Google (NASDAQ: GOOG) is in the unlikely position of being on the defensive as Microsoft (NASDAQ: MSFT) moves to launch Office 365 today. Google Apps is undeniably the driving force behind Microsoft's move into the cloud with Office 365, which includes cloud-based Exchange, SharePoint, Lync and Office in a new online-only productivity suite.

Shan Sinha, a Google Apps product manager, summed up the differences in a new blog entry, saying that Office 365 is for individuals while Google Apps is for teams. Sinha wrote: "With Apps you can work with multiple people in the same document...You can see people type in real time, and share a file in just two clicks. Discussions bring people into your documents for rich conversations." He argued that Google Apps eliminates the need for additional licenses or having to upgrade to the same software version: "If you have a Google account, you can collaborate."

The price plans for Microsoft's offering are as high as $27 per user per month, substantially higher than Google's $5 per user per month or $50 per year. However, Office 365 does threaten to poach consumers enticed by the portability and convenience of cloud-based services. In addition, Microsoft's $27 plan includes advanced features such as Internet conferencing and digital whiteboards for team projects, as well as a license to the desktop version of Office--features that Google does not offer.

There is a lot at stake for Microsoft too, given that its Office franchise is a $20 billion-per-year business larger even than the Windows operating system. For its part, Google claims 30 million active Google Apps users, though at least 12 million of these are from academia--typically not paying customers. As noted by Melissa Webster, an analyst at IDC, Office 365 could bring in new business and a stable recurring revenue for Microsoft.

For more:
- check out this article at Network World
- check out this article at The New York Times

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