Microsoft Warns Cloud Users Of 'Hidden Google Tax'

Microsoft laced up its gloves and took another jab at Google this week, warning cloud computing users of supposed hidden expenses in Google's cloud offerings and coining the term "Google Tax."

As preps for the commercial release of Microsoft Office 365, the company is going after its main cloud rival, Google and its Google Apps offerings.

In a blog post, Microsoft called out Google for a "hidden Google Tax," costs associated with Google Apps that aren't part of the upfront $50-per-user, per-year costs. Claiming cloud computing customers are being "unfairly 'taxed' by Google," Senior Director of Microsoft Online Services Tom Rizzo wrote in the blog post that the hidden costs associated with Google Apps are comparable to paying a tax.

"The 'Google Tax' is unnecessary and can add up quite quickly." Rizzo wrote. "This is especially true when running Google Apps alongside Microsoft Office."

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Rizzo said Microsoft recently interviewed more than 90 small and mid-sized organizations that use Google Apps and found that nine out of 10 companies surveyed use Google Apps along with Microsoft Office and most Google Apps users were using only Gmail and calendar. Meanwhile, two in five companies surveyed used Google Docs while two out of three use Office as their primary production applications.

"On the surface, Google Apps may seem like acceptable replacements for enterprise-grade products such as Microsoft Exchange Server or Microsoft Office. But many IT organizations have found that Google Apps bring extra, hidden costs," Rizzo wrote. "Organizations that have evaluated Google Apps have found that the projected versus actual costs of switching to Google Apps greatly increase their total cost of ownership (TCO). In particular, these IT organizations have found that Google Apps are not enterprise-ready and are inadequate without costly add-on applications, even for most small- and medium-sized organizations. The three general areas where organizations feel the Google Tax most strongly are deployment, IT support costs and user training."

For deployment, Rizzo said, Google Apps users have to migrate employee e-mail messages, tasks, folders, distribution lists and other data from solutions like Microsoft Exchange Server to Google Apps, putting a burden on IT departments and end users. And from there, many require third-party applications and add-ons to sync data and contacts. And on the IT support side, Microsoft claims that Google's whack users for $20 per user for an Exchange to Google Apps Migrator, a cost that increases if users move data other than e-mail.

"The patchwork quilt approach to shoring up Google Apps can be costly, and it fails to deliver the integrated experience most end users expect," he wrote, adding that Google also doesn't offer round-the-clock support. And for support, Microsoft said Google offers Google Apps Help Desk Support Services for a one-time fee of $30 for each instance or for $360 annually per user.

Next: Google Responds To Microsoft's 'Hidden Google Tax' Claim

Other hidden annual per user costs, Microsoft said, include $36 per user for MyOneLogin; $8 per user Promevo gPanel; $8 per user for Power Panel for Google Apps; and $33 per user for Postini. Overall, Microsoft estimated it costs $495 per user, per year to effectively run Google Apps.

Meanwhile, Microsoft said Microsoft Office 365 for Small Businesses will run an SMB $6 per month, or $72 per user, per year, much cheaper than Google Apps after the "hidden Google Tax" is factored in.

Google, however, disputed Microsoft's claim.

"There's a reality distortion field over Redmond. Customers know Google's much less expensive than Microsoft," said Andrew Kovacs, a Google spokesperson.

Microsoft, however, contends that Google's low-price guarantee is a smokescreen.

"Benjamin Franklin once said, 'The only things certain in life are death and taxes.' While that may be true, it doesn't mean that people and businesses should have to shoulder Google's hidden costs," Rizzo wrote. "Once people see through the sales pitch, they realize just how poor the return on investment for Google Apps actually is, and why 750 million people have chosen Office to power their business."

Microsoft's claims of a hidden Google Tax is the next phase of Google's and Microsoft's bitter cloud battle as the two go blow for blow in a bout to win cloud computing customers.

Most recently, Microsoft and Google engaged in a war of words over the Federal Information Security Management Act (FISMA). Microsoft threw the first punch, claiming that Google Apps for Government lacked FISMA certification, which is required for cloud solutions for federal government customers. Google refuted Microsoft's FISMA claim, showing that its solutions are FISMA certified, and eventually it came to light that Microsoft itself lacked FISMA certification for its BPOS-Federal application suite. Microsoft BPOS-Federal has since obtained full FISMA certification.