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The competition between Google (News - Alert) Apps and Office 365 has been fierce for some time now and it seems as though it will continue to heat up going into 2013. Both productivity suites have managed to gain ground throughout 2012 but thanks to more conservative pricing, some are declaring Google Apps the winner in terms of larger clients.

In fact, a recent report from The New York Times states that Google has managed to snag more large contracts in 2012 compared to recent years, adding big names clients to its growing customer base. Additionally, in terms of federal government contracts that both Google and Microsoft (News - Alert) competed for in 2012, Google won 23 while Microsoft snagged only 10.

While price is generally touted as the primary difference between Google Apps and Office 365 — the former costs $50 per year per person, while the latter starts at $72 per year per person — there is a bit more than that differentiating these two offerings.

For one thing, Office 365 boasts more robust enterprise-focused services such as Lync, Sharepoint and Yammer, which Microsoft purchased earlier this year for $1.2 billion, bringing enterprise social networking to Office 365 customers. Google, meanwhile, offers best-in-class consumer services for free.

For example, Google Hangouts allows for multiparty video chatting tied into Google+, allowing Google Apps to go  head to head with Lync 2010. However, Hangouts doesn't quite match Lync's full communications capabilities.

Another difference between Office 365 and Google Apps is the fact that the latter includes Web-based e-mail. Both of these offerings are constantly evolving, though, so any deficiencies present in either suite may no longer exist within a year.

Furthermore, Google recently revealed that it would eliminate its free Google Apps small business offering in 2013, while Microsoft has extended the free trial period for Office 365's small business offering to 90 days from the usual 30. This may lead many small businesses to favor Office 365 in the year ahead ,yet ultimately we will have to wait and see who is crowned the winner in the space.

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