After months of squabbling between Google and Microsoft over Office 365 and Google Docs, things finally came to a head today with the official, general release of Office 365 by Microsoft CEO Steve Ballmer in New York.

It’s not that the two have been verbally ferocious with each other -- that’s not really Google’s style --but Google has been piling on the pressure with weekly, even daily upgrades to Google Docs and Apps in the run up to the event.

Pricing or Functionality?

Sifting through the overly complicated pricing of Office 365 -- it offers three different editions and numerous pricing plans, which boil down to about US$ 6 per user/month -- with Office 365, Microsoft is going after the SMB market among others, the very space where Google Apps has been hawking its wares since the beginning.

Google Apps, on the other hand, works out at US$ 5 per user/month, or US$ 50 per user/year, which while providing a significant enough price difference with Office 365, is probably not so great that it will become the principal concern of those weighing up the benefits of one over the other.

Functionality

It is really in the functionality that it is going to count, and there is no question that Office 365, on paper at least, offers a lot more, including SharePoint online and Lync, but this may not swing companies either way.

It has been pointed out before, for example, that SharePoint is probably too big and cumbersome for small businesses, which, generally speaking, are looking for productivity tools, many of which are available in Apps already.

Office 365 vs. Google Apps Flexibility

Whether App is flexible enough to cater to all business needs depends on who you’re talking to, with many pointing out flaws in Apps such as the lack of offline support -- Google swears this will be ready this summer -- or even issues with the user interface.

The flip side of this is that Office 365 doesn’t allow for third-party integration, which is going to be a problem, especially as Google Docs has been able to team up with the likes of Box, and there is probably some who are concerned about outages with BPOS, the precursor to Office 365, over the past months.

So who’s right and who’s wrong? Again, it depends on where you’re standing, whom you’re talking to and what you’re looking for. On this, we’ll take a rain check; it’s easy enough to find flaws and advantages in both.

Google vs. Microsoft

That hasn’t stopped Google from issuing a pre-Office 365 salvo in the direction of Microsoft; what former US president Ronald Reagan used to call a preemptive counter attack -- a euphemism for striking hard before the enemy can.

The strike in question came from Shan Sinha, a former director of strategy for Microsoft SharePoint, and now Google Apps Product Manager via DocVerse, which Google bought last February.

In the Google Enterprise Blog the day before the Office 365 release,  he outlined some of the reasons why he felt Google Apps was superior to Office 365. We let Microsoft have a full run for the Office 365 launch, so let’s look at what Sinha says.

If it reads like marketing guff, that’s probably because it is, and aims to point out what Google sees as some of the holes in Office 365. Surprisingly, he only highlights three issues, which probably indicates he was stuck for time rather than difficulty identifying problems with Office 365.

Arguing that technologies get more complicated as they get older -- for this you could read Office 365 is made up of a number of established office productivity applications (with the possible exception of Lync) that have become complicated over time, and are now being bundled together -- so sometimes “it's worth considering a clean slate," or at least Google Apps.

He then lists the problems as follows:

1. Designed for Teams

Office 365, he says, is designed for individuals; Google Apps is for teams. Given the importance of enterprise collaboration, you can see how this might get potential users thinking.

With Apps, you can work with multiple people in the same document. There’s no need to worry about whether it’s possible to share a spreadsheet, or co-edit a presentation. You can see people type in real time, and share a file in two clicks.

The kicker, he says, is that you don’t have to buy additional licenses to work with others, or hope that users outside the company have upgraded to the same software. Ouch!

2.Use Anywhere

While Office 365 is optimized for Windows-based PCs, Google Apps works anywhere from desktops to laptops, Chromebook, table, smartphone, Mac or Linux. You can start editing on one, save, and then move to the other “When the Web is the platform, it just works."

3. Pricing

Google Apps is US$ 5/month with no lock-ins. Office 365 is… well, difficult to work out with three editions, two tiers and 11 planes.

Google Apps asks for nothing extra for basics such as phone support and productivity apps. No long-term contracts or opaque enterprise agreements, and Google provides a dedicated team of engineers whose sole goal is to get data in for free.

4.Cloud Computing

Office 365 is about the desktop. Apps is about the web. There is no client software to install and upgrades are done at the Google end rather than at the user end. He says in the last year alone 125 features were added.

Downtime for Gmail this year will work out at around 0.01% of the time, or about five minutes per month, and says that when there is unscheduled downtime, they really are transparent about it.

Users Decide

With Office 365 on general release now, it may finally be possible to get some idea of the working advantages of both products.

While Google and Microsoft have spent quite some time pointing out faults and weaknesses in both products, the real difference lies in their plans for the future.

Google Apps has always been in the cloud, and that is indisputable. Microsoft’s productivity apps are essentially desktop-based. Microsoft has been slow in taking to the cloud; that, too is indisputable.

Office 365 is the first major jump in that direction and there are bound to be problems; whether it succeeds or fails is going to depend on how quickly Microsoft responds to those problems. Ultimately, it is the users who will decide, voting with their pockets as they tend to, and no amount of posturing, PR, or slick marketing is going to change that.