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Good comparison of Microsoft and Google "Cloud" initiatives.  Sure, Microsoft has the numbers.  They own the legacy desktop productivity platform.  But their execution in the Cloud is horrific.  Businesses will always opt for integrating existing desktop apps with Cloud productivity systems over rip-out-and-replace platform alternatives.   But the benefits of highly interoperable and universally accessible Cloud communications and collaborative computing have to be there.  So far MS has failed to deliver, and miserably so.   excerpt:  With Office 365, Microsoft has finally delivered an end-to-end cloud platform for businesses that encompass not only its desktop Office software, but also its server software, such as Exchange and SharePoint. Contrary to Google's narrative, cloud based office software is still a wide open market. The three million businesses that have "Gone Google" - proclaimed on billboards in San Francisco airport's new Terminal 2 - are for the most part Gmail users, who are still happily using Microsoft Office and even Microsoft Outlook. Gmail is a fast, cheap, spam-free and great solution for business email, especially relative to the expensive, lumbering email service providers. Google Apps has definitely found a niche for online collaboration, but generally for low-end project management types of spreadsheets and small documents. The presentation and drawing Google Apps are barely used. Yes, there are definitely Google Apps wins, since it seems cheap. On implementation, businesses find that switching to Gmail is one thing, but switching their entire business infrastructure to Google Apps is a completely different animal that goes far beyond simply changing how employees are writing memos.

Clash of the Productivity Clouds: Before we attempt to answer those questions, one thing must be stated flatly: Office 365 and Google Apps are vastly different products. Office 365 is meant to be used with a locally installed version of Office (preferably Office 2010), whereas Google Apps lives 100 percent in the browser. To use a hackneyed metaphor, we're talking apples and oranges. With so many feature variables between the two products, blanket pronouncements don't make a lot of sense. Nonetheless, with the production release of Office 365, the cloud era of desktop productivity software officially kicks into high gear. Office 365 works with Microsoft's Web App versions of desktop Office applications -- Word, Excel, PowerPoint, and OneNote -- so theoretically, you can use it without a locally installed version of Office at all. But most people won't. The real Office 365 ploy is this: Sick of maintaining Exchange and SharePoint servers? No problem. Pay Microsoft and it will run those servers for you -- and throw in the fancy new Lync communications server. Office 365 represents the first time Microsoft has bundled desktop software (Office 2010) with an online service into a single subscription-based offering. But if you have another source of licenses for Office (2010, 2007, or otherwise), or if you want to run just the Office Web Apps (not likely), you can get an Office 365 license without paying for Office.