Google's spreadsheet app supports basic Excel functionality—multiple sheets in a workspace, cross-sheet references, and standard formulas. It also has formatting options, charts, drawings, images, gadgets and scripts. Yet, when saving a Google spreadsheet in Excel format, the charts may look a little different, and some functionality might be lost. The same is true when converting an Excel document to edit in Google Apps.
The Excel Web App does have autosave, background colors on cells work fine, and multiple people can edit online at once. It supports many more features than Google's spreadsheets do. Cell formats, charts, formulas, and many other advanced functions work perfectly. Not everything is supported, such as objects or tables that pull in data from outside sources. If you upload files saved in older Excel formats, such as .xls, you will need to re-save them first in the latest .xlsx format to edit them.
Winner: Microsoft's Excel Web App is superior to Google Spreadsheets.
Email and calendars
Microsoft's and Google's Outlook, Calendar, Contacts, and Tasks are similar to Google's counterparts. Outlook allows emails to be grouped into folders and subfolders, while Google has labels and sublabels. A Google email can have multiple labels, but an Outlook email can be copied to multiple folders, and a “Category” option is similar to Gmail's labels. So it's pretty much a wash.
Gmail integrates well with many of Google's other tools. Get a foreign-language email? Gmail offers to translate it. Text chat with your contacts without leaving Gmail, add them to your Google+ circles, start a voice or video call, or set up a hangout video conference with several people.
Both Outlook and Gmail have nice text editors. The Outlook Web App opens a new pop-up window when a user is reading or creating email—an annoying habit since I have pop-ups blocked.
If you've used the free, personal Outlook at Outlook.com, you'll find quite a few differences. The personal version has some nice tools not in the Office 365 version of Outlook, such as "Quick Views" of frequently-used categories. Microsoft's online Outlook and Calendar can be used as is, without needing a local copy of Outlook for functionality. The one significant exception for businesses is the lack of an online mail merge function—you'll have to switch back to the desktop Office suite for that. (Google Apps supports mail merge through either built-in scripting or with third-party apps.)
Both Gmail and Outlook allow you to manage multiple email addresses from the same account, but Gmail lets you set up different signatures for each address. Both platforms let you view appointments from multiple calendars. For example, you might have a personal calendar for your own appointments, a group one that everyone on your team has access to, and a home calendar associated with your personal email account. Events from all three calendars will show up on the same screen, color-coded so you can tell them apart. In addition, both calendars can send you reminders by email, pop-up alerts, or via text message to your cell phone.
I've used Outlook both on the desktop and on the Web, and I find Microsoft's online interface to be simpler and clearer than the desktop version. But I prefer Gmail to both, not because of any particular features, but simply because I'm more used to the interface after all these years. If your employees have been using Outlook all along, they would probably be happier with the Microsoft's online email client.
What they cost
Google Apps for Business starts at $5 per user per month, or $50 per user per year. Each user gets 25GB of storage for email, plus 5 GB of storage on Google Drive. Upgrading to Google Apps for Business with Vault costs $10 per user per month, adding more security and e-discovery features. There are no limits on how many users each company can have on the platform, and additional storage space is available at $4 per month for 20 GB. Google Apps can export documents in Word and Excel formats, but if you're dealing with more advanced features you'll also need to have local copies of Office.
Pricing for Office 365 is far more complex (chart above). Office 365 for Small Business, which only includes online tools, costs $6 per user per month, or $72 per year. Office 365 for Small Business Premium costs $150 per user per year. It adds the desktop Word, Excel, PowerPoint, OneNote, Outlook, Access, and Publisher, as well as Lync and InfoPath, for up to five devices per user. It also includes a 25GB mailbox and 10GB plus 100MB of SkyDrive cloud storage.
Both platforms offer free trial periods.
Winner: Google Apps for Business costs less. If you want to get new Office desktop software, then Office 365 Small Business Premium is a better bet despite the additional cost.
Add-ons and apps
Google Apps has its own apps store (not to be confused with the Android Apps Store) in the Google Apps Marketplace. These applications, many also available for mobile devices, integrate with the Google platform. For example, they might allow single sign-on, or add functionality to your calendars, emails, contacts, or documents. . There are many free or low-cost business productivity applications such as CRM and project management, that are easy to install.
By contrast, Microsoft has been slow to the Web, although it still dominates the offline world. Microsoft's Office Store sells apps that integrate with its desktop Office software, not the Web Apps. The Office 365 Marketplace also offers an array of serious tools for specific business needs, such as financial management, as well for IT admins. Most of these products don't apply to the majority of end users of the Office 365 online tools.
However, the Office file formats are the default standards for business documents shared with other businesses. An entire industry of developers and service providers helps companies expand on their Microsoft applications, and a great deal of legacy code is designed to work on the Microsoft platform. Microsoft's offline ecosystem isn't likely to disappear any time soon. If your company has time and money invested in this ecosystem, it makes sense to consider Office 365 for online collaboration, and to be patient while Microsoft improves the feature set.
Winner: Google is ahead with its Web ecosystem.
Which suite should you choose?
For startups and small companies without a great a deal of existing investment in Microsoft Office documents and applications, Google offers a robust and quickly evolving online ecosystem, with broad mobile support.
Google Apps is part of a wide Google ecosystem and was born on the Web. Every document—text, spreadsheet, graphic, or presentation—can be instantly published to the Web for public access, or access by a limited group of users. Data can be pulled in from Google's various other applications, including Google Finance, or from easy-to-create online forms.
If you're on the fence, ask yourself how important it is for you to access rich Office desktop applications, and in particular, to edit complex Excel spreadsheets. If you need online access to Excel charts, complicated formulas, and fancy graphics, go with Office 365 for Small Business. If you must have the latest desktop applications, however, the step-up Office 365 Small Business Premium is a far more appealing package.
Microsoft also offers more tools we have not discussed here, such as PowerPoint, and Lync for IM and conferencing, which is set for Skype integration. Otherwise, if your company operates primarily online and on the go, Google Apps for Business offers the more compelling option for those who work mostly in the cloud.