Business Plan 101: Microsoft Exchange vs. Google Apps (Cost Analysis)

Posted by in Google Apps, Microsoft on March 21st, 2010 | Comment »

Microsoft vs. GoogleSo you want to start a business, but don’t know how to set up your company’s e-mail, or you already have a business, but want to reduce your IT costs.  Then this tutorial is for you.  I break down the costs related to Microsoft’s and Google’s products so you don’t have to do countless hours of research trying to break through the clutter and mass-confusion.

Here are your options: (1) use Microsoft’s numerous products for your company’s e-mail, calendar, contacts, and collaboration tools; or (2) use Google Apps for Businesses.

Microsoft’s prices are becoming so outrageous that you’re starting to feel that your business won’t be able to profit once you’re done implementing their “system.”  First, you’ll have to pay for the hardware: a computer for each of your users and a server to handle your company’s e-mail.  Then you’ll have to pay for the software: an operating system for your server, as well as the Microsoft Exchange software to run on the server. That’s not the end of the fees for Microsoft. Microsoft requires a license for each person who interacts with the system — a Microsoft Server license and the Microsoft Exchange license.  We’re still not quite there yet, there are more fees involved. You’ll also need Microsoft Office for each user and and an IT professional to manage the server since it starts to become rather complicated, especially since Microsoft is likely to release a new version just two years after you bought the last version.  Now it’s starting to sound like all of your business’s profits will go towards running the server.

This model of computing has become silly and outdated due to Google Apps.  Google Apps for Businesses removes all of these costs and provides your business with a suite of applications to run your business easily.  No more worrying about whether the server is up.  No more calculating the costs involved to purchase the hardware, software, and licenses.

With Google Apps, your business receives e-mail; collaboration tools that work with Google Docs, Google Spreadsheets, and Google Presentations; video-conferencing tools; and intranet sites to keep your co-workers up to date with the latest details on projects.  The cost: $50/user per year — that’s it!  No hardware costs, no hosting costs, no software costs — just $50 a year. Compare that to the thousands you’ll be shelling out to implement Microsoft’s “system.”

e-Mail should be simple, easy, and fast — not about setting up servers and firewalls.  Google provides simplicity and Zadling can help your business implement Google as a solution for your business’s computing needs.  Call us today to discuss how Google Apps can help your business — 1-888-652-3135.

Next, I would like to provide a more in-depth tutorial on Microsoft’s business and enterprise options, so you are able to understand the pricing for each of Microsoft’s products.  There are a few different services that Microsoft provides so it becomes rather difficult to distinguish between their various products.

Microsoft Exchange and Microsoft Sharepoint:

There are two different pieces of software involved: (1) Microsoft Exchange — Microsoft’s server software to handle a company’s communications: e-mail, calendars, and contacts; and (2) Microsoft Sharepoint — Microsoft’s collaboration suite.

Microsoft Sharepoint is excellent piece of technology that is great at allowing co-workers to collaborate on projects.  However, I find that Sharepoint is much more complex than what any small- or mid-size business would ever need. Additionally, the costs for Microsoft Sharepoint are out of line compared to the benefits that it will provide for a small- or mid-size business.  This is because you’ll need a server and multiple software applications to run on the server.  Your business can gain the collaboration tools that you desire for a fraction of the cost by using Google Apps.

The first step of implementing this system is purchasing a server, which can be purchased from any computer company such as HP or Dell.  The price of an average server ranges from $600-1200.  The server needs an operating system, so your business will have to spend $1,029 for the software and 5 user licenses for Windows Server 2008 standard edition or $3,999 for the software and 25 user licenses for Windows Server 2008 enterprise edition.  Additional user licenses so more users can access the server cost $40 per license.  Source: Microsoft.com.

Instead of purchasing a server that will be located in your office, hosting companies can provide this service as well.  This service costs $8.95/user per month for a mere 2 GB of e-mail storage. Google Apps can provide 25 GB of e-mail storage for $4.16/user per month.

If your businesses opts to have an in-house server, Microsoft Exchange Server would then have to be purchased so the server can handle your company’s e-mail system.

The following pricing information for Exchange and Sharepoint is from Microsoft.com:

Microsoft Exchange Server will be required to handle your company’s e-mail, calendar, and contacts.  Microsoft Exchange Server 2007 costs $699 for the standard edition and $3,999 for the enterprise edition.  Each user of the server will also need a license, which costs $67 for a standard license and $102 for an enterprise license.

If you want increased collaboration tools, essentially the same tools that you’ll be using with Google Apps, you will have to purchase Microsoft Office Sharepoint Server. Microsoft Sharepoint Server 2007 costs $4,451.  Additionally, your users will also need a Client Access License.  A standard license costs $94 and an enterprise license costs $168.  This is a license in addition to the license you already purchased for Microsoft Server, Microsoft Exchange, as well as Microsoft Windows. You also have to keep in mind that your company may require multiple servers and the $4,451 fee must be paid for each server that the software runs on.

I must also mentioned that Sharepoint requires a Microsoft SQL Server 2000 or 2005 in order to run on your system. Microsoft Sharepoint standard edition costs $5,999 and the enterprise edition costs $24,999.  You’ll then need to purchase the user licenses. 5 standard licenses cost $1,849 and 5 enterprise licenses cost $13,969.  Source for pricing information: Microsoft.com.

Sharepoint is able to create internal company websites, but it can also be used to create websites for non-employees that are published over the internet.  This feature will cost $41,134 for the external website license.

As you can see, the costs associated with Microsoft’s messaging and collaboration tools are enormous and simply outrageous.

To summarize, your business will have to buy a computer with Microsoft Windows for each user, then a server, then Microsoft Server software, then the Microsoft Server license for each user that accesses the server, then more software for Microsoft Exchange, the Microsoft Exchange software licenses  for each person that uses then system, the Microsoft Office software and licenses for Word, Excel, and Power Point, and then an IT professional to manage the system for this to work — and you don’t even get collaboration tools!  However, you can purchase them for a few extra thousand.  This explains why Bill Gates is the richest man in the world.

This is what’s referred to as the “IT black hole.” Dollar after dollar are being spent for countless measures that don’t even need to be taken in the first place.  Save money by using Google Apps!

Microsoft Business Productivity Suite:

Since Sharepoint is better suited for highly complex large corporations, Microsoft introduced Microsoft Business Productivity Suite. A product that may be a better fit for small- and mid-sized businesses.  The business productivity suite is in an online format, much like Google Apps. It’s more simplistic since it is a hosted services for your business and does not require any on-site hardware like Microsoft’s Exchange Server.

The Suite includes a few separate tools: Exchange Online, Sharepoint Online, Office Communications Online, and Office Live Meeting.  Together, this package costs $120/user per year compared to $50/user per year for Google Apps for Businesses.   These services can also be purchased separately: $60/user per year for Exchange Online, $63/user per year for Sharepoint Online, $24/user per year for Office Communications Online, and $54/user per year for Office Meeting live.

Google Apps provides exactly the same tools than Microsoft Business Productivity Suite provides.  Exchange Online is Microsoft’s e-mail, calendar, and contacts suite, which are all services provided by Google.  Microsoft provides this suite for $60/user per year.  Your business can receive the same services from Google for $50/user per year and also receive Google’s intranet site creator, video conferencing, instant messaging, and Google Docs collaboration tools.

Additionally, your business may desire additional applications that work with these two products whether it is Google Apps or Microsoft’s Business Productivity Suite.  The best example of an add-on application that your business may want to use is customer relationship management (CRM) software. With Microsoft, this application will cost you $44/user per month.  With Google, a CRM provided by Zoho is free for the first 3 users and just $12/user per month for additional users.  Salesforce.com, which integrates with Google Apps, can also be used as your business’s CRM starting at $5/month.

With Microsoft, no additional applications can be integrated with their productivity suite, but with Google, there is a whole range of applications on the Apps Marketplace that can be installed and integrated with Google Apps such as project and task management tools, surveys, payroll management, invoice management, and business social productivity applications. The possibilities are endless with Google Apps and the Apps Marketplace.

Cost Summary:

In this example, these are the costs involved for a business with 50 employees.

Conclusion:

If you’re confused already, you should be.  You want simplicity.  Setting up e-mail for your business shouldn’t be confusing.  You shouldn’t have to worry about whether to purchase a server or find an Exchange Server host.  e-Mail should be about picking out a service provider and having it just work.

Take confusion out of the equation and replace it with something that just works.  By using Zadling’s service, your business will be up in running in the cloud — business tasks will be streamlined and you will have a system that is simple and just works.  No server costs, no separate fees for the software and the license, no headaches.

Call us today: 1-888-652-3135.

» Ask Zadling about implementing Google Apps for your business

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