Microsoft doesn't believe Google Apps numbers

Google Apps has been picking up some steam recently -- announcing a huge deal with the city of Los Angeles, and revealing numbers that suggest over 20 million users and over 2 million companies using the service.

Microsoft, on the other hand, doesn't believe the numbers Google is touting -- saying that millions of those users are students through schools using a free version of Google Apps.

It's unclear exactly why Microsoft is reducing their per-user licenses, but could it be due to the numbers Google is reporting? Perhaps it's to combat the offline advertising campaign Google has launched: "Gone Google".

Google's licensing structure is extremely simple -- $50 per user per year. Microsoft lowered their prices, but while looking for the exact numbers, I found an amusing paragraph on Computer World that, ironically, made everything clear -- Microsoft's licensing structure sucks:

Besides cutting the price of the BPOS suite, Microsoft is cutting the price for most individual components. Exchange Online was reduced from $10 to $5 per user per month; SharePoint Online from $7.25 to $5.25 per user per month; Office Communications Online from $2.50 to $2 per user per month; Deskless Worker Suite from $3 to $2 per user per month; and Office Live Meeting will cost the same, $4.50 per user per month.

Do you believe Google's numbers? I'm thinking they may be a bit inflated -- mainly due to the large number of "businesses" that signed up originally for free. I don't know if these numbers include the "Standard Edition", but I'd suspect that would be the case.