Office 365: Not for Smaller Businesses

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Now that the public beta has begun, I've had a little time to evaluate Office 365, and it's been an interesting experience. I run a small business and am already a Google Apps for Business user, so am I tempted to make the switch?

The price argument is a no-brainer, landing squarely in Google's favor. Because my organization has under 50 employees I pay nothing at all for Google Apps. Should my organization grow I'll be faced with a $50 per year charge for each user. That's around $4.17 per month, per user. For the same kind of Office 365 service once it's out of beta I'll have to pay $6 per month, per user. That's around a third more.

Office 365 offers a complete package that's superior in some ways to Google Docs. It includes Exchange e-mail, online versions of the Office apps, and the Lync chat/video conferencing software, as examples. But few of these services are difficult to find elsewhere for zero cost: Skype's pretty good at chat and video conferencing, for example, and I've seen even large businesses make good use of it.

Above all, Office 365 is a terrific product but I'm left feeling it's over-engineered. As the admin for a small business, Google Apps feels significantly more nimble and fuss-free.

Take adding a new user, for example: With Google Apps, this is a matter of filling-in a small dialog box with the new user's name. With Office 365, it's a matter of stepping through a wizard interface and assigning licenses. (Remember: This is Microsoft, king of the software license.)

When the new user logs in for the first time, things are again different. After agreeing to the license agreement, new Google Apps users will be presented with something virtually identical to what they see when they access their personal Gmail account. Their Inbox is visible immediately and they can click the Docs link to start creating files. It's clear how to start working from the get-go.

New Office 365 users will have to click an Outlook link to see their e-mail, and learn a new Web-based interface (assuming they have no prior experience of Outlook Web Access), and then navigate through a Team Site home page to start creating documents. Ideally, they should also configure their system to work with Office 365 by downloading a small app that will automatically configure existing installs of Office to sync-up with the cloud.

The difference between Google Apps and Office 365 is a philosophical one. The intention of Google Apps for Business is to provide an online working platform for businesses. The intention of Office 365 is to extend the Office desktop experience into the online world, and take with it the power of Exchange e-mail and SharePoint document collaboration.

This means that, in my opinion at least, Google Apps for Business is far better for new businesses that simply want to get started ASAP without having to worry about IT.

But it's also pretty clear that Office 365 will scale far better once my business starts growing. For example, should we have demands that outstrip the limited feature set of online office suites, I can upgrade my Office 365 subscription so that my users get the full Office 2010 Professional software. There's no upfront charge for the software, so no hit on my finances.

Pricing: Office 365 vs. Google apps (Click for full view.)
Yet even in this situation I'd be reluctant to give up Google Apps. For the users who demand more sophisticated functionality I could simply buy individual Office 2010 licenses and use Google's Cloud Connect for Microsoft Office plug-in, which brings the collaborative editing power of Google Docs and cloud storage to any recent Windows version of Office.

Additionally, as I've pointed out before, Google's doggedly improving Google Docs as time goes on, and responding to feature requests from users. I'm sure that within a year or two it'll have the mission-critical features that it lacks right now (such as document mail merge, for example).

Another significant issue with Office 365 is that it's geared towards Windows. This isn't surprising considering Microsoft is at the helm, but Redmond has to accept that this kind of approach is increasingly anachronistic in our modern day and age.

As a small business I have to cater for employees who decide to use their own IT, which makes sense for my IT costs, too. Some of them use Apple Macs and iPhones. If I upgrade to the Enterprise subscription of Office 365 to get a desktop installation of Office 2010, my Mac users will be left in the cold. Office for Mac isn't offered as part of the deal, and isn't supported even if the user already has it installed.

And as my colleague Tony Bradley pointed out yesterday, iPhone support for Office 365 is very limited indeed (although Windows 7 Phone is fully supported, as you might imagine).

Video: Ballmer Launches Microsoft Office 365

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