Once upon a time, choices were easier. If you wanted software to support word processing, spreadsheets, and presentations for your organization, traditional installed office software like Microsoft Office (available to qualified organizations through TechSoup) was the almost ubiquitous choice. OpenOffice.org followed to provide many of the same features in a free and open-source version.

Then came the rise of online office software like Google, Zoho, and ThinkFree. Over the last few years, these tools have matured into reliable ways to create, manage, and collaborate on these same types of office documents — all on the web. Instead of installing software, these tools let you access and edit your files online.

Just in case you weren't confused yet, Microsoft has now introduced a new product: their Office 2010 suite includes Web Apps, an intriguing option which allows you to edit Word, PowerPoint, and Excel documents over the web and collaborate with your desktop applications of the same product.

Which of these tools is likely to work best for you? You may find that one is particularly suited to your organization, or it might make sense to use a combination. In this article, we consider the overall benefits and downsides of these office software options and the situations in which each of them shines.

Features

Microsoft’s Office has developed a huge set of advanced features over the years. The same is true of OpenOffice.org, as it provides a similar set of bells and whistles. Organizations that use these applications’ advanced features will find them hard to replace. While the online suites work fine for standard reports, memos, spreadsheets, and presentations, they don't offer all the sophisticated features of these established tools. Many of the features that savvy users rely on heavily — especially those in print-heavy work environments — will be difficult or impossible to find online. Things like mail merge, detailed control over fonts, easy formatting of presentation handouts, or very sophisticated spreadsheet formulas may well be missing in the online suites.

Google’s tools are the most straightforward. They aim to provide a straightforward, friendly set of features to cover the core needs of business users, and succeed with perfectly functional but limited features to create, edit, and share documents. Zoho and ThinkFree provide a step up, with more advanced functionality. However, neither provides all the sophisticated functionality of Microsoft Office (for instance, templates, sophisticated change tracking, and more).

Microsoft Web Apps has a somewhat different model; you can use it in two different ways. You can access it as a free online suite (by logging in through Windows Live SkyDrive, using Internet Explorer, Firefox, or Safari) — in which it provides a basic but useful set of features akin to Google Docs or Zoho. However, it’s geared to integrate heavily with the desktop version of Office, if you have it. For instance, you can use Office’s advanced functionality to setup the document, save it to the SkyDrive to access via Web Apps, and then use that to view all the complex formatting of your offline versions, and edit the content. You can see all the formatting, but not necessarily edit it. For instance, Web Apps will allow you to apply heading styles that you’ve created in a desktop version of Word, but not to edit those styles or create new ones.

In short, no online office suite is going to give you all the functionality of an installed one. However, one may provide all the functionality that you need. They all offer the ability to import an existing document into a trial interface for free — if you're not sure a suite can do everything that's important to you, upload an existing document and try out the editing features.

Interface

For many users, familiarity is key. Switching from a familiar interface — like Microsoft’s Office’s — to a new one can be a scary process for a sizable organization. Microsoft has complicated this issue, however, by introducing their redesigned “ribbon” interface to all of their Office 2007 and Office 2010 products. The new interface is different enough from the older one to require training for less tech-savvy users… meaning that simply staying with Office will not necessarily provide a familiar environment, especially if you are upgrading from an older version. 

In fact, there are two products that provide interfaces that are likely to be more familiar to users of Office 2003. Both OpenOffice.org and ThinkFree’s interfaces are nearly identical to Office 2003 — so in fact, if your staff is on Office 2003, it could be as easy to switch to one of these as to upgrade to the new version of Office.

Alternatively, the simplicity of Google’s tools in particular may appeal to users with straightforward needs. Because Google offers fewer features, the interface is considerably simpler, and those who have never tried any office software may find it easier to use. Zoho provides a somewhat more advanced (and thus more complex) set of features in an interface that will feel familiar to Office users, but may require some training for less tech-savvy users. Microsoft Web Apps looks similar too but is a bit simpler than the full Office 2010 tools.

So on the interface side, there’s no obvious advantage to either the traditional or hosted office applications per se – instead, you’ll need to consider your options on an application by application basis as well as the needs of your staff.

Cost

If you’re buying the installed Microsoft Office suite at retail rates, cost becomes a huge consideration. Most nonprofits and public libraries don’t need to — TechSoup makes it available for about $20 per computer to qualifying organizations. That means it’s within the same ballpark as many of the other online tools. Microsoft Web Apps and OpenOffice.org are free. Google Docs is not only free, but nonprofits can upgrade to free robust support for Docs through the "Education Edition" of Google Apps for up to 3,000 users. Zoho Business, which is the office tool suite version, is free for up to three users, and $50 per user per year beyond that. (Ask about an additional nonprofit discount.) ThinkFree costs $50 per user license.

Office software is critical to effective operations. At these small differences in price — perhaps $500 per year at most for a 10-person organization — you should prioritize how well the software meets your needs over whether it helps you save a few dollars.

Collaboration

The way in which you share and collaborate on files varies considerably between the online and offline models. Traditionally, with Microsoft Office or OpenOffice.org you send the file via email to the people you want to share it with, or save it on a network file server so others in your office have access to it. They open it in their version of the software, edit it, potentially track their changes, and send it back to you. The functionality to carefully view and incorporate changes can be very useful for those who want to be able to easily see what’s changed and approve it before it is added.

Web-based applications provide an easier way to share these traditional files. For instance, Microsoft Live provides free, shared, online spaces where your team can post and share documents without the need to email files around. The functionality lets editors “check out” and “check in” files to prevent multiple people from making different offline changes at the same time. Other web-based tools offer similar functionality.

However, Google, Zoho, and ThinkFree have considerably more robust built-in online collaboration features. All three let your team edit the same files and see other people’s changes at the same time. This is very useful when collaborating on the same document. Everyone can update the file in one location, which greatly simplifies version control, compared to having multiple versions of the file. The software tracks all revisions over time, but the changes aren’t always shown within the document itself, as per Microsoft Word’s Track Changes features — instead, the changes are shown in a separate revision history in some of the tools.

Microsoft Web Apps is moving in this direction, but is not quite all the way there yet, as of May 2010. Currently, multiple users can edit simultaneously in Excel but not Word or PowerPoint.  However, this is likely to change over time. Interestingly, they have just announced a version of Web Apps – called Web Docs – that integrates with Facebook. Presumably, this will allow easy collaboration on documents with your friends on Facebook.

For all four of these tools — Google, Zoho, ThinkFree, and Web Apps — it’s easy to give internal staff members or other regular users of the tool access to your files. Each of the collaborators will need to register for the software in order to edit the files, however, which can be a barrier for casual reviewers. All four tools offer free versions, so at least one-time collaborators don’t need to pay. And you can always save your document into a more familiar Office file if you prefer to email it around.

File Storage and Backup

When you use traditional, installed office software, you store all your files locally — either on a hard drive on your own computer or on a network file server. You need to back up those files yourself, or you run the risk of losing them all if something happens to your computer or server.

With all of the online software, you can use a web-based tool to manage and organize your files. The file-management interfaces vary: While some offer useful functionality, like the ability to tag files with keywords, they also add another layer of complexity for your users to learn and understand. However, they all back up your files for you, with their own offsite server farms, making it less likely that you’ll lose them due to a computer problem or an office catastrophe.

It's also remotely possible that something will happen to the online service, and files will be lost. This is almost certainly far less likely than if you are storing them on your own server, but it's important to store critical documents in more than one place. The ease of backing up files from the online software tools varies from one tool to another, so take a careful look at backup features if you're considering using them to store a number of important files.

Access and Performance

Online office software is available anywhere you have an Internet browser, which can be a big advantage. If your staff uses a PC at work and a Mac at home, or needs to access information while on vacation, you don’t need to worry about whether or not they have the right tools.

Office Web Apps brings this advantage to Office 2010. You can work on a document using the traditional installed Office applications, save it to the SkyDrive, and then open it anywhere from most any browser and computer. When you’re done editing, you can pull it back into your desktop version of Office, if you like.

However, online tools are dependent on the speed and reliability of your Internet connection. While all of the online office tools have the ability to pull files down to your computer and work on them offline, they’re designed with the expectation that you’ll do most of your work right in the web interface. If you have a slow or intermittent connection to the Internet, the online tools (particularly the more complex Zoho and ThinkFree interfaces) may be annoyingly slow to use.

You're also dependent on the online vendor to keep the tools up and running — if they go down, there's usually nothing you can do but wait for service to be restored. Unless you have a large IT team, there's no reason to suspect that your own network and desktop will be more reliable than the typically very reliable online applications provided by a large vendor, but it's certainly worth checking into the reliability of lesser-known vendors.

Security and Privacy

Both online and offline office suites are generally secure. The files created by traditional installed software are as secure as your computer — with a solid firewall in place and password protection for your computer, they’re likely to be safe from all but a concerted attack. The same is true for an online office suite. As the online software and all your files are password protected, they’ll be private (unless you choose otherwise) and protected from prying eyes. Any truly sensitive data, however — such as credit card data, medical information, or critical organizational secrets — merits additional security. This type of information shouldn’t be stored using online files, and you’ll need to take substantial extra steps to secure them — even on your desktop.

Microsoft, Google, Zoho, and ThinkFree all have reasonable privacy policies, and certainly aren’t going to change or sell your files. However, they do have your data, and it’s important to be clear on the details of what they might do with it. For instance, Google specifically creates a vast data store from their hosted applications that allows them to understand and track Internet activity. Does that hurt you? Not directly, but some people find the large amount of data Google collects to be unsettling, and are concerned as to what they might do with it in the future. Depending on your mission and your comfort level, you might opt to use only vendors who pledge, in writing, not to use your data in any way.

Lastly, if you think you might need to protect your data from a government subpoena, online office tools are not likely to be the right choice for you. No software vendor will contest a government order to turn your data over.

Upgrades and Maintenance

Last but not least, consider what you’ll need to do in order to make sure your staff has up-to-date software. The online tools offer a big advantage in this area — all users automatically get any feature upgrades to the software, and you won’t have to do much of anything to keep your team up and running. Upgrades are generally incremental, so as to not require much new training for your users.

If you’re using traditional installed office suites, you’ll want to make sure you have an upgrade and maintenance plan. It’s important that users receive the relatively frequent incremental releases, as they may patch security holes. That used to mean a labor-intensive process if you have multiple users, but these days, most installed office applications update themselves over the web. It may be more of process to move your office from one version of the software to another. For instance, when Microsoft released Office 2007, with both a new interface and new file format, organizations had a hard decision to make about whether to move to the new version and retrain their staff, or stay with the old version and have more difficulty reading the files created by organizations that had adopted the newer versions.

Choosing for Your Organization

Online office software isn’t likely to completely replace traditional installed office software any time soon. In fact, it’s unlikely to make sense to switch an office full of happy Microsoft Office users completely over to an online office suite, given Microsoft's affordable nonprofit pricing. The new Web Apps features even bring the Microsoft Office suite considerably closer to the remote access and collaboration features of a tool like Google Docs. For small or new organizations, though, the collaboration features and lack of maintenance of an online suite can be a compelling reason to move to online-only apps.

In fact, the collaboration features can be useful to many. A number of organizations rely on Microsoft Office for their day-to-day work, but use one of the online tools for documents that require a lot of input from a number of different people. For instance, here at Idealware, we use Microsoft Office for internal work, but use Google Docs to let reviewers easily see and add t

At the end of the day, it likely doesn’t make sense to make a firm choice between online and traditionally installed software. Instead, make a decision about how you’re going to support the core day-to-day needs of your users, and then supplement that with additional options as needed.

For More Information

The Truth About Hosted Software Packages
Idealware’s higher-level look at the general pros and cons of hosted versus installed software.

Six Office Alternatives
A nice overview of a number of the competitors to Microsoft Office.

Online Office Apps Get Real: Google Docs vs. ThinkFree vs. Zoho
ComputerWorld’s reasonably detailed and useful comparison of the three online programs.

The following people also contributed to this article;

• Douglas Back of the Lower Manhattan Cultural Council

• Steve Backman Database Designs Associates

Thomas Taylor of the Greater Philadelphia Cultural Alliance

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