With , Microsoft has made a major upgrade to its cloud-based communication and collaboration suite, offering a Google Apps alternative that is stronger than its predecessor, the Business Productivity Online Suite (BPOS).

"Office 365 is the future of business productivity for Microsoft," says Kelly Waldher, director of Office 365 product management for the company. Among the improvements: Office 365 applications, including Exchange and SharePoint, are now based on the 2010 edition of their on-premise versions.

Office 365 also comes with Lync Online, an upgrade to BPOS's Office Communications Online that offers IM, presence, Web conferencing and voice communications. Office Web Apps, the online version of Microsoft's ubiquitous productivity suite, is included, along with the option to subscribe to get the full-featured application.