Google Dares Businesses To Switch To Microsoft's Office 365

Google has pared the free version of Google Apps from its business suite, narrowing the gap between itself and Microsoft’s suite of hosted office productivity software services. But the costs and feature set offered by Google still, on paper, give Google the advantage.

In a bid to make things “very straightforward,” Google axed the basic Apps plan, which offered free email, calendaring and documents, plus 5GB  of generic Google Drive storage, to up to 10 users per month. All companies will now have to pay the $50 per year cost of Google Apps for Business.

“When we launched the premium business version we kept our free, basic version as well,” wrote Clay Bavor, director of product management for Google Apps, in a blog post. “Both businesses and individuals signed up for this version, but time has shown that in practice, the experience isn't quite right for either group. Businesses quickly outgrow the basic version and want things like 24/7 customer support and larger inboxes. Similarly, consumers often have to wait to get new features while we make them business-ready.

Google’s move can’t help but be seen as a bit of a dare to businesses. But Google isn't operating without a net. Those customers who have already adopted the free plans are grandfathered in, and Google is still the cheaper option. Microsoft’s most comparable Office 365 plan (the P1 option for small business) costs $6/user/month, or $72 per year. That plan offers cloud-based email using the company’s domain name; Web-based viewing and editing of Word, Excel, PowerPoint and OneNote files; file sharing, and instant messaging and video calling. While the services are comparable, some limitations still hold Microsoft back: for one thing, the P1 plan limits companies to just 50 users, as well as being more costly. It’s not surprising that Bavor claimed that “millions of businesses,” plus government and schools, have turned to Google Apps.

Familiarity: Microsoft's Selling Point?

So why use Microsoft? “Office 365 delivers enterprise class capabilities, the familiarity of Office, and a cloud service backed by Microsoft,” a Microsoft spokeswoman said in a statement. “For a cost difference that amounts to the price of a cup of coffee, small businesses that are considering a move to the cloud have more reasons than ever before to choose Microsoft.”

In many ways, she’s right - and annoyingly so.

As I wrote in July, I love the write-once, access-anywhere of cloud-based Office suites, and Google was first to the scene with Google Apps. This summer, Microsoft added its new Office Web Apps, which add cloud-based Word, Excel and PowerPoint functionality that’s so painfully close to the full-blown version of Word, it hurts. A typical Web user - me - can do almost everything he needs to with Office Web Apps. Almost.

Google just doesn’t offer the perfect compatibility that I need. It comes close, but if you try to send an .gdoc file to just about anyone you'll quickly learn that most poeople still have no idea how to open it. Sharing a file works somewhat better, although it’s still a new paradigm for many people. Most people prefer a Word file, with changes tracked. And the most recent version of Office includes automatic cloud backup, perhaps its strongest feature. 

In August, Microsoft announced its Office apps, essentially Office plug-ins that combine the power of the Web, plus a lightweight XML description of how the app interacts with Office. Google offers its own Office Apps Marketplace, with its own robust set of apps offerings.

Moot Points?

For many companies, of course, the decision has already been made. Businesses that have turned to Google Apps and chosen the free option are either locked in, or must choose a substantially more expensive option to buy into that Office familiarity. Businesses with existing Office 365 subscriptions still have a (somewhat less) cheaper Google Apps option available, but if money was their priority chances are they'd already have made the move. Google Apps for Education will still be available as a free service for schools and universities, and Google Apps for Government - whose $50/user/year price includes such necessities as Federal Information Security Management Act (FISMA) compliance - hasn’t changed its pricing structure.

Personally, if I were a business seeking a cloud-based office productivity suite, I might be somewhat more inclined to choose Microsoft. But how many businesses are in this position? And how much are they incented to choose familiarity over cost? This is clearly an acceptable risk for Google. So yes, Google is daring businesses to switch to Office 365. But most won't.

This isn’t quite brinksmanship. Businesses can still choose to ditch one hosted solution for the other. But Google’s decision just made it a bit more difficult for companies to change horses midstream.

Image courtesy of Shutterstock.