In Response to Google 'Threat,' Microsoft Brings Office 2010 into the Cloud

By Patrick Barnard, Senior Web Editor, TMCnet

Microsoft is going up against Google (News - Alert) Apps by bringing its Office 2010 suite -- which will become available to businesses starting in May -- into the cloud and making it available for free to online users. The only catch is, just as with Google Apps, the free version uses an ad-supported model that subjects users to advertisements in order to use the software.

In addition Microsoft (News - Alert) has added “Web-friendly” features to Office 2010, including the ability to edit documents simultaneously with other users.

Some analysts see a huge opportunity for Google to lure away many of Microsoft’s business customers.

'Of all the other threats [Microsoft has] faced over the years, this is the one to worry about, not just because it's from Google but because it espouses a whole new way of doing things,' David Smith, an analyst at Gartner (News - Alert), was quoted as saying in a recent Wall Street Journal article.

Electronics manufacturer Sanmina-SCI Corp. (News - Alert), for example, recently finished moving all 16,000 of its employees from Microsoft's Exchange to Gmail and is reportedly beginning to test other Google apps internally, even though it uses Office applications on its PCs for now.

Still other companies are staying loyal to Microsoft – some of them claiming that, based on their experience thus far, the new version of Office offers more features and is more rich and robust than Google’s online suite.

As the article points out, price has been a big factor in Google’s success in winning over business customers: For the regular, advertising-free version of its software, it only charges a flat $50 per user a year. Customers also don't have to install or administer the software, which Google runs in its data centers.

Meanwhile business versions of Office typically sell for several hundreds of dollars, while the popular consumer version runs around $119.

Microsoft is yet to disclose what it will charge for the Web version of Office 2010.

(source: http://it.tmcnet.com/topics/it/articles/80203-response-google-threat-microsoft-brings-office-2010-into.htm)