…small businesses or companies that don't want to pay a full Office licence for employees who rarely use the suite, some analysts said.
While IBM, Sun and Novell are attempting to offer OpenOffice-derived alternatives to Microsoft, web businesses Google and now Yahoo are using Web 2.0-style features to attack Microsoft's largest businesses.
Yahoo's Zimbra email and collaboration software is notable because it resembles a full-featured desktop application but the client runs in a browser. To do that, Zimbra has made heavy use of the web-programming technique Ajax to make its application more interactive and support features such as mashups, websites or applications that combine content from multiple sources but appear seamless upon use.
Zimbra has signed on eight million customers through internet service providers. The company designed its email server for businesses as well, an area where Microsoft's Exchange is entrenched. But it's not clear whether Yahoo will continue to pursue that market, O'Grady said.
Several other start-ups are developing web-based Office alternatives using Ajax or Adobe's Flash, which are typically free for consumers.
Google, meanwhile, continues to expand its Google Apps suite through new products, such as Google Presentations, and acquisitions including web-collaboration company JotSpot, which it bought last year.
The web-search king also has its eye on large businesses. It approached consulting firm Capgemini to create support and installation services for Google Apps Premier Edition, which costs $50 per user per year.
Capgemini executives said the product lacks the sophistication of Microsoft Office but can fill a role even inside large corporations, such as collaborating with business partners over the internet.
Chris Swenson, a software analyst at NPD Group, said the most recent sales data on Office 2007 looks very good for Microsoft. In the retail channel, sales to date this year show Office having a 96 percent dollar share and 98 percent dollar share in the commercial market.
It's exactly that massive market share and the billions spent that explains IBM's introduction of Lotus Symphony and web-based Office alternatives, said Gartner's Silver. He added that he has seen more "reasonable interest" in Office alternatives in the past year among Gartner's corporate clients.
Microsoft "makes billions of dollars [in desktop software], so it's a hard market to ignore," he said. "But it's a hard market to get into."
