Office in the cloud: Google Apps vs. Office 365

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: How to Do SaaS Right, Cloud, Collaboration, Reviews

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  • Easy ... go with the one that won't mine your PI

    If you value your personal information go with Office. No brainer really when you decide Ron that simple pre-requisite.
    • hubivedder the really obvious answer is to go with Google Apps

      and get of the Microsoft tax program for ever.....that's the real choice...........
      Over and Out
      • Give up the MS Tax

        in exchange for your privacy...sounds like a TERRIBLE IDEA!
        • Privacy

          I agree. The privacy policies of Microsoft is a lot stricter than Google services. However, both services are HIPAA compliant and more.

          Both services uses strong encryption to help secure the data over the Internet and maintains the data within the data center securely, so leaks are not a problem. Toyota and Honda can be hosted on Office 365 without leaks or security breeches. Though, nothing is 100% safe, both services are secure.

          My preference is Office 365 for two reasons:
          1. Most people know Microsoft Office 2003/2007/2010/2013.
          2. SharePoint and Exchange is more robust than Google Sites and Google Mail.

          Google Apps is easier though over Office 365, just plug and play. Since I am a tech guy, Office 365 has a lot more to offer. Office 365 is also plug and play, but can be a little confusing for non-tech people who do not understand PowerShell and other custom features of SharePoint and Exchange. Lync, well, it is simply awesome!
    • HyperOffice is a mature alternative

      I thought it was fair to put HyperOffice out for people considering alternatives to Google and Microsoft. While the collaboration space is very crowded, there are very few solutions which offer comprehensive and integrated collaboration environments like Google and Microsoft. HyperOffice is one of the oldest (since 2003) and most mature companies in this space. We've been covered by ZDNet before.

  • Not an objective analysis

    "Google Apps for Business still leads the way"

    This is untrue. Please cite the data which led you to this conclusion.

    "and seems better value"

    This is untrue. Please cite the data which led you to this conclusion.

    "For businesses with little investment or interest in non-Windows devices, Office 365 now looks the better option."

    What does Windows have to do with it, apart from having close to 100% of market share in the desktop/laptop PC segment? Office 365 is also available on Mac, and MS Office Web Apps work in most web browsers -- on any platform including mobile.
    Tim Acheson
    • Reding comprehension...

      Reading comprehension isn't your forte is it? The data is in the article, specifically, he lists pricing differences between the services. You may disagree with his metrics. You may not like his methodology, but it's just obnoxious to pretend that he doesn't include data to back up his argument.
      • So price should be the determining factor?

        Regardless of anything else?

        Just remember most of the time you get what you pay for...
        • I repeat myself..

          Allow me to repeat myself:

          "You may disagree with his metrics. You may not like his methodology, but it's just obnoxious to pretend that he doesn't include data to back up his argument."
      • BS! Do you know any google apps users who only pay that price?

        No there are none. After you add in the handful of other for pay services you have to add to make it useable that come with the offices products the per user price for office is actually cheaper
        Johnny Vegas
        • BS yourself Johnny

          ALL of my customers who use Google Apps end up paying less than $5 per year per month (It actually works out to less than $4.50 Australian per month).

          Please stop the FUD unless you have examples of the services you "have to add" to make it usable?

          I love good comments but yours seems like you're simply hating.
    • The Sleeper?

      Windows is not the prevalent OS. There are more installed Linux OSes than Windows. That is because apart from Apple and RIM just about every mobile OS on the planet is Linux based. MS does not control the ecosystem any more, and Google is shooting for apps that are system agnostic.

      In the long run this will be better for everyone, with open File Systems, easily port-able apps etc. Not the closed ecosystem that MS and Apple are shooting for.
      • Wikipedia sees to say Max OS is more Unix than Linux.

        Not to mention it is now has a full Proprietary EULA.
  • Google Apps are a joke.

    First of all Google apps are not suited for Business. Businesses don't live in a browser. Google apps may work for a one man business.

    Why go for a half-ass solution when the mighty Office365 is available at a very affordable rate and with excellent customer support.?
    • We use google apps in many cases

      In our business.
      The subset of features is good enough in many cases and the way they allow simultaneous editing is absolutely great.
      We use Google basically because they were the first ones having it. I've tried office 365 and as I said before it doesn't feel as good as google apps. Albeit feature wise the only thing I noticed was the lack of a math editor on MS apps - that is only important for a few.

      People still too dependent from the normal office, it's an amazing set of tools, but is also very expensive and i believe 80% of people are using just 20% of the features, but people are just used to use it, it just seems right as using google to make a web search.

      The effort made by MS was a great one, they went from zero to a good set of web tools, but I wonder if they really want people to use them, that could disrupt their current business in a severe way.
      • "Good enough" is a scary standard to set

        especially for business purposes.

        As to 80% of users only using 20% of the features I think you are right, but at the same time those 20% of features are what users expect in any office suite they use.

        I've tried twice to move my workplace from MS-Office to OpenOffice and each time every single user other than myself has moved back. Not because it is familiar or they don't want to change. It was always due to some missing feature or compatability issue. It really doesn't take much to push a user away, unless they are willing to live with "good enough".
        • We have the same issue here...

          GoogleDocs, but people move back to Office because they are lacking some basic features in that mythical 20%. What they do use it for is collaboration, as long as it's simple. They are about to move to GMail - it will be interesting to see how the higher up deal with the lack of features and integration, but move to the cloud you give IMO a lot of convenience items and good UI features. Can you live w/o them time will tell.
        • 20% vs 80%

          You are correct that 80% of users use 20% of the Office features. But that means that 80% of users could use Google Apps and the remaining 20% would use MS Office.

          That is a huge revenue loss for Microsoft. This is the same as PC vs Tablets. Before the tablets, everyone was forced to use a PC. now, most people don't need a PC...
    • YOU are the joke

      And a pathetic one at that.
    • Owlll1net So where are your buddies Loverock Davidson & Todbottom3

      So we can see the complete line of Microsoft shillers fud all in a three serving pread along with the usual toppings?
      Over and Out