Office 365, Microsoft's answer to Google Apps for Business, just became available to the public for beta testing. With this move, Redmond comes closer to delivering a package of tools to companies seeking email, word processing, web-based meetings and scores of other services that work on PCs and mobile devices alike.

But wait a minute, what about Google Apps? Wasn't that Google's answer to Microsoft's dominance in the productivity space? After all, Microsoft has held a steady lead in such desktop software for decades. It wasn't until 2006 that Google released Docs, a bare-bones online word processor formerly known as Writely. Docs still barely scratches the surface of the features found in Microsoft Word.

That's all true, but Google offered collaboration as a killer feature while Microsoft dragged its heels in migrating Office to the cloud. Office Web Apps - online counterparts to Word, Excel, and PowerPoint - didn't reach the masses until nearly a year ago.

Users of the free Google Docs only need to press the Share button to invite anybody to a document and watch each others' edits happen live. People who didn't 'get' what Microsoft SharePoint does, or didn't want to pay for a corporate account, could tinker with collaboration instantly in Google Docs. That kind of lightbulb moment radically shifted the way many people work.

Why these services matter

The cloud - just another buzzword for anything stored online - is where the future of productivity lives, after all. More and more workers take their work away from their desks onto mobile devices, and bring their own smartphones and tablets to work.

Office 365 and Google Apps for Business promise to manage the nitty-gritty, back-end tasks that many businesses pay IT staff to handle. Their cloud services can free a company to get things done without a tech whizz. There are potentially big savings in migrating tools to the cloud. Online meetings reduce the need for business travel, and web and mobile apps enable workers across oceans to work on the same page, literally, at the same moment.

Plus, outfitting employees with software that works in a web browser means there's little need to install local applications, then manage updates and patches. You may not even need to equip workers with computers - or outfit headquarters with a server room and IT staff.

NEXT PAGE: What's inside?

  1. Two tech titans go head-to-head with productivity tools
  2. What's inside?
  3. Which will win?