In another clear sign that Microsoft sees the threat posed by its traditional business moving online, the company is readying a rival to Google's Docs & Spreadsheets.
The software maker is announcing Office Live Workspace, a free online tool for viewing, sharing and storing — but not editing — Office documents online. (Microsoft's existing Office Live efforts will be rebranded as Office Live Small Business.) It's not quite ready — starting from Monday customers will be able to put in their name to be part of a beta testing program expected to begin later this year.
Still, the effort is a recognition that competition is heating up in the productivity arena, an area that large rivals had basically ceded to Microsoft a few years ago. In addition to Google's effort, which, as of earlier this month, also includes presentation software, IBM has announced its free Lotus Symphony productivity software, which prompted 100,000 downloads in its first week of availability.
Adobe, meanwhile, on Monday is expected to announce it has acquired Virtual Ubiquity, a start-up that has built a web-based word processor, called "Buzzword", using Adobe's Flash and AIR technologies. Adobe is also introducing a service, code-named "Share", that allows people to share and store documents via the web.
A blend of online services and traditional software
For Microsoft, Office Live Workspace is also the next step in what the company touts as its "software plus services" strategy, essentially the notion that online services can serve as a complement to locally run software, but not necessarily fully replace software running on a consumer's own desktop machine or on a businesses server.
In some cases, though, Microsoft is also offering its traditional server software entirely as a hosted service. To start with, Microsoft is launching hosted versions of its Exchange email and calendar program, its SharePoint portal software and Office Communications Server, its product for handling corporate instant messaging and telephony. Microsoft chief executive Steve Ballmer and other executives had previously said that such a service was coming.
Initially, the offer is aimed at large businesses that plan to use the software for more than 5,000 people. Microsoft Online Services, as that project is known, is born of a two-year-old effort in which companies such as Energizer Holdings and XL Capital essentially outsourced their desktop computing efforts to Microsoft.
Microsoft is moving cautiously with both efforts. By limiting the software hosting to the largest customers, it hopes to give partners that already offer hosted services some time to find a new niche and allow Microsoft to test itself with a smaller number of customers, before broadly offering the service directly. Partners will still be able to offer their own hosted service if they choose, or resell Microsoft's hosted service.
On the Office Live Workspace front, Microsoft will initially offer the product with no advertising, though Microsoft executives said that it has been architected so that ads can be shown in the future.
The company is also not allowing people to edit their documents online, but executives stressed over and over that Microsoft is committed to being the leader in productivity software and that includes online editing. This indicates that the company doesn't consider editing capability to be necessary right now, but that the situation might change later.
Another key project down the road is integrating Office Live Workspace with other "Live" products, such as Windows Live Hotmail and Windows Live Messenger, so that people will be able to view Office attachments they get via email or IM. Google currently allows Gmail users to open attachments in Google Docs.
Microsoft has already said it has big plans for Office Live. At its partner conference in July, chief operating officer Kevin Turner said the product has the potential to be one of the company's top three or four most-used products.
Nor is the company stopping there. It is also planning an ad-funded version of Microsoft Works, has trialled prepaid cards for time-limited versions of Office and is exploring still other approaches to offer Office in as many ways as it can without overloading customers.
"We've put more of our marketing IQ behind alternative business models and alternative distribution strategies in the last two years," corporate vice president Chris Capossela said in an interview at the partner conference.
Talkback
I do not understand the rush to online services.
Firstly, there are security and legal problems.
Secondly, the current capacity of the internet structure to deal with the increasing demands made on it has to be seriously questioned.
I have two broadband connections, one cable delivering 4 Meg, one ADSL delivering 8 Meg. These speeds can be achieved, sometimes. At other times I regularly have a miserable service on both embracing very slow speeds or no speed at all, arbitrary dropouts with no connection at all and, strangely, connection to my ISP without any further connection beyond to email or to the internet.
This is hardly a basis for services on which people and must depend without reservation.
Hotmail, Google Docs, Yahoo Mail, Google Mail, Google Maps, Facebook...there's a whole raft of online apps out there which people already rely on. When I saw your headline "Why the rush" I thought it was a sly dig at Microsoft for missing yet another Internet boat but now I see you're being serious.
Yes, some online apps are just not reliable or practical and offline still makes a lot of sense for some uses. But what does not make sense is how much dawdling Microsoft has done around online productivity apps and for no other reason that to avoid harming the lovely wad of cash they get from Office - about 40 percent of their revenue I believe. Trouble is - that the alternatives now exist anyway and all Microsoft has done is drag its heels and highlight another example of why its position as any kind of innovator is looking increasingly thin.
The internet is going to have do a lot of maturing before it is ready for this kind of traffic. Security is always going to be a problem, connectivity is poor, and most business's are unwilling for their employees to have open access.
I use Google for a lot of my projects, but find speed is a major problem. Can get nowhere near advertised speed. I can see the potential, but can't think it is near to happening.
I'd like to know where you're living, what ISP you're using etc as claiming the Internet is not mature enough for business yet would come as a surprise to a lot of companies out there I think. Companies such as the UK's Betfair, operate real-time, purely Internet-based businesses that are architected to avoid any down-time - tens of gambling-related transactions per second simply doesn't allow for down-time.
However I concede that the idea of using purely hosted applications might not be realistic for some companies in more remote areas of the UK where connections can be patchy. But that won't be an issue for too much longer.
There are also security and intellectual property issues to consider but these are mostly cultural problems and not concrete technology inhibitors to moving to so-called "cloud computing". And you have to ask yourself - is my data actually safer residing on one device - a device that could be hacked into, stolen or simply break-down - or hosted on the web - where the likes of Google has invested hundreds of millions of dollars to provide a stable platform.