Google apps is a god-send to shops that don't want to deal with exchange servers or other mail transport systems or oracle calendaring systems. Gmail is a world class email application that handles millions of emails and allows for super fast search. Google Calendar is the most amazing calendaring application for colorbation that the world has ever seen. Google docs & spreadsheet is a word-clone and excel clone respectively., and Gtalk (a real time communcations platform). All this for $50 per user! Compare that to any Microsoft or Oracle setup. This the clear winner.
How can you compete with Google's quality of service and brand? Google is the right way to go.
Sign your domain up for Google Apps here: