Office in the cloud: Google Apps vs. Office 365

Summary:Can you do all of your office productivity, email and collaboration in the cloud? We examined the latest small-business suites from Google and Microsoft to find out.

Office 365 Small Business Premium


Highly integrated and compatible with desktop Office suite
Office 2013 for use on 5 devices
Office on Demand
Familiar look and feel

Complicated licensing
Limited compatibility outside Windows 7/8 devices
Can be significantly more expensive than Google apps for large deployments

Quicker, cleaner and more functional, Office 365 Small Business Premium moves the product up a gear to challenge Google Apps for Business with a tightly integrated suite of cloud and desktop office productivity tools that will appeal to companies of all sizes.


Microsoft is not known for simple product lines and straightforward licensing plans, and has done little to alter that perception in Office 365, which comes in a variety of guises for home, small business and enterprise use. The consumer-focused Home Premium service concentrates on desktop productivity rather than email and collaboration. The Home licence also forbids commercial use, so for our trial we initially signed up for Office 365 Small Business, which can be had for £3.90 (ex. VAT) per user per month — or £39.60/user/year (£3.30/user/month) on an annual contract — with a limit of 25 users. Beyond that, you'll need to consider the Midsize Business (up to 300 users) or Enterprise (unlimited users) plans. In US money, the Small Business prices are $6/user/month, or $60/user/year ($5/user/month) on an annual contract.

As well as all the Microsoft Web Apps (Word, Excel, PowerPoint, Publisher, InfoPath and Access), business users get Exchange Online for email complete with shared calendars and a 25GB inbox per licence plus antivirus and spam protection. Business users also get Lync Online for communications and SharePoint Online for collaboration and storage. Note that, instead of the consumer-focused SkyDrive service, business users get SkyDrive Pro: together with customisable Team Sites, this is hosted by SharePoint with a total of 10GB of storage provided, plus 7GB of SkyDrive Pro per user.

SkyDrive Pro: each user gets 7GB of cloud storage. Image: Alan Stevens/ZDNet

Desktop apps aren't included in the basic small business services, so we also looked at the recently released Small Business Premium offering, which at £10.10 (ex. VAT) per user per month — £100.80/user/year (£8.40/user/month) on an annual contract — is likely to be a popular choice. That's because it allows users to download the full desktop Office 2013 suite — just as in Office 365 Home Premium — on up to five devices. It also adds Office on Demand streaming for desktop use without 'installing' in the conventional sense and without affecting the five-device allocation. In US money, the Small Business Premium costs $15/user/month, or $150/user/year ($12.50/user/month) on an annual contract.

The Office 365 dashboard. Image: Alan Stevens/ZDNet

By default business customers get a sub-domain hosted by Microsoft, but you can use you own with flexible options when it comes to DNS and email hosting. Either way, management is done using a web interface featuring the minimalistic Windows 8 look and feel. I found this a huge improvement over the previous implementation, with lots of help, guidance and navigational aids making it easy to add and delete user accounts, control access, customise team sites and perform other day-to-day tasks.

For my evaluation I used a mix of Internet Explorer, Firefox and Chrome, all of which worked as expected and, overall, I was very impressed by just how responsive the latest implementation of Office 365 appeared to be. Some setup work was required to integrate desktop implementations of Office on existing computers, but this can be initiated by users and is quick and painless. Likewise I had no problems at all downloading and installing the latest desktop Office apps or using Office on Demand.

When it comes to mobile integration, however, the picture is a little less rosy. On Windows platforms, such as Windows 8 Pro, RT and Windows Phone, all is well and Exchange/mobile integration is good. However, on some of the Android devices I tried I could only view rather than edit documents, and the consumer SkyDrive app wouldn't log into the business SkyDrive Pro service.

Living with Office 365
Because it's from Microsoft, my expectations for the latest Office 365 were high — especially in terms of compatibility and familiarity. The previous version fell short in both respects, but with this update Microsoft has come up with a business productivity platform that's ready to rival Google Apps.

Office 365's Word web app. Image: Alan Stevens/ZDNet

As in the Google Apps test, I spent a lot of time using email or editing documents and for email. I mostly used the Outlook web app which, if you can live with the stark whiteness of the latest implementation, does just about everything you want it to. If you can't, then a desktop Outlook client is easy to configure and is included in the desktop download.

Office 365's Excel web app. Image: Alan Stevens/ZDNet

Similarly, I found the web app for Word very familiar and easy to use. Compatibility goes without saying and the functionality provided, although a subset of the desktop version, is more than good enough for most users. Much the same applies to the other components of the suite, although there were a few inconsistencies with the web apps around integration with documents created with older releases. Word worked fine with all of my documents, but I found I had to convert spreadsheets to the latest format to get the Excel app to work. The PowerPoint app, on the other hand, told me when conversion was necessary and then did it for me.

Office 365's PowerPoint web app. Image: Alan Stevens/ZDNet

Sharing documents with colleagues is now straightforward, and I loved the ability to drag and drop documents onto the browser to upload them to the cloud. I also had a stab at customising and using a team site, a process that was a lot less challenging than I had expected. Likewise, creating a website using the templates and tools provided was a straightforward affair that delivered professional-looking results.

Document sharing options in Office 365. Image: Alan Stevens/ZDNet

On beginning this evaluation I tried to work entirely within a browser with no desktop Office apps at all. However I did end up downloading and using the desktop programs as well — not because I absolutely had to, but because it simply made life a lot easier in the long run. And that's one of the major differences compared to Google Apps, which is architected to do everything in the cloud: Office 365 doesn't seem to want to let go altogether — at least not yet.


Small businesses will find it difficult to choose between Google's and Microsoft's online productivity/collaboration services — especially following the recent Office 365 revamp. Google Apps for Business still leads the way and seems better value, but things look different when you consider the cost of Microsoft's desktop Office apps — which many users still need. For businesses with little investment or interest in non-Windows devices, Office 365 now looks the better option.

Topics: Cloud, Collaboration, Reviews

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