Outlook can do a lot, but you've got to do a lot to get it there. Very small businesses that aren't willing to invest the time or money in setting up a slick Outlook/Exchange installation can now get decent communication suites online. Previously I've covered Joyent (see also their limerick), and most recently I got pitched on HyperOffice, another online suite with email, a calendar, a contact manager, and collaboration features.
I took the suite for a quick spin. It's got solid workgroup functionality and a lot of the collaboration features that small businesses will need. But it does not feel like a contemporary online product due to its old-school interface. (HyperOffice also has its own hosted replacement for Exchange, which is worth looking into for small business already comfortable with Outlook.)
At its core, HyperOffice is a communication suite, with a simple Web-based email application, a calendar, a contact list, and so on. It has a lot of workgroup features, like the capability to let users also overlay other calendars (such as the company event calendar) into their own.
There's more it can do for groups: It has a simple polling application (a very good feature, I think, for use in any company), a discussion forum, and a rudimentary Web site publishing tool for intranet sites. Also, everything that can be done in user accounts can be shared: Calendars, contacts, files, tasks, and links all exist in single-user and shared folders. There's no CRM application, though.
When you drill into the suite you realize that some of its nice features are at odds with its bare-bones Web interface. For example, the file manager (and a similar bookmark manager) has the necessary group functions: Users can save files to their own personal directories or move them to group folders. Optional virtual hard drive software makes file access from Windows PC a snap. On the other hand, from the Web interface, there's no drag-and-drop file moving: you have to laboriously click through menus to do file operations.
In fact, in testing HyperOffice I quickly grew tired of its Web 1.0 interface. Annoyances popped up all over the site: The e-mail editor is text-only (although the intranet site creator has a WYSIWYG text editor). To create an appointment you have to click "add event," instead of just clicking on the day or time. In the bookmark manager, to add an image to a saved link, you have to point to a JPG -- an up-to-date app would make its own screenshot. If you want to move columns around on your start page, you have to go into a text menu, instead of just dragging them, as you can do on almost any modern start page. And so on.
On the other hand, HyperOffice does have a solid mobile device interface. Just log into it from a small-screen device (like a Treo), and you get a special, lightweight UI well-suited to a tiny device.
I'm trying not to become a slave to Web fashion, but HyperOffice's old-school interface slows down use of its basically strong feature set. Other Web-based collaboration tools, like Joyent and Microsoft's Office Live, have much better interfaces. The service is reasonably priced, though, at $6 to $9 a month per user.