PC World — Of all the technologies that run your business, chances are good that none impact your company as much as good ol' e-mail. While larger organizations have the hardware, infrastructure, and human capital to manage e-mail in-house, small businesses with tiny to non-existent IT departments don't have that luxury. Here's how to get big-business e-mail efficiency on a small-business budget.

For businesses with five to 25 users, hosting your own mail server just isn't worth the effort and expense involved, and can actually lead to more downtime than going with an outside service. While it can tempting for very small companies to simply rely on free e-mail services like Gmail, Yahoo, or Hotmail, there's something about having your own domain name that makes your business look more legitimate. Using a free e-mail account is a dead giveaway that your organization runs on a shoestring. Fortunately, both Google and Microsoft offer affordable and robust hosted e-mail solutions.

Just a few short weeks ago, Google had a huge lead as the most cost effective hosted solution, but Microsoft recently slashed its prices in half to give the Google some real competition. Still, Microsoft Exchange Online at $60 per user per year is a few pennies more than Google Apps Premiere Edition (GAPE) at $50. Not only does Google still have the edge pricewise, its 25GB of storage per user beats Microsoft's 5GB by a fair margin. Mailboxes on hosted Exchange can store up to 25GB, but at an additional cost of $2.50 per extra GB per month.

A huge factor in choosing hosted Exchange over Gmail is whether or not you need to use Outlook. Of course, Outlook supports Gmail by way of IMAP, but since it's a mail-only protocol, you won't be able to share your calendar with coworkers without connecting to the Web. This is a make-or-break feature for lots of people.

Another reason to consider Exchange is if you rely on third party apps that tie in closely with Outlook. Xobni, for example, is a great contact management and social networking tool that works with Outlook exclusively.

Exchange Online can also synchronize with your organization's Active Directory domain controllers. This reduces the number of passwords your users have to remember and enables a single sign-on experience.

Google Apps Premiere Edition also has some strong advantages. If you're a Gmail user, you already know how useful labels can be, and you won't find them in Outlook. Google also has the advantage of being browser agnostic, you'll get the same experience regardless of whether you prefer Firefox, IE, or Chrome. Until Exchange Online migrates to Exchange 2010 in early 2010, you're limited to Outlook Web Access Light when using browsers other than Internet Explorer.

If you're already a Google Docs user, you'll enjoy having a single sign-on for e-mail, Google Docs, and other Google services. Of course Microsoft also offers a plethora of additional online features such as SharePoint, Office Live Meeting, and Office Communications Live, but you'll need to upgrade to Business Productivity Online at $120 per user per year to use them.

It's pretty clear that Google Apps Premiere Edition gives small business the best bang for the buck. Since both offerings guarantee 99.9 percent uptime, reliability should be comparable between the services. If your e-mail needs are simple, Google has you covered. If you've got to use Outlook, choose Exchange Online.

Michael Scalisi is an IT manager based in Alameda, California.