This comparison below is based on Microsoft Office Outlook 2007 with Microsoft Exchange Server 2003 and Google Apps for your Domain's free version of Gmail.
There are many differences between the two products in terms of how they can be configured and the type of workflow that they support. I'll go through each area of difference below, comparing and contrasting. At the end, you'll find an overall comparison and some recommendations.
But Gmail is still much faster. And as an added hassle, if Outlook ever returns incorrect or incomplete search results you have to dig into the settings to tweak or rebuild your search index, hoping that you can fix the problem.
One advantage of Outlook search is that it searches within attachments. Google Desktop Search would accomplish this if you used a separate email program (even Outlook!), but the Gmail web interface does not. Still, the inability to search within attachments is a small price to pay for the superior speed and accuracy of Gmail's search.
Search Verdict: Gmail wins for a faster and more reliable search. Outlook is just a step behind with full attachment search.
Outlook has always had categories, which behave similarly. In version 2007, Outlook created a faster system that used color-coded/named categories and Search Folders to perform nearly the same functionality as Gmail. Most people are not aware of this feature because it's less noticeable than the Outlook folder tree and would require setting up search folders for each category to function like Gmail labels. However, since categories have no relationship to the folder location of an item they're not a complete replacement for the folder tree.
On the surface, labels seem superior to a folder tree—after all, tags are the preferred method of identifying data on many new web sites. There are a few problems with labels, though:
In Outlook, a label-like feature is available but harder to access. It has additional filtering and organizational capabilities, but most users might not dig that deeply into the software to find them, especially since in Outlook one still has to work with the folder tree to move items out of the Inbox.
Folders vs. Labels Verdict: Gmail wins for a simpler, generally more flexible approach.
While it appears there are more options available within Outlook, Google has done a better job of helping people get to the most relevant options right away. Gmail also allows you to test exactly how the filter would behave before you save it:
Outlook has taken a step in the right direction by providing a right-click option called "Create Rule...." It does a better job of exposing the most relevant information, but it's still not as easy to configure or test as with Gmail.
Note that Microsoft Exchange users may benefit more from rules than standalone Microsoft Outlook users. Gmail is a server-side tool, so its filters will affect Gmail mail, regardless of where you access it. Microsoft Exchange users will also have this benefit. However, if you do not have Microsoft Exchange and your Microsoft Outlook is not running, the rules will not be processed. This can be frustrating when checking mail remotely.
Once again we have a similar divide—most people will be better off with the faster to configure and easier to test Gmail results, but Outlook has more features.
In my experience with clients and colleagues, people don't use as many Outlook rules as they do Gmail filters, even though filtering is a huge help with the volume of email many of us receive. This leads me to believe that Outlook's rules are more intimidating.
Rules vs. Filters Verdict: Google wins for a simpler, more approachable interface.
If you don't keep an address book and don't plan to, Gmail's Contacts feature is a sufficient Band-Aid in that you never to have to visit Contacts to get some benefits. That is, it remembers email information long after a correspondence.
Outlook also remembers the email addresses of people you've corresponded with, but it stores the addresses in a hard to find text file (called an NK2 file) that people often forget to back up. As such, when people get a new workstation or reinstall Windows they often lose the email information that they thought they had "stored."
If most of your contact activities are about email correspondence, then Gmail and Outlook are roughly comparable since they both hold onto the core data.
But depending on your needs, the products differ greatly beyond that:
Contacts Verdict: No winner. If you're in a business environment, Outlook likely wins. Otherwise, there's no clear choice.
My two issues with Gmail's spam filtering are:
Gmail wins on spam, since there's no installation necessary. For businesses, or people who subscribe to a Hosted Exchange service, a commercial anti-spam service will likely perform better than either product out-of-the-box. (However, most commercial anti-spam solutions can be used with Google Apps for Your Domain as easily as they can be used with Exchange.) Note: the spam count in the image above is a joke.
Spam Filtering Verdict: Gmail wins for doing a decent job without any installation.
Gmail users have 6.76 GB for no charge (or 25 GB for $50/year). The storage they provide regularly increases.
Businesses might feel they are offering reasonable limits to their users, except that many people still attach big files to emails rather than linking to them. Thus there are often many people who have to clean up or archive their email every few weeks. While there are reasons for this (due to the cost of storage), it's a complaint I encounter frequently with clients.
People who use Outlook without an Exchange connection have nothing to worry about with regard to storage space, but they should be careful to back up and split their PST (Personal Storage files) regularly after they hit a couple GB.
Another caveat is that storing your email in the Google cloud is a tough pill to swallow for some people and many businesses. As such, that factor alone may be a deal-breaker, regardless of the convenience.
Both Outlook and Gmail offer plenty of options for file storage, but I, for one, am sick of all the work I have to do to keep my Exchange store size trimmed. Until Exchange storage gets less expensive or businesses suck up more of the costs (sorry!), I'm handing this category to Google.
Storage Space Verdict: Gmail wins for generally offering more space for less (or no!) money, but this depends on a whole host of factors.
User Experience Verdict: No winner. This is even more a matter of opinion than my other verdicts!
Certain activities fit nicely within Gmail's confines and others benefit from Outlook's larger feature-set. You can read more about how I've resolved which scenarios fit which tool, and why I use both.
For the business user with many responsibilities, Outlook's expanded feature-set (tasks, task sharing, message flagging, shared contact list, etc.) is a huge reason why the product is dominant in the workforce.
If little or none of your email turns into tasks, Gmail's filtering, labeling, and search make it a good choice. But since for many people, email inevitably leads to deferred responsibilities, and Google Apps does not yet natively support tasks, I'm going to hand the workflow to Outlook. Fortunately Remember the Milk makes tasks possible in Gmail.
Workflow Verdict: Outlook wins, for natively supporting tasks and offering more workflow flexibility.
Both Microsoft Exchange and Gmail offer scaled down interfaces that work well via web access on mobile devices. (Gmail's is available by accessing their site from a mobile browser or by visiting m.google.com/a. Microsoft Exchange users can access an often overlooked tool called Outlook Mobile Access—just ask your Exchange administrator for the URL to "OMA" on your server.)
Many people have never seen Microsoft's full mobile experience because they are simply using the desktop version of Outlook and/or are not on a Microsoft Exchange server. But I have to hand this to Microsoft, since Exchange not only synchronizes email but also calendar, contacts, and tasks, making this information fully accessible offline via ActiveSync (or other third-party services like BlackBerrys').
If you don't have access to an Exchange server but prefer Outlook most of the time, your best bet is to use Gmail as your email host and Outlook as an IMAP application—then you'll at least get much better mobile access than what is likely provided by your Internet Service Provider. We'll see if/how MobileMe changes the landscape.
Mobility Verdict: Outlook with Exchange wins. And non-Exchange Outlook users could host their email with Gmail to get its mobile tools anyway.
I happily use both Hosted Exchange and Google Apps for different purposes, but I know that for critical business needs there's a person who I can get on the phone to help with Exchange problems. Google offers support, but they have a very different model and are not providing the "on call support" that many businesses depend on.
If you're a do it yourself-er, you have much less chance of messing things up with Google Apps for your Domain than by setting up Exchange yourself. However, Hosted Exchange providers and a large pool of qualified technicians are a better alternative for the tricky issues that come up when you least expect them.
Note: if you're the "family geek," I highly recommend getting Google Apps for your Domain. I recently switched siblings, parents, and grandparents to this and it's a breath of fresh air. Exchange was a bit too costly and unnecessary an option for family technical support.
Support Verdict: Outlook wins for having a larger support ecosystem.
I personally use Outlook for business correspondence and managing responsibilities, and Gmail for social media and most web activities. Some people combine their activities and choose just one email application, and that's fine, too.
If one thing is clear, it's that Gmail has become an increasingly mature product that can be used for business. With the Postini acquisition, Google is beginning to offer enterprise-level services (like compliance archiving, service level agreements, and more comprehensive spam policies). I foresee the addition of tasks and integration with the Google Search Appliance positioning Google squarely against Microsoft.
At the same time, Microsoft has long been making progress in the Software as a Service space, primarily with their hosted Exchange offering and now with hosted Microsoft CRM. Earlier this month, Microsoft announced that it would begin offering these services directly instead of just through partners, with starting prices well under $10/user per month (as of now with 5 user minimums). This positions them squarely against Google.
Competition here is crucial for our success, as it's a large part of our own productivity as knowledge workers. Regardless of the tool you pick (Thunderbird's pretty awesome, too!), you'll have plenty of company and some welcome changes ahead.