Today Microsoft launched Office 365 which takes the Office suite and integrates it with cloud storage and synchronous online document editing. Google previously enjoyed dominion in this market and is now facing a real competitor. With so many offices around the world already using Office, Microsoft has the opportunity to seamlessly transition users into their cloud product, provided they can make it worthwhile.
On the commercial side Office 365 is significantly more expensive than Google Apps, but promises a larger feature set and (theoretically) less user learning curve. On the education side, the cost is free for students but $10/month for teachers and staff. This means for a small school with 20 staff and 200 students the cost would be about $2,400/year. Google Apps for Education is free.