A lot of the benefits of moving to the cloud are on the back end—such as reduced support costs, simplified storage architecture, and trading up-front costs for long-term expenditures. However, there are numerous benefits to end users, and there’s less of a tradeoff in features than I’d thought. For starters, files are stored in simple web interfaces instead of in obscure shared network drives, and collaboration is easier. Working from multiple machines no longer involves emailing files to yourself. Microsoft and Google are both giving their online office suites a lot of effort—and because these services are in the cloud, there’s no reason the companies can’t update their offerings constantly.

Still, your users will have to make certain sacrifices if you decide to go with a cloud office suite. The fact is that traditional on-premises office suites (mainly Microsoft Office, but also its open-source competitors) are remarkably advanced and have tons of features. Even though the average user probably won’t use most of these advanced features, you’re likely to have users who will miss certain features if you move to web apps. And no matter how good your online office suite tools are, Internet access goes down unexpectedly sometimes. Consider these pros and cons carefully before deciding to move ahead.

Microsoft Office 365 and Google Docs are the two main players in online office suites right now. These two suites provide fundamentally different experiences for end users. Office 365 is primarily meant to tie into traditional, locally installed copies of Microsoft Office—and that’s where your users are likely to do most of their work. Google Docs is all about working in browsers—you can import and export Office files, but web apps are Google’s focus. In this comparison, I look at both suites from a user’s perspective.

Price and Licensing

Microsoft and Google have very different philosophies in their licensing practices. Google is simple: Google Docs is targeted at individuals, and it’s free. You get access to all the web apps, and you can use all the Google products—Gmail for email, Google Talk for communication, and so on. For $5 per user per month or $50 per user per year, you can use Google Apps, which includes Google Docs and gives you extra storage, support, and a service level agreement (SLA).

Microsoft’s plan structure is much more complicated. At the low end, Microsoft’s kiosk worker plan (Plan K1) is $4 per month. This plan is mostly email and a place to store files for collaboration; it’s aimed at employees in an enterprise who won’t be working on machines of their own. At $16 a month, Microsoft’s enterprise plan (Plan E2) gives access to Microsoft’s web apps. The company’s $27 a month plan (Plan E4) includes licenses for Microsoft Office and enterprise voice capability. Microsoft’s structure includes numerous options, including plans aimed at small businesses.

Microsoft loses on price here—the company’s least expensive plans will work for you only if your employees have simple, specific needs. In contrast, Google’s inexpensive offering gives your users a functional cloud office suite. But you can get a lot more from Office 365 if you pay for it, and at the high end it can act as a good chunk of an enterprise-class infrastructure. These IT-level options are outside the scope of this review, but know that they’re available.

Overall Experience and File Management

Getting started with Google Apps is simple—just go to Google’s website. Using Office 365 requires you to install some software. You need a browser plug-in, and you have to install Microsoft Lync for communication. You can use Microsoft Outlook or Outlook Web Access (OWA) to connect to Office 365. Be careful if you’re using an existing Microsoft Exchange Server infrastructure, though—Lync replaced Microsoft Office Communicator on my machine, and it wouldn’t connect to my organization’s Communicator infrastructure without a registry hack. Outlook 2007 also refused to connect to both Office 365 and the company’s Exchange server at the same time.

Figure 1: Google Docs home page

When you sign up for Office 365, you get a subdomain of SharePoint.com (I got zac.wiggy.sharepoint.com). Go to your site and click Member Login to obtain access. After you log in, you’re presented with your recently used documents as part of your SharePoint Team Site. Getting to your documents is easy, but doing anything else to your site will probably require administrator intervention—as someone without Microsoft Office SharePoint Server experience, I found trying to change site settings difficult.

Figure 2: Office 365 team site

Office 365’s extra SharePoint features don’t hinder users, but Google provides a simpler interface. With Google Docs, you pretty much just have the documents. Both suites make it easy to decide who has access to your documents and let you share them with outside users.

Google supports most major browsers for Docs. Office 365, however, doesn’t support Google Chrome—you can view documents, but can’t you can’t use the web apps, nor can you send a document to your local copy of Office from Chrome.

Web Apps

With Office 365, you can use a locally installed copy of Office instead of the web apps—in fact, many of Office 365’s subscription plans require you to do so. I tested Office 365 with Office 2007, and it worked fine. You’re basically working with documents as usual, but they’re saved to Office 365 instead of your local machine. (For a complete list of the available plans and details about which plans include access to web apps and which require locally installed copies of Office, see Microsoft's Office 365 web page for small businesses, midsize and enterprise businesses, and educational institutions.)

Both Google Apps and Office 365 provide functional word processors as web apps, and it’s difficult to pick a winner between them. I prefer Google’s interface, but it’s mostly just a matter of taste. The Word web app’s interface seems sparse because the ribbon interface looks odd with only three tabs. The only feature I regularly use in a word processor that isn’t available in the web apps is change tracking, and the collaboration features in both suites can probably substitute for most applications.

As far as spreadsheets go, Google has an edge over Microsoft. You can’t right-click in the Microsoft Excel web app, which I do frequently, for tasks such as resizing rows and hiding and unhiding them. This last function is especially important—I know plenty of people who use Excel’s hide function to make it easier to look at parts of a spreadsheet, and as far as I can tell, there’s no way to use hide in the Office 365 web apps. If you import a document with hidden rows or columns created in the offline version of Excel, you can’t change or view the hidden parts without going back to offline Excel. Google’s spreadsheet app doesn’t work exactly the same as in Excel, but I found it easy to transition to using it. Support for Excel formulas in Google spreadsheets has improved dramatically in the past few years, with most basic Excel formulas easily replicated. Google spreadsheets also supports more advanced spreadsheet features, such as pivot tables, charting, and image embedding. I would miss some of Word’s features if I switched completely to Google Docs, but I don’t think I’d miss Excel.

Office 365 beats Google Docs hands down for presentations—or at least for viewing previously created Microsoft PowerPoint presentations. I tried two different PowerPoint presentations in both apps: a Microsoft deck from a trade show and a relatively simple single slide with text labels. Office 365’s slides looked the same as in the desktop version of PowerPoint and would’ve been usable for a presentation. In Google’s tool, however, they were a mess—some images were missing, in some places the text was completely unreadable, and even the simple slide had the labels formatted incorrectly and moved around. In Docs’ favor, the Google web app could actually edit the text on all the slides, whereas in Microsoft’s case, text sometimes seemed to be stuck behind images and I couldn’t figure out a way to change it—as far as I could tell, there’s no way to move things forward or backward.

I won’t go into the email or calendar features of the two services—you probably have some experience with both Outlook and Gmail, so you know what to expect. For mobile support, Google definitely leads in my book. Google’s web apps work very well on my Android phone, with mobile-specific features to make viewing and working with documents easier. Office 365 wouldn’t work at all on my phone, however—for now, Office 365 plays nice only with Windows Phone 7.

Use Cases

With Office 365, Microsoft basically offers its server room infrastructure—Exchange and SharePoint—moved into the cloud. Users get pretty much the same experience they’d get with a simple, local installation of Office, but with some perks—collaboration and version tracking are easier, for example. Users can view files from a browser, but light editing, such as fixing a typo, or working with text documents is about all you should really plan on your users doing from anything other than their work PCs.

With Google, you get a lot closer to what I think of as “working in the cloud.” There’s no local application to install, and you can work from pretty much any device with a browser. Your users can sign in with a Google account and work from their work PCs, friends’ computers, Linux machines, phones, or tablets. Google’s web applications beat Microsoft’s, but you don’t have tight integration with local applications.

Both companies’ products seem, at this point, like early versions, with a few kinks to work out. However, both are functional and user friendly. Neither product is bad in any way, and both deliver on what they promise, as long as you’re willing to live with their respective limitations. My recommendation depends entirely on what your company needs. If your company is, say, a computer magazine, where well-educated, well-trained editors use all the advanced features of Word, Office 365 is really your only choice. Or if you want all the advanced meeting and calendar features you get with Exchange and Lync, again, you’d have to go with Office 365. But if you don’t need every feature in Office (and you might be surprised how little you’d have to give up), you’d save big money by going with Google Apps and Docs—and you wouldn’t have to worry about licenses for Office. Plus, you’d give your employees the option of working from pretty much anywhere.

Google Apps/Google Docs
PROS: Inexpensive; accessible from almost any device with a browser; advanced web applications
CONS: Missing some advanced features from locally installed applications; flawed PowerPoint file support
RATING: 4 out of 5
PRICE: $5 per user per month or $50 per user per year
RECOMMENDATION: If your users don’t need advanced office suite features, Google Apps can provide what you need at a low price. You might need things Google doesn’t provide, though, so be aware of its limitations.
CONTACT: Google Apps

Microsoft Office 365
PROS: Tightly integrated with offline Office applications; advanced meeting features; big-business infrastructure for smaller businesses
CONS: Relatively expensive and complex licensing; limited device and browser support; limited web apps
RATING: 4 out of 5
PRICE: From $4 per user per month to $27 per user per month
RECOMMENDATION: If your users need all the features you get from using full Office applications, and if multiple device support isn’t too important, Office 365 is a good choice.
CONTACT: Microsoft Office 365