As many know, Google offers a free and paid service called Google Apps that allows you to use their apps (such as Mail, Calendar, Docs, and more) with your own domain. This is great for a small business or organization that wants to be able to collaborate using their own domain. What many may not know is that Microsoft’s Windows Live division offers a similar service as well called Windows Live Custom Domains. Does it match up to or surpass Google’s offerings or is it another service from Windows Live that shows its behind the times?

Setting Up Your Custom Domain
First thing’s first: you need a domain name. If you already have a domain name, you can use it with Windows Live Custom Domains without changing your existing registrar. Your current registrar must allow you to make custom changes to your DNS settings. If you don’t already have a domain, Microsoft gives you the option to purchase one from one of its partners.

Next step is you will need to assign an administrator for your Windows Live Custom Domain. If you already have a Windows Live ID, you can use that. For security reasons, I would recommend creating a brand new Windows Live ID specifically for your domain. Assigning your personal Windows Live ID as the administrator can be a time saving measure, but if anyone were to get access to your personal account, they would also have access to your business accounts as well.

After logging in or creating a new account, your Windows Live Custom Domain account is active on Microsoft’s servers. In order for it to be fully functional, you will need to set up the custom DNS settings with your domain’s registrar. This not only proves the domain you registered is in fact yours but also ensures you’ll be able to use the services provided by Windows Live, such as Messenger and Mail.

Managing Users and Settings
When it comes to managing your Custom Domain services, you’ll be quick to learn there’s not much to manage. Creating a user is rather simple. The basic information is there. Account name, First and Last Name, and Password. After creating the user account, the new user logs into Windows Live just like any other Windows Live user. This gives them access to the complete range of Windows Live Services, including Hotmail, Messenger, SkyDrive, and Spaces.

If you need to make any changes to the user account after you create it, you can forget about it. The open options you have available are to either Suspend the user’s mail account or delete the user completely. It’s important to note that the Suspend Mail option does exactly just that: only suspends the mail account. The user will still have access to SkyDrive, Messenger, and other services.

Other than those shortcomings, Windows Live Custom Domains does allow an interesting and unique feature called Open Membership. Open Membership lets anyone create a Windows Live account using your domain name. If you have a unique domain name, I can see where this might be a nice option to give users of your organization and community, but it can be nightmare as well. Open Membership could lead to some major liability issues as emails from your domain could be damaging to your brand.

The Open Membership web site claim that this will bring more visits to your web site, give you free advertising, and less stress, but I hardly believe that (especially the “less stress” part). In fact, if you read the fine print at the bottom of the page, it states “If you need to approve every sign-up request, do not turn on open membership.”. It’s a nice idea in theory, but can be more troublesome than useful.

Compared to Google Apps
When comparing to Google’s free Google Apps Standard service, Windows Live Custom Domains looks very plain and boring.

Each service offers the basics: Mail, Calendar, Contacts, and Docs. Google’s messaging services are far more superior than Windows Live’s offerings, but Windows Live Office Web Apps are more familiar to users of the Microsoft Office products. That familiar interface doesn’t make up for the other lackluster products.

When it comes to services, administrators of a domain may only want to offer certain services to their users. For example, if you only want to offer Mail and see no use for Documents or a Blog, Google Apps lets you remove all those unneeded services. Windows Live Custom Domains is the complete opposite. Once an account is created, that user has access to ALL Windows Live services. The only service that can be disabled is Hotmail. If for some reason an administrator wanted to prevent someone from using Windows Live Messenger, they can’t (well, outside of removing all related DNS entries). See no reason in having a Spaces account? Too bad. Your users are free to create a blog without any problems.

Collaboration is another area where Google Apps shines. Sharing your documents from within Google Docs is easy and straightforward. Unlike Windows Live, Google Apps lists all users in your domain so that you can easily choose who to share documents with. Windows Live requires all users to manually add other users to their contacts first or manually type the other person’s email address. If you don’t know the person’s exact email address, you may not share the document properly. It’s very surprising a Global Address Book does not exist within the Custom Domain service.

Speaking of the Global Address Book, if anything, there is one major advantage to Windows Live Custom Domains compared to Google Apps:

Microsoft Outlook.

There are some people out there that swear by Microsoft Outlook. They live, eat, and breathe it. This is one feature that Google Apps does not provide in the free version of their service. Using the Microsoft Outlook Hotmail Connector, users will be able to use their Windows Live Custom Domain email, contacts, and calendar within Outlook which syncs all their data with the service. For those on the road, they now have access those same services using Exchange ActiveSync, which is now supported on many mobile devices. All versions of Google Apps also offers mobile access via Exchange ActiveSync as well.

Conclusion
Overall, there’s nothing special about Windows Live Custom Domains. It appears all it’s doing is creating a Windows Live account for users at your own domain. The only advantage is you can use an email address with your domain instead of a @hotmail.com/@live.com address and the administrator of your domain can create and delete the accounts. Not being able to completely suspend an account (instead of just their mail service) is a horrible oversight. Also being unable to block access to individual Windows Live services could be a concern to some administrators. The service should probably be called Windows Live Hotmail for Your Domain as that is truly the only advantage you get with Windows Live Custom Domains.

Google has set the bar really high when it comes to free hosted services for your own domain. Sadly, like many of Microsoft’s other services, they’re very far behind and seems very dated. If you truly enjoy using Hotmail or must have a free Exchange-like service for email at your own domain so you can use Microsoft Outlook, then I so go with Windows Live Custom Domains. Outside of that, I just don’t see the advantage of the Custom Domains service. For organizations and small businesses, Google Apps is still the way to go.