Buy and run a server, Windows Server, Exchange, IIS, in 2003? Did you just tell me to go fuck myself?  I think MS has made up a lot of ground and is comparable to Google, for online services, in a lot of ways, but they're not better and would probably be on the same end of the stick, if they commanded the same lead Google does for these services.
I had MSDN and TechNet subscriptions, and because I was doing a lot of work from home had an old desktop set up as a server anyway, so the cost was low. DynDNS made it easy to host out of my house.
Microsoft's online services are better than Google's. I could list a million and one reasons ranging from being ad-free, document fidelity in Office and the fact that I can't sort my Gmail inbox by sender. And while it has its faults, I have not found a better email client (UX and functional breadth) than Outlook. Here.com is better than Google Maps (true offline being a big deal for me), and Here.com's Transit app is the best public transport app I've found. I don't know how SkyDrive stacks up against competitors, because SkyDrive is good enough for me.
Why exactly do you think Google is better?
 It amused me to see Google's transit implementation in Google Maps - it's a horizontal version of the vertically oriented Windows Phone app from Nokia, which's excellent and has been around for ages.