Is Microsoft Office 365 A Threat To Google Apps?

Today Microsoft announced that their collection of hosted software for business — which was termed Business Productivity Online Suite — will now include web-based versions of Office and will now be known as Microsoft Office 365. Kurt del Bene, Office president, noted that the most recent version of office was “developed… with the goal of having products that could be used both online and as traditional software,” according to Cnet. And now they’re taking that mentality and applying it to enterprise-level infrastructures.

Office 365 will be a subscription service, with flexible packages and pricing to fit a variety of needs and budgets. The most fully featured will include the online versions of Word, Excel, PowerPoint, Sharepoint, Exchange, the Office Pro Plus desktop suite as well as communications server tools. Prices range from $6 to $27 per user per month, which is quite a bit more than their assumed major competitor, Google. Google Apps For Your Domain, the business version of the Google suite of productivity tools (Gmail, Docs, Calendar, etc.), costs just $50 per user per year.

Will the shift from selling software once and relying on upgrades to selling a subscription service prove profitable for Microsoft? If the company can prove themselves more reliable, innovative, and more responsive to customers than Google, they stand a good chance. A fully functional version of Word, Excel and other Office programs online is tempting, especially for users who switch between multiple computer. And with the Office brand already trusted by enterprise-level users and the increasing focus on cloud computing, the odds are better. Still, Office 365 will have to prove itself worthy of the premium quickly to gain steam.