We've come a long way from the days of visiting user workstations to install software using a pile of floppy disks. As a system administrator, I'd say we can effectively work with both local and browser-based cloud applications. Some programs with high CPU/memory/video RAM requirements are always going to run better from your hard drive, but a whole slew of applications run perfectly fine online-- much better than local versions, in fact, since the user isn't dependent on the system or the software installation involved.

One example of an ideal online program is the productivity suite, which Wikipedia defines as "a collection of productivity programs intended to be used by knowledge workers. The components are generally distributed together, have a consistent user interface and usually can interact with each other." These tools involve word processing, spreadsheets, presentations, email capability, collaborative tools, and conferencing functions, and they often serve as the lifeblood for an organization. Productivity suites provide a standard interface for users and are managed by the hosting providers, meaning you don't need a local IT department to handle support or updates and you don't have to worry about different versions of software on different company computers.

DOWNLOAD: Cost comparison tool: Google Apps vs. Office 365

The contenders

The two most well-known productivity suites are Google Apps and Office 365. Each offers an array of functions, so it can be tricky scoping out the similarities and differences. Table A shows some of the most common services offered by each.

Table A

Table A

The productivity suites we'll be looking at offer most or all of the following options:

  • Hosted email
  • Mobile email from an array of devices, including iPhone and Android
  • Document/spreadsheet/presentation tools
  • Instant messaging/conferencing
  • The ability to host a public website
  • The ability to use your own domain name and email addresses
  • The ability to manage user accounts on your own
  • Calendar sharing
  • Security (encrypted connectivity)
  • 24/7 phone support
  • A 99.9% uptime guarantee

When it comes to a 99.9% uptime guarantee it's worth pointing out that this translates to 8.76 hours of downtime per year, or 10.1 minutes per week. It doesn't mean that this downtime WILL happen, only that they're permitted this much leeway to honor their obligation to the customer. 99.999% uptime is a better deal for customers; that translates to 5.26 minutes of downtime per year (but it can be more expensive).

The plans

In terms of user capacity, Google Apps is straightforward. For small, medium, or large companies, it offers two plans:

  • Google Apps for Work: "All you need to do your best work, together in one package. Get business email, video conferencing, online storage and file sharing that work seamlessly from your computer, phone or tablet."
  • Google Apps Unlimited: "...the premium business version of Google Apps. In addition to everything available in Google Apps for Work, it includes unlimited storage and Google Vault for everyone in your organization, plus additional Drive administration, auditing, and reporting features." Google Apps Vault is "an add-on for Google Apps that lets you retain, archive, search, and export your organization's email for your eDiscovery and compliance needs."

Microsoft has a wider array of options. It offers the following Office 365 plans with associated descriptions.

Small Business (best for companies with up to 300 employees)

Enterprise Business (for companies with more than 300 employees)

  • Office 365 ProPlus: "Fully installed Office on PC/Mac with apps for tablets and phones (email not included)."
  • Office 365 Enterprise E1: "Online versions of Office with email and video conferencing."
  • Office 365 Enterprise E3: "All the features of ProPlus and E1 plus compliance tools, information protection, and voicemail integration."
  • Office 365 Enterprise E5: "All the features of E3 plus a new class of unified communications solutions with advanced Skype for Business meetings and voice capabilities."

Note that both Microsoft and Google have education plans, and Microsoft offers government, nonprofit, and home plans. However, I'll leave those options out of the scope of this article, since we're focusing on what standard businesses can expect to pay for these products.

The features

Table B shows how the features stack up among the nine productivity suites. If a suite shows "N/A" for an Annual Price Plan, only the [per] monthly price plan applies.

Table B

Table B

    1) Requires an annual commitment; monthly price shown is based upon that.

    2) Google provides 30 GB of combined storage for Gmail, Drive, and Photos. There are no storage limits for Google Apps Unlimited, except for organizations with four or fewer users, at which point each user receives 1 TB of storage space.

    3) Provided by Google Sites or Microsoft SharePoint Online, depending on the plan. Both options permit 10 GB of storage plus 500 MB additional per user.

    4) Instant messaging includes video chat; Google uses Hangouts and Microsoft uses the Lync IM client.

    5) Web conferencing is provided in Google Apps by using Hangouts and in Office 365 by using Lync or Skype.

    6) Social networking is provided in Google Apps by using Google+ and in Office 365 by using Yammer.

    7) For Google Apps you'll need the Google Hangouts plugin. For Office 365 you'll need a Lync server or online service provider.

    The costs

    Our cost analysis download will help you determine total costs for your organization. It lists what you can expect to pay for each plan in amounts of one year, three years, and five years, assuming scenarios of 25, 100, or 500 users. It also includes a calculator tool that makes it easy to figure out various usage scenarios for your company.

    Figure A shows The difference among the nine plans and the monthly versus annual costs for one year of service for 25 users.

    Figure A

    Figure A

    When the user count jumps to 500, the difference between a monthly plan and an annual plan becomes more apparent. Figure B compares the costs for one year of service for 500 users.

    Figure B

    Figure B

    According to Microsoft, "You can mix and match Office 365 plans. Please note that there are some license limitations at the plan level. The Office 365 Business, Business Essentials, and Business Premium plans each have a limit of 300 users, while the Enterprise plans are for an unlimited number of users. For example, you can purchase 300 Business Premium seats, 300 Business Essentials seats, and 500 Enterprise E3 seats on a single tenant.

    Microsoft also says, "Discounts are available for Office 365 enterprise agreement customers (typically 250+ licenses) who want to purchase through volume licensing. A Microsoft expert can help you explore the purchasing options for large enterprises and help you determine which is best for you."

    SEE: Home usage of company-owned equipment policy

    Other costs

    So what about setup costs? These prices are "as-is." No initialization fees or "first month-last month" gimmicks. You pay as you go, depending on your needs. Of course, you have to have the hardware and data plans to connect to these sites, whether your employees will use desktops, laptops, tablets, or mobile devices--and costs for these need to be factored in separately.

    Training costs will depend on the size and background of your user base. If you have an office with eight tech-savvy twenty-somethings, they can probably figure out how to get up to speed for any of these productivity suites in a couple of hours with a small baseline of guidance. If you have several corporate locations spread out across the country with 100,000 users of all skill levels and backgrounds, you'll probably be better off lining up official training seminars and company meetings to go over the process. You can either use in-house trainers or outsource it to the experts, whose rates and availabilities will vary.

    SEE: Year-round IT budget template

    If you decide to go in-house (or to supplement any external training sources you bring in) free videos and documentation are available for both Google and Microsoft productivity suites, so you're really looking at just paying the labor costs involved for each user to get them acquainted with these packages. As a quick rule of thumb, calculate five hours per employee multiplied by the average labor cost in your organization. For instance, if your average salary is $25 per hour and you have 200 employees, you could assume it will cost you $25,000 to get your staff ready to use one of these productivity suites ($25 x 200 x 5 hours) working with free training online.