So Microsoft seems to have finally woken up and decided to get serious about the Web — or at least semi-serious — by rolling out a cloud-computing platform called Azure and announcing the imminent arrival of Web-ized versions of its Office applications (my favourite response to these announcements came in a Twitter message from Sarah Perez of Read/Write Web). Obviously, the Web Office news is a shot across the bow of Google and its Google Docs — Microsoft is even using mostly Ajax just like Google, instead of its Flash-style Silverlight technology. But who does the rollout of a Web Office hurt Google more, or does it hurt Microsoft itself?

I don’t know the answer to that question, but I still think it’s worth asking. No doubt many users of Google Docs will shift to Microsoft’s version, in part because it will make integration with their existing corporate systems easier, or because their employers will make its use mandatory. Others may find that Microsoft’s Web apps offer better compatibility with regular Office programs (something that Google Docs still isn’t that good at, at least when it comes to advanced page layout and that sort of thing). But what about the competition between Microsoft’s Web Office and the real Office?

I would imagine that Microsoft is going to try its best to make Web Office just useful enough to entice people away from Google, but not nearly nice enough to tempt them to drop the regular installed version of Office. But no matter how hard it tries, there are likely to be small or medium-sized companies that decide it’s just as good to use the Web version as it is to pay $300 or whatever per seat to get an authorized copy of the desktop software. That’s going to be money right out of Microsoft’s pocket, since Office generates truckloads of cash for the software behemoth.

Maybe Microsoft will be able to manage the process so that it doesn’t cannibalize its Office franchise too much, or maybe it will err on the side of crippling the Web Office so that it doesn’t harm the installed software versions. But either way, that’s a tricky balance to strike.

Note:

I originally wrote this post under the impression that IBM was launching an online Office suite based on Star Office, but instead it has launched a free downloadable office suite. My apologies.

As expected, Google has finally launched its long-awaited PowerPoint-style presentation app — Google Presently — which was discovered by the ever-resourceful Ionut Alex Chitu earlier this year. It’s the final piece of Google’s online Office-style suite, which it is now pushing to sell to corporations in direct competition with Microsoft’s Office.

And now IBM has decided to awaken from its slumber and get into the game as well, with the launch of a Lotus-branded free suite built on Sun’s Star Office software, called Lotus Symphony. An IDC analyst tells the New York Times:

“I.B.M. is jumping in with products that are backed by I.B.M., with the I.B.M. brand and I.B.M. service,” said Melissa Webster, an analyst for IDC, a research firm. “This is a major boost for open source on the desktop.”

As the NYT story points out, this is also another big gesture of support for the Open Document Format, which Star Office and Open Office use and which Google’s document services also support. Microsoft, of course, is championing a competing format. And Mike Masnick notes that Yahoo’s purchase of Zimbra means there could soon be another large competitor in the free and online Office game.

Anyone want to buy Zoho.com?

Not that long ago, Google CEO Eric Schmidt would routinely deny that the company had any intention of using its Gmail, Google Docs and other services to compete directly with Microsoft’s Office suite. “We’re just playing around with some Web stuff,” he seemed to be saying. “Nothing important to see over here.”

We all knew differently, of course, and now we have even further evidence that Google is intent on moving into the corporate space, with the news that it has signed a deal with CapGemini to push Google Docs and other apps at small and medium-sized businessses.

Until now, Microsoft has remained relatively mum about Google, but apparently this latest move was a little too much for the software behemoth to take. As ZDNet reports, the company issued a somewhat defensive-sounding statement about its Office software dominating the market, etc. etc. — and then followed up with some helpful questions for journalists to ask Google, such as:

1. Google touts having enterprise level customers but how many “USERS” of their applications truly exist within the enterprise?

and

2. Google has a history of releasing incomplete products, calling them beta software, and issuing updates on a “known only to Google” schedule – this flies in the face of what enterprises want and need in their technology partners.

Microsoft goes on to take thinly-veiled and not-so-thinly veiled shots at the fact that Google apps depend on Internet access, that they don’t let you create headers and footers, and other earth-shattering revelations (the company’s statement also flicks at the issue of corporate security, which others have mentioned as well).

Of course, the overwhelming impression created by the note is that Google is starting to get under the software titan’s skin. Larry and Sergey are probably chuckling to themselves even now.

Just a couple of days after buying Tonic, which gave the company a PowerPoint-style application to add to its growing toolbox of Office apps, Google has announced that it is buying Marratech, a company that makes a NetMeeting-type video-conferencing tool and is based in Sweden.

This isn’t all that surprising, of course, since Google has clearly been building a Web-based Office suite ever since it bought Writely, which became Google Docs. One thing that surprises me, however, is that the application requires a download — unlike some of the other Web-based presentation or conferencing apps, such as Vyew and Zoho Meeting. I haven’t tried Zoho Meeting, but I have tried Vyew and it was easy to use and cross-platform (as is Zoho’s app, since it comes in an ActiveX, Java or Flash version). But what I don’t get is why Google wqould pin its hopes on something that requires a download.

I know that they could bundle it with the rest of the Google apps that you can download as part of the Google Desktop, as Mike points out, but I still sort of look at Google as being the king of the “works anywhere” Web-based app. Moving to something that requires a download is kind of an odd step, I think. Just my two cents. (screenshot via Amit Agarwal)

Ever since Google first launched things like “apps for your domain” and bought Writely, CEO Eric Schmidt and others have been singing the same song: namely, that the Internet behemoth has no intention of putting together a competitor to Microsoft Office. At the Web 2.0 conference, for example, he said “We don’t call it an office suite. It’s not an office suite.” Google does not want to compete with Microsoft, he and others have said repeatedly.

If Mr. Schmidt and his friends Larry and Sergey don’t want to compete with Microsoft, they have a funny way of showing it. As they have added features such as spreadsheets and wikis and bundled all of them together — and are now launching them directly into the corporate market as a suite in everything but name — it’s obvious that what Google really didn’t want was to admit that it was going to try and compete with Microsoft. Better to plan a sneak attack, all the while protesting innocence. Has that really accomplished anything? I’m not sure. I think it might have been better if Schmidt had come right out and said they were going after Microsoft before now — he likely would have been greeted with cheers.

Google’s previous bundled apps — which you can now think of as Google Apps Consumer Edition — were obviously a dry run for what the company has just launched, which is essentially the same suite, with email, documents, spreadsheets, calendar and 10 gigabytes of storage, for just $50 per user per year. In case you’re wondering, that’s about 1,000 per cent cheaper than Microsoft Office (I’m exaggerating, but not by much). And they are providing 24-7 support and guaranteed 99.9 per cent uptime.

But can Google guarantee that the Internet, or my specific provider, will have 99.9 per cent uptime? Probably not. To me, the missing piece is still some kind of offline app that will cache documents for when Internet access isn’t available, like Zoho is doing. Google’s Office suite (let’s call it what it is) might be fine when you’re at HQ with a T1 line, but what about when you’re in a regional office in Poughkeepsie, or on the road? Don Dodge makes a similar point here.

Further reading:

Mary Jo Foley, who knows a thing or two, says Google might want to revisit the history of Microsoft’s failed Hailstorm project, which she says proved that businesses don’t want to store data in “the cloud.” But my friend Paul Kedrosky says that he thinks Google’s apps could easily chip away at the small to medium-sized business market, where companies don’t need or want to pay exorbitant sums to run all of Microsoft Office. And Henry “I used to be a famous Wall Street analyst” Blodget admits that he was wrong when he said Google would never go up against Microsoft Office.