Word does a better job of rendering graphics than Google Docs, but opening a complex document in any of the free apps, making changes, then saving it can cause all sorts of problems. The online versions of Excel, both Microsoft and Google, have trouble with any sort of graphing. And presentations in Google's online app are a far cry from PowerPoint.

Most companies have a core of employees who need the features in Microsoft Office. Casual users may only need the online apps. You may be able to save quite a bit of money if you don't need Office on every desktop.

If you currently have Office 2007 or 2010 on all of your machines, but aren't using Exchange, SharePoint, or Lync, Office 365 opens up all sorts of functionality. Renting Office 365 brings all of the features of Exchange, SharePoint, and Lync -- basically the same features you could get by setting up your own servers -- but Microsoft handles the back end in the cloud. Some of the high points:

  • Outlook Web Access (see Figure 3), which gives you nearly all of the features of the desktop version of Outlook. The current OWA's now accessible from any modern Web browser, on a PC, Mac, tablet, or phone. You can work on the Web and have everything synchronized back to your desktop. And vice versa.
  • Support for voice calls, which handles inbound calls a lot like email. If someone calls and leaves you a message, you get a text transcript of the first part of the message sent to your phone via SMS.
  • Calendars and contacts can be shared securely, and extended to other trusted companies. Office 365 handles full rights management (specifying read-only on certain documents, for example, using Rights Management Services), delivery status notifications, and the like.
  • SharePoint file sharing, which lets multiple people collaborate on a single document simultaneously, in a rich, multilingual environment. SharePoint also offers a top-notch HTML editor, wiki-style markup, and centralized document management and administration through Team Sites.
  • Lync offers VoIP phone calls, instant messaging, meeting support, and videoconferencing, both stand-alone and embedded inside the various Office apps.
Outlook Web Access may be the single most compelling reason for Outlook shops to move to Exchange Server and Office 365.
Figure 3: Outlook Web Access may be the single most compelling reason for Outlook shops to move to Exchange Server and Office 365.

Of course, that hardly scratches the surface of all of the features in Exchange Server 2010, SharePoint Server 2010, and Lync 2010. Microsoft offers a series of detailed service descriptions specifically for the Office 365 server components on its website.

Google Apps offers some comparable features, but in a different way, and it doesn't try to touch all of the Office 365 bases:

  • Although Gmail looks and behaves quite differently from Outlook Web Access (see Figure 4), it provides all of the major OWA functions, some of the minor ones, and adds a couple of unique features, including a thread-prioritizing scheme, plus a host of add-ons via Google Labs. Google Chat -- with video -- is directly accessible through Gmail.
  • Google Calendars can be controlled by the administrator, but only to restrict the extent that information is shared outside of the domain. Users have control over who can see their calendars inside the domain. Contacts are handled inside Gmail in a way that's not nearly as robust as in Outlook.
  • Google Apps doesn't have a telephone component per se, but the free Google Voice has many of the features you would expect from a VoIP system -- a single forwarding number, unlimited free domestic calls, call screening and blocking, SMSes, and conference calls -- in addition to transcribed notifications from inbound voice calls.
  • Google Apps doesn't have fancy, customized Team Sites, but Google does have a feature called Cloud Connect that provides sharing and collaboration tools for Microsoft Office applications -- Word, Excel, and PowerPoint -- and works on files stored in Google Docs. Multiple users can edit the same file simultaneously. Last week, Google announced an extension to Word, Excel, and PowerPoint that lets you open and save documents directly in Google Docs. Also, integration with Box.Net brings many SharePoint features to Google Docs.
  • Google Groups offers a few features that are vaguely reminiscent of SharePoint capabilities, including online forums, managed mailing lists, and group-accessible storage.
Gmail doesn't look or behave like Outlook Web Access, and some people find the change disconcerting.
Figure 4: Gmail doesn't look or behave like Outlook Web Access, and some people find the change disconcerting.

As long as you have Outlook installed on your PC, working on email without an Internet connection presents no difficulties for Office 365. But with Gmail, you have to run Google Sync to download your messages to your PC before you lose your Internet connection, then run it again to bring everything back once you're plugged back into the grid.

If you don't plan on paying for Microsoft Office on every desktop, the relative benefits of the two packages changes considerably. It's much easier to use Office 365 with the (free) Office Web Apps, and to use Google Apps for Business with the (free) online Google Docs, so any evaluation of the relative merits of Office 365 and Google Apps has to take into account the features in Office Web Apps vs. the online Google Docs.

That's problematic, as the online versions of Word, Excel, OneNote, and PowerPoint -- as well as Google's online word processor, spreadsheet, and slideshow programs -- are changing constantly. For example, Office Web Apps added a rint function to Excel just last month.

On balance, Office 365 gets a 9 for features, and Google Apps a 7 -- assuming you will work in an environment with some version of Microsoft Office on every desktop.

Ease-of-use: Familiarity breeds comfort
When you're talking about ease-of-use from the end-user standpoint, Microsoft has an unfair advantage. When users encounter an Office alternative, they're not likely to appreciate some upstart's attempt to reinvent the UI (Microsoft has done enough of that already).

The burden is on Google Apps to create an inviting user experience, and for the most part users will find it a snap to learn their way around the core apps and get productive -- and with fewer features, there's less to learn. But there's one major hurdle: Gmail. We can debate the relative merits of Outlook (or OWA) and Gmail forever, but for the typical user who has invested months of blood, sweat, and tears on learning Outlook, the transition to Gmail can be traumatic.

The Gmail interface is completely different, whereas the latest version of Outlook Web Access (see Figure 3) pretty closely resembles Outlook on the desktop. Gmail (see Figure 4) packs a lot more information into a smaller area and puts the most common functions in completely different places. Advanced users may prefer the Gmail layout, but most others will prefer the devil they know.

To its credit, Google offers an easily customized Web page to help users make the transition from Outlook to Google Apps (the Google Apps Learning Center covers the same material in a different way).

In my experience, the second biggest ease-of-use problem is coherence. As you can see from the features list, Microsoft has packaged all of its services under one big umbrella. The various components work similarly -- although by no means identically. Google's apps, by contrast, consist of a hodgepodge of programs and services, with different pedigrees, names, operating procedures, restrictions, licensing, and packaging. All of that leads to user confusion, such as: "Should I use Google Voice or Google Talk or Google Chat, or just call you on Gmail?"

Both companies need to improve the integration of disparate pieces of their packages. I dread to think how Microsoft will integrate Skype into its current offerings.

I give Microsoft an 8 for ease-of-use, assuming you come from an Outlook shop. Primarily because of the learning curve for Gmail and the other Google Apps and the fragmentation of Google offerings, I give Google a 7. Remember, this rating applies to end-users -- not to administrators.

Administration: Complexity vs. simplicity
I wrote about administration complexity with Office 365 in my Office 365 beta preview. InfoWorld's J. Peter Bruzzese also had problems with the Office 365 beta. In short, the admin sequences are confusing, with many blind alleys that are impossible to escape. As best as I can tell, those problems persist in the shipping Office 365 admin panels.

Also, if you use Active Directory, you face some serious challenges synchronizing with Office 365 (see Microsoft's Active Directory synchronization road map). Adding your domain to Office 365 can be tricky. Microsoft does, however, have a tool to help with changing to single sign-on, making it much easier for your users to access Office 365 using Active Directory Federation Services.

By contrast, the Google Apps admin options are sparse but well put together. The re-entrant wizard makes a big difference. Google doesn't touch Active Directory or any of the other complex server functions.

I give Office 365 a 7 for its admin tools and Google Apps a 9, but note that Google's job is much, much simpler. There just isn't that much a Google Apps admin has to do -- or can do, depending on how you look at it.

Value: Investment vs. impulse buy
Google Apps runs $5 per user per month, with no contract required. If you want to pay for a year in advance, it's $50 a head. If you have 10 or fewer email addresses to shepherd, you can get the basic Google Apps package free. The other Google products that I mention in the Features section are all free, all the time.

In the Microsoft tradition, Office 365 pricing is complex, even Byzantine. You can see some of the details in Microsoft's Office 365 Fact Sheet (Word file), but to see all of the options, you need to wade through the Subscription Plans site. At the risk of oversimplifying, prices range from $10 per user per month for bare-bones support with no Office license to $27 per user per month for the works.

I give Google a 9 for value. Office 365's value depends in no small part on whether you need or want to include Office Professional Plus 2010 licenses with the bundle. Assuming your company already has seat licenses for Office, I give Microsoft a 7, but if Microsoft offers you a rebate or discount for your current licenses, the equation changes considerably.

Reliability: The uptime factor
One final point didn't make it into the numerical comparison charts: reliability. Whereas Google has been offering Google Apps in various versions since 2006, Microsoft is trying to present Office 365 as a completely new system. Certainly one of the reasons for Microsoft's fresh new face is that 365's predecessor, BPOS, has achieved no small amount of notoriety for its reliability record -- or lack thereof.

Last year, BPOS crashed for protracted periods of time on Aug. 23, Sept. 3, and Sept. 7. In response, Microsoft apologized, starting a new service called the Microsoft Online Service Health Dashboard that's supposed to keep customers advised on outages. Two problems: The Dashboard is visible only to paying BPOS customers, and it doesn't work when you need it the most.

BPOS went down at least three times last month. During those three outages, the Health Dashboard was useless. Worse than useless: It reported no problems, while there clearly were extensive outages. On June 22 -- yes, just last week -- BPOS went down again. At the same time, the Health Dashboard stopped working altogether.

In response to the latest debacle, the MSOnline group tweeted, "O365 should provide a more stable service. It is built from ground up new and reports and expectations are very good." There was no mention of the lapses with the Health Dashboard.

Google Apps outages, by contrast, are generally infrequent and short-lived. Even the tiniest disruption of service reliably appears on the Apps Status Dashboard.

It remains to be seen if Microsoft's reliability will improve with this all-new system.

Conclusion: Get onto my cloud
Right now, if your company is seriously looking at cloud services for your productivity applications, you have at least three general choices.

First, you might consider using one of the many hosted service providers. With Office 365 and Google Apps for Business hogging the spotlight, customers may forget that hosted servers and services are still running strong. Many hosted service providers offer individualized support and products, either in competition with or in support of Office 365 -- and several of them don't hesitate to recommend and help with Google Apps, if the situation's right. Don't overlook the little guys. They work for you, not the giant companies.

Second, you can sign up for Google Apps for Business. It's relatively easy to sign up and test Google Apps, in no small part because there are few admin functions.

Third, you can contact Microsoft and ask how much it will cost to move to Office 365. That isn't a trivial question, particularly if you already have licenses for any of the server products or for Office 2010. Software Assurance furthers complicate matters, and if you're in the Home Use Program, better get your accountant in on the discussion.

When you look at the bucks and the benefits, there's one factor that will hit you right across the pocketbook: Microsoft has priced Office 365 so that if you need Office 2010 licenses it isn't outrageously expensive -- at least, not by Microsoft standards. Microsoft doesn't publish Volume License prices, but the Office 365 "E3" option, which includes a full license for Office 2010 Pro Plus, runs $288 per person per year.

As far as being able to reduce admin headcount, if you move your servers to Microsoft's cloud, that's a very contentious issue. InfoWorld's J. Peter Bruzzese published a detailed look at the question back in March and came to the conclusion that Exchange admins, in particular, need to broaden their skills.

Nonetheless, in comparison with a move to Google Apps, the bottom line is that Microsoft's cloud represents a relatively modest transition from existing technologies. Google's cloud, by contrast, amounts to a complete break from the past. For companies that seek the benefits of the cloud without dramatic change, Office 365 is the obvious choice. For companies willing to abandon familiar features and technologies for much lower cost and administrative overhead, Google has a solution ready and waiting.

It's a whole new ball game. Whether your company decides to go with Office 365, Google Apps, or a hosted service provider -- even if you keep all of your servers locked in-house or decide that you don't need a server at all -- there are many more options today than there were a month ago. The cloud beckons.

This story, "Office 365 vs. Google Apps: The InfoWorld review," was originally published at Follow the latest developments in cloud computing at For the latest developments in business technology news, follow on Twitter.

InfoWorld Scorecard
Ease of use (25.0%)
Setup (10.0%)
Features (40.0%)
Administration (15.0%)
Value (10.0%)
Overall Score (100%)
Office 365 8.0 7.0 9.0 7.0 7.0 8.1
Google Apps for Business 7.0 9.0 7.0 9.0 9.0 7.7
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