Microsoft Office 365 Presents Strong Challenge to Google Apps for Business

News Analysis: A quick comparison of the two major cloud-based office suites shows both products will work effectively. But Microsoft Office 365 requires less effort and commitment to set up as a cloud office-productivity suite.

By the time you read this, Microsoft will have released its long-awaited Office 365  cloud-based office-productivity suite to general availability. The product is intended to compete directly with Google Apps for Business, which has been out for a while.

As the product was being readied for market, Microsoft asked the analysis arm of my company, Wayne Rash & Associates, to examine both products and give an independent, unbiased view of how they compared.

While both products have been changed to some extent since the comparison, the study is still valid because the overall approach has remained the same for both companies. In addition, Google has certainly been aware of the approach of Office 365 and has added or upgraded features accordingly. As a result, it's clear that if you want to take cloud-computing approach for your office-productivity applications, you can reliably use either one of the products.

But there are significant differences. The most basic, and perhaps the most important to most companies, is that Google Apps provides an alternative to Microsoft Office that allows you to continue using Microsoft Office for some functions. Microsoft Office 365 provides a cloud-based version of Microsoft Office. This is not a small matter. Where Microsoft provides Exchange as part of its cloud offering, Google provides Gmail, and the way the Google Apps are integrated, you cannot have a fully functional version of Google Apps for Business without Gmail.

In fact, Google Apps for Business is so tightly integrated with Gmail that before you can do more than a test implementation, you must convert at least part of your mail system to Gmail, and you must place a Google-specified entry into your Website's metadata or into its DNS (Domain Name System) record. Failure to do this will prevent Google Apps for Business from working for you. For many businesses, entering the metadata or DNS records isn't a problem. But for other businesses, it may take days or longer to arrange this. Or it may not be possible-depending on who is responsible for your Website. You're also required to put a mail redirection entry into your DNS record.

Microsoft Office 365 requires none of these steps. You can keep your existing email application as long as you want and use the cloud-based version of Exchange in parallel, or not use it at all. Companies already using a hosted Exchange provider will not need to change.